For Google, The Meaning Of Open Is When It’s Convenient For Them

Yesterday, Google published a long manifesto on the “meaning of open” in the form of an email to all employees republished as a blog post. In it, senior VP of product management Jonathan Rosenberg, makes an eloquent argument for why open systems always win and urges Google’s employees to always strive to be open when designing products. An open Internet spurs innovation and brings more consumers on board, which ultimately means more searches and increased use of Web applications.

The gist of his argument is that a bigger, better Internet is good for Google. He writes that Google employees should resist the impulse to create closed products and systems, and even makes a swipe at Apple for doing so (bold added for emphasis):

. . . open systems win. This is counter-intuitive to the traditionally trained MBA who is taught to generate a sustainable competitive advantage by creating a closed system, making it popular, then milking it through the product life cycle. The conventional wisdom goes that companies should lock in customers to lock out competitors. . . . a well-managed closed system can deliver plenty of profits. They can also deliver well-designed products in the short run — the iPod and iPhone being the obvious examples — but eventually innovation in a closed system tends towards being incremental at best (is a four blade razor really that much better than a three blade one?) because the whole point is to preserve the status quo. Complacency is the hallmark of any closed system. If you don’t have to work that hard to keep your customers, you won’t.

It all sounds great and Google certainly is a champion of open systems with Android and Chrome and countless other projects. Google is making a very public effort to claim the mantle of openness. But the battle for this mantle has been going on for a long time. Two years ago, I wrote a post titled “Who Is The Opennest Of Them All?”. What I noted then bears repeating:

But don’t be fooled. Companies are very selective about the areas where they choose to be open, and they very rarely open up their core source of profits voluntarily. . . . So the next time a company touts how open it is, ask yourself how that will help it make more money. Don’t confuse openness with altruism.

Google is only open when it is convenient for them. Google will never open up the source code to its search algorithms or its advertising system, or share the core data which gives it a competitive advantage in those areas because that is where it makes all of its money. Again, I pointed this out in that post two years ago:

Just because industry pressures and increased interconnectedness are forcing companies to embrace open technologies, don’t confuse openness with profitability. Open standards tend to be good for spurring the adoption of new technologies, but not so good for generating profits directly. That is why companies choose to be open along axes where they don’t compete. Google, for instance, is a big proponent of open standards in social networking, mobile networks, Web applications, and practically everywhere —except the one place it makes money. Its advertising system is a black box. You also never hear any talk coming out of Google about opening up the search algorithms that drive all of those advertising revenues. In contrast, Google has no problem championing open standards in industries that it is hoping to disrupt (by commoditizing existing business models with open standards, and making money with advertising instead).

Rosenberg realizes there is an incongruity between what he is saying and what Google is doing. He takes a stab at rationalizing this huge exception to Google’s embrace of everything open:

While we are committed to opening the code for our developer tools, not all Google products are open source. Our goal is to keep the Internet open, which promotes choice and competition and keeps users and developers from getting locked in. In many cases, most notably our search and ads products, opening up the code would not contribute to these goals and would actually hurt users.

Maybe, but it is more likely it would hurt Google. The company has good reasons for keeping those things closed tight. Opening up those black boxes would make it easier to spam search and game AdWords and give competitors valuable data to make their own search engines and advertising systems better. If it opened all of that stuff up, it would have to work harder to keep its customers.

And really nobody should begrudge them the right to keep products they’ve spent a lot of time, energy, and money building to themselves. But don’t give us this song and dance about how everything should be open and how Google is the opennest company in the world. Google has nothing to lose if operating systems, mobile phones, browsers, books, news, and every other industry becomes open and free, as long it can make money from search and advertising. That is exactly why Google is so disruptive. It can offer products for free that other industries charge for, as long as those products result in more searches or other advertising opportunities.

There is nothing wrong with this strategy. The fact that Google is pushing openness in so many industries is generally a good thing for startups and consumers alike. But Google should just be honest and say that they think everything should be open—except for search and advertising.

Source:

http://www.techcrunch.com/2009/12/22/google-open-when-convenient/

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Amazon: E-book Sales Surpass Paper on Christmas Day

With so much enthusiasm—aided by a good dose of marketing and technological evolution—surrounding e-book readers, it was bound to happen sooner or later: sales of electronic books topped their paper-based cousins for the first time this past Christmas day, according to Amazon.com

In a press release on its site, Amazon’s founder and CEO Jeff Bezos mentions that the Kindle was the “most-gifted product”in the company’s history; although the release makes no mention of actual sales numbers, it does note that the Kindle sales surpassed both the 8GB iPod touch and Garmin’s Nuvi 260W GPS device to claim the top spot in the electronics category (and in overall sales).

Given the timing of the event, it’s likely that the spike in e-book sales recorded by Amazon was due primarily to the high number of gift recipients who opened up the brand-new Kindles they found under their Christmas trees; nonetheless, this milestone could represent a watershed event for the inexorable rise of e-book readers in general, and the Kindle in particular.

The company also reported that December 14 was Amazon’s busiest day of the holiday shopping season: on that Monday, Amazon processed sales of 9.5 million items worldwid—or about 110 per second on average. Perhaps more impressively, the e-tailing managed to deliver a Kindle that was purchased by a Seattle-area customer on Christmas Eve within three hours of sale.

Amazon’s Kindle 2 and Kindle DX were just two of several devices that Macworld reviewed in its comprehensive e-book reader review roundup earlier this month.

Source:

http://www.itnews.com/entertainment/12369/amazon-e-book-sales-surpass-paper-christmas-day

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Apple Thrives Despite Jobs Being away

2009 was a year for the record books for Apple.

Besides recording three of the most profitable quarters in company history and ending the year with $36 billion in the bank, Apple had its biggest iPhone opening weekend ever this summer.

And most of this happened without Chief Executive Steve Jobs. Last year's questions over his physical appearance were answered when he announced in late January he'd be taking a leave of absence to deal with a medical problem that he found out was "more complex" than a hormone imbalance. Jobs declined to be more specific about his condition, which led to discussion of how much of executives' private lives we should be privy to. By late spring it was revealed he underwent liver transplant surgery. Chief Operations Officer Tim Cook handled the reins for six months. By July, Jobs was seen back on the Cupertino campus. His first public appearance came a short time later at Apple's September iPod event.

Like most years, 2009 was punctuated by a series of signature Apple product launch events, though this time the majority were simple refreshes of hardware. In software, Apple saw the release of the latest iteration of its operating system, Mac OS X 10.6, a refreshed iTunes 9, and an updated iPhone OS--now with copy/paste and multimedia messaging. And as has been true for each of the past two years, the release of the iPhone 3GS was a spectacle in itself.

Meanwhile, developers have flocked to Apple's mobile platform, with more than 100,000 apps currently available in the App Store. But Apple's gatekeeping policies have tempered excitement for some developers. Early in the year those creating applications for the iPhone and iPod Touch began complaining about a lack of transparency in the App Store review policy. Grievances regarding Apple's inconsistent practices, lack of communication, and playing favorites grew more vociferous as the year wore on. The last straw seemed to be when Apple rejected Google Voice, the popular service from its one-time close partner, prompting the FCC to get involved. As a result, Apple was forced to open up a bit and we got a glimpse of how the App Store review process works.

That wasn't the only word the federal government wanted to have with Apple. Along with several other Silicon Valley giants, Apple was accused of agreeing not to hire each other's employees and a Department of Justice investigation is still ongoing.

In other legal news, Apple wrapped up its suit against Psystar. The Florida-based company was found to have violated Apple's copyright in selling Mac OS X preinstalled on non-Mac hardware, and the two came to a preliminary settlement. But a new drama unfolded with smartphone competitor Nokia, which sued Apple for not paying royalties on a copyrighted smartphone technology.

Unfortunately for the most passionate of Apple fans, two of the year's most anticipated products from Apple never came to fruition. Looks like we'll have to wait until 2010 to see if the mythical Apple tablet or the Verizon iPhone finally appear.

source:

http://news.cnet.com/2702-13579_3-419.html?tag=newsEditorsPicksArea.0

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Mobile Internet to Dominate Within 5 Years -- Study

The mobile Internet is growing faster than its desktop counterpart ever did, and more users may go online via mobile devices than desktop PCs within five years, according to a new study by investment firm Morgan Stanley.

The intriguing prediction is one of many in the firm's massive "The Mobile Internet Report," a 424-page epic that someone, somewhere is bound to read in its entirety. For the rest of us, the executive summary will do just fine. If you're interested in perusing the full report, you'll find it here.

The report states we're "now in the early innings" of mobile Internet development, which is growing faster than previous tech cycles, including the evolution of the desktop PC. Given the rapid adoption of smartphones, including (obviously) the Apple iPhone and a growing number of devices using Google's Android mobile operating system, Morgan Stanley's conclusions shouldn't surprise anyone.

The study also points out that mobile Net growth is global phenomenon, not one confined to the developed world, which was typically the case with prior tech trends. But despite the worldwide focus, U.S. companies including Apple, Google, and Amazon are taking a leadership role. Furthermore, "a host of relatively young, but seasoned world-class technology veterans," including Apple CEO Steve Jobs and Facebook's Mark Zuckerberg, are leading the mobile push, the report states.

Five key tech trends are converging to spur mobile Net growth, including 3G (and soon 4G) broadband, the popularity of social networking, online video, VOIP services such as Skype and Vonage, and "awesome mobile devices" that do tasks that until recently were the sole domain of your desktop or laptop PC.

The short term looks especially bright for Apple, but challenges await.

The "mobile ecosystem" of the iPhone, iPod touch, iTunes, and various accessories and services will continue to bloom over the next two years. After that, however, Google Android, competition from emerging markets, and wireless carrier limitations may pose a threat to Apple's market share, the report predicts.

There's little doubt the mobile Internet will dominate in the coming years--just look how far mobile handsets have come since the debut of the iPhone in 2007. Toss in a growing selection of rapidly improving smartphones, a new breed of wireless-ready tablet devices, e-readers like the Amazon Kindle, and faster 4G networks, and it's easy to see that mobile is the future of the Net.

Source:

http://www.itnews.com/mobile/12122/mobile-internet-dominate-within-5-years-study

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