Observers of Microsoft's product development over the last couple decades have noted the Company's exceptionally poor timing. They were late to the Web and let Netscape own the browser at first. They were late to "software as a service" and let Salesforce.com grab the early lead. In fact, they continue to play catch-up in several categories like online music (iTunes), digital video in the living room (Tivo) and sponsored search (Google and Yahoo). However, notwithstanding its inability to innovate, Microsoft was been great at immitating.
Sponsored search, the core of Google's multi-billion empire, has been a thorn in MSN's side. No more (maybe). Today MSN launched the beta version of its adCenter. The service, although a bit quirky, seems robust. Although it may not be as advanced and flexible as Google's AdWords, it may in fact be better than Yahoo's ad tool, Overture.
Look for Microsoft to aggressively grow this high margin business. And, as important, as Microsoft begins to extract value through sponsored search, they could be in a good position to take another page out of the Google and Yahoo playback -- buying startups with broad market appeal (think: Flickr, Keyhole, Del.ico.us, etc.). This is good news for the startup entrepreneurs and the VCs who develop content-oriented services.
About the Author
Michael Taus is the Managing Director of Magnolia Ventures a technology incubator and venture business consultancy, and Aquo Interactive, a software development and Internet marketing firm . He has been involved in the growth and development of network-related technology companies since 1996, including Rent.com (acquired by eBay) and BigLinx, a proprietary search engine marketing service. He currently is an advisor to a number of early-stage technology companies.
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Google Video - Opens the Web for RealCasting
Monday, January 09, 2006
Google is used to attacking 900 pound gorillas. Just ask Steve Balmer. But its announcement this weekend, seems squarely targeted at Apple and its recent successes with the iPod.
On Saturday, Google announced that its Google Video service will be incorporating an open and flexible pricing mechanism for content distributors that are interested in offering video content online. This move is markedly different from Apple's decision to set pricing across the board.
History dictates that an open paradigm will win, especially for such a nascent industry. Apple does have a significant advantage in this case as it is far and away the leading distributor of mobile content players. Even though most iPods do not play video, look for video to take an ever increasing role in the product offerings.
As in the late 80's, being a one-stop shop for consumers has an advantage for Apple. But it also has its disadvantages. Google, with its cash war chest and leading online position, is in a strong position to begin co-marketing with all the other mobile device manufacturers -- think : Archos, Creative Zen, etc.
Moreover, Apple's commitment to its own proprietary standards will prove to be a significant achilles heal. This is especially true as more categories of devices begin to share the same video content. Eventually, the industry will converge on DRM standards, which means that you will be able to record content on your cable box and tranfer it to your laptop, cell phone or other mobile device. I seriously doubt that Apple's codecs will be included in any of these packages, regardless of how popular the iPod is or becomes.
Finally, as we mentioned in October of last year, Realcasting will continue to grow in popularity. Google's open pricing structure is likely to be thee beachhead that enables this phenomenon.
About the Author
Michael Taus is the Managing Director of Magnolia Ventures a technology incubator and venture business consultancy, and Aquo Interactive, a software development and Internet marketing firm . He has been involved in the growth and development of network-related technology companies since 1996, including Rent.com (acquired by eBay) and BigLinx, a proprietary search engine marketing service. He currently is an advisor to a number of early-stage technology companies.
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