Saturday, August 18, 2007

Google's Grand Plan

Between Holidays

Just returned from two weeks of well-deserved (?) vacation, and only a single (totally?) unoriginal thought on my mind. It concerns Google's Grand Plan.

I'm off again for the whole of next week. Come and meet me in New York. I will be at the Hilton on 6th Avenue.

Robert Cringely almost a year ago stirred the Internet community when he suggested that Google was building an Internet of its own. This was based on Google's efforts at building infrastructure, ranging from dark fiber to servers (and beyond).

It occured to me, as it must have to many others, that this GoogleNet could be where Google is heading in the long term. However, it would have very little to do with infrastructure.

So far, Google = search + ads + apps. Google's share of search is on the rise, the ads market is nowhere near saturation and Google keeps delivering news apps. Each time they do turn out a new app, they maintain that it must first serve the people, and monetisation will follow in due course.

Everybody nows that the seismic shift of ad dollars will one day end, and the Internet ads market will prove to be as cyclical as any other ads market. My theory is that Google is planning a new business model for when that happens. They will start charging for an ad-free Internet.

A new generation is growing up on the Internet, learning that information is free, as long as you agree to be served ads everywhere. Ads are not just taken for granted - they are increasingly seen as useful information (compare email services like Daily Candy or Thrillist, with huge CPMs).

However, when the dust settles an ad-free Internet will become attractive again. It may take a while as the Content = King theorem seems to be out of fashion. But one day ...

Anyway, by that time, Google will have the power to serve an ad-free Internet - for a fee. It will have all the apps, and no content. So, it can share the fees with the content owners, just like it can share ad revenues on YouTube with content owners.

Back late August!

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