Two weeks ago Google retired Google Reader. One week ago Google announced that they retire Google Latitude and offline maps.
While it certainly did not make me a happy Google user, it made me start asking some fundamental questions about the lifecycle of free internet services as I start seeing familiar patterns.
I will focus on services oriented to the mass audience.
From a concept to market. While developing a service the owner has to have a rough idea what functionality the service should have when making it available to the audience and what is the business model. The owner has to choose the audience growth vs revenue. With the current technologies one does not have to have too much money to make a service available to the audience. Thus, there are many new entrants, often motivated by some cool technology and inflated expectations. It is not uncommon to postpone the decision about the business model.
Introduction to the market. The service is ready and cool. The owner uses it, recommends their friends, asks friends to recommend the service their friends, collects feedback, improves, and so on. If the owner asks themselves about the business model at this point, the choice is obvious, let the service be free to support the user base growth.
Growth. The user base is growing. In order to keep growth new features are needed to attract new users. Now the owner cannot do it themselves. Need more development, support, operation costs are rising. If the owner has enough cash, it looks like the growth is a good problem to have. If the owner does not have enough cash, the owner either have to search for some funding, start charging for the service or just face the painful decision. If the owner starts charging for the service, this is the first moment of truth what the service is worth for. There are alternatives. For example, introduce a paid premium service or try to gain non-monetary benefits like make use of collected data (initial or ongoing).
Maturity and Crash. At this point all excitement about the cool technology disappears. There is no too much to do on the product. Just fixing bugs here and there. The market is saturated now. Very slow growth. If the owner did not think about the business model, now this is the most important question. This is when services get discontinued. The owner at best has some experience and moves on to a new service to repeat the cycle all over again.
Not all services get discontinued. Making the right decisions and thinking about the business model, first of all, in the early stages is a key for the success. Do not let your excitement to suppress your wisdom.
Google Latitude and Google Reader are good example of this lifecycle. None of the services had a good business model, if any. Google Latitude collected some geospatial data from the users. Google Reader collected some user reading preferences. Google could not monetize that in any way. So they decided to discontinue the services. Somehow, that reminded me removing features from MapQuest after AOL acquired it. We all know what happened with AOL.
Another example. In early 2000 free email providers started removing POP3/IMAP access. In 2007 Lycos decided to delete all of customer’s email.
This should be a friendly reminder to those who uses free, but unsustainable services. If you use a service to keep your family pictures, remember to may go black. Email, calendar, contacts, important documents… The same thing. We have a sheer number of free well known services with a large user base, but are not profitable. It is just a matter of time when their owner decides to put a plug. And to add an insult to an injury, it is difficult or impossible to get your own data back.
Those who offer services should not only have a clear and sustainable business model, but also make sure that their users know the value they get from those services. Ideally, service providers should help their users to gain even more from the services.
There are some things that raise your eyebrows. If you hear news here and there and do not relate them, they are just news. But when you relate them, this is a different story. Like this one.
This summer-fall Apple was trying to convince the government to spend more on research and development projects saying that many great things came out of defense projects (I guess, they liked Siri). Let me say it this way. Apple asks the government to spend more money on research and development hoping to get some benefits. A few weeks later Apple, Google, and Cisco (yes, no fight there, full agreement) tries to press the government for a 1 trillion tax holiday (or roughly $3.3K per capita). What is wrong in this picture? The companies want to get benefits from the government spending on research and they do not want to pay for this. Guess, who is going to pay for this? You, taxpayer.
How about spending your own money on research? Should I mention that Apple, if it were a hedge fund, would be the largest one? Apple has more money to spend than the US government. And this is a company (along with others though) that asks the government to spend on research and $1T tax holiday???
Disclaimer: I am not one of the Occupiers.
The echo of tensions between Google and China still continues to sound. Today Harvard Business School published an interview of John A. Quelch, Harvard Business School professor, who along with research associate Katherine E. Jocz, have just published a case study “Google in China”. First, I would like to admit that I have not read this case study and my opinion is based on this interview.
I agree that Google may have acted without giving due consideration to the impact of the announcement. However, I think there is some misunderstanding on the technical side. I wrote that Chinese Great Firewall does not filter IPv6 traffic and Google started rolling out IPv6 support on a number of sites. So even with closing google.cn, users in China would continue to be able to use google.com although in English.
Google responded to a hacking attack and used the best tool available. I think the scope of this dispute should be discussed within these limits. This was not the first attack on Google from China and it is unlikely Google did not ask the Chinese government to investigate previous attacks. Google had not seen any meaningful actions to previous requests to China to take actions, and, after getting a severe attack, when Google actually lost some sensitive information, consequences for Google might be far more damaging outside China had the news started spreading out without seeing Google taking a harder stance. The probability that information about the attack of such a magnitude will leak to the media is high given a number of IT security companies hired to investigate the incident. Google did the right thing announcing the details and their intention to act on the party (Chinese government) that was able to prevent the attack, but did not anything.
Nonetheless, I think Google came out as a winner in this dispute. There search results cannot be filtered in China (still except google.cn) with the roll out of IPv6 support. This was done as a technical change, not political, at least publicly. In addition, the Chinese government started talking about actions although with a 3-month delay.
Kind of. There is a lot of noise about tensions between Google and China still going on, but I have not seen anyone linking a couple of facts. Google quietly turned on IPv6 support for YouTube. It is a known fact that the Great Firewall in China cannot filter IPv6 traffic. This explains why YouTube saw a spike in traffic.