Monday, December 15, 2008

Why is Google so successful?

Wow! Did you happen to catch this excellent piece of analysis by Fabernovel? Or their White Paper? Staggering stuff ... brilliant insights ... and scary at a number of different levels. Thanks to Digital Ministry and John Lynch for sharing.

I don't give much truck to conspiracy theories, and I'm an enthusiastic fan of Google. Good luck to them, and more power to those who make it easier for us all to connect. So take all of this positively.

But I never imagined there was this much strategic intent behind the various Google "avatars". Or even if it wasn't all Sergey and Larry, the idea that comprehensive analysis like Fabernovel's could divine the strategic elements. It's amazing - so refreshingly simple, so vicariously thrilling, yet overwhelmingly compelling.

For those who can't be bothered to read the presentation or the White Paper, here's the 30 second synopsis:
  • Google's success is a result of the successful application of Metcalfe's Law on the utility of networks;
  • Their reach (or utility) is not the sum of the people in the networks - it's proportional to the square (!) of the people in the networks.
  • Inital value is created through two-sided markets, which morph to polygonic markets through addition of complementary networks;
  • That creates geometric growth in value (which coincidentally attracts new networks).

This all creates a space where Google can look at new points of leverage - like browser-based apps, offline advertising. So Google can be Google, and the rest of us can be scared.

Google has posted some pretty big user numbers in Search and other apps. And once you do that, the power comes more from the number of networks rather than the number of participants in each network.

Thought for the Day: Maybe it's time to figure out how to link networks rather than just create new ones.

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