Today, I’ve read two great articles: the one over at Skrentablog delivers lots of reasons for Google continuing its internet dominance, while Michael Arrington at Techcrunch does his annual list of Web 2.0 companies he cannot live without.

Reading Mike’s list of essential Web 2.0 co’s, I couldn’t help but think that I can easily live without any of those companies. Or any other Web 1.0 or 2.0 company, however great it may be. Except one. You guessed it: Google. Let me explain.

Of course, there are many Web 2.0 services that I love and use everyday; for example Netvibes. But if Netvibes would vanish tomorrow, I’d simply switch to Pageflakes. Or maybe I’d go back to Daily Rotation, or I’d continue using Omea RSS reader. The same goes for practically every service out there. They’re all free, and many of them are great, but in all honesty they’re all easily replacable. Think you can’t live without YouTube? Just you wait, Metacafe and a thousand others are waiting to take its place should a chance ever appear (and it won’t, because Google bought YouTube).

And then it struck me. If I had to utter in one sentence what’s Google actually doing; why is it launching so many free services; what’s its business model, what are the intentions of the guys behind the company, it would be this: It’s trying to become the one company you cannot live without.

Zero switching cost?

You see, I believe in the zero switching cost theory, although Skrentablog wouldn’t agree with me. I believe in it because I’ve seen it happen - in Altavista. Anyone who was old enough to witness Altavista’s triumphal appearance on the net knows this. Altavista was, simply put, better than any other search engine and pretty much everyone started using it. It was faster and it gave more relevant results. It was simple to use. Myths were told about how many servers they have. Sites making fun of their names appeared, like Astalavista (no link because it’s an ad/popup hell). Sound familiar?

Altavista has been the Google of its age - until a better one, the real Google, appeared. Whoever tried it out immediately switched to Google - or so it seemed. It would be interesting to see the real statistics from those times, but it really was that simple. A new service appeared, it cost everyone zero dollars to switch so everyone switched, and thus came the Google era.

Google knows this, and that’s why they’re churning out all those free services. I’m not trying to invoke any of the ‘Google is evil’ imagery here, but it is pretty obvious that they’re giving out free candy not because they’re really, really good guys, but because they want something in return. Their monetization and business model is, in its essence, simple: they want users to give them data. Once you give them data, you depend on them.

As the recent incident with Gmail accounts getting erased has shown, people are very upset when such a thing happen. They have their emails in Gmail. This is important data - for many people their emails are the most important data they have on a PC.

Now look at other Google’s services and how they relate with this idea.

Google calendar - your appointments

Google Docs & Spreadsheets - your documents

Google YouTube - your videos

Google Reader - your RSS links and bookmarks

Google Blogger - your blog entries

etc.

This isn’t really new, many people noticed this and thought that Google simply wants to monetize our private data via targeted advertising or something similar. I don’t believe this is true. They simply want to avoid the zero switching cost trap and become…

The company you cannot live without

I have lots and lots of my stuff on Google’s servers. Of course, at this point I think that I’d easily survive if that stuff disappeared, but the trend is obvious. One day a tipping point will happen, and I won’t be able to get back. It won’t be the data itself, but the relation between all that data, or the way I use it; maybe in the form of a GoogleOS? In any way, it will be as hard to do as it was to stop using Windows. Sure, there are alternatives, like Linux, but it’s very, very hard for them to gain a huge following. The reason is simple: everything is already on Windows.

This is happening again, only the paradigm is shifting to the internet. Microsoft still may be a leader in the realm of the offline, but when you go online, you’re plugged into Google - it’s everywhere. Not only it is the place from which you visit all other places on the internet, as Skrentablog rightfully notices, but it is also the place in which you do all the stuff you regularly do on your computer. Or, better put, it’s not quite there yet, but it’s moving in the right direction.

So, what’s the outcome of this? Well, Google’s idea is to become unavoidable. They will continue to introduce new great services, and they will focus on the ones they find more relevant. They might buy some more existing services which are important to people, like Digg. And they will most definitely try to connect all these services in a way that makes it hard to switch to some other service provider. It will all, in the end, look like some sort of a GoogleOS: a full suite of easy to use, compatible applications, intertwined and to some degree dependant on each other. You will be able to use them independently, but they will become so much better when used combined.

Here’s a simple example: this blog was initially hosted on Google’s Blogger. While I was there, I used Google AdSense, not because I expected any real revenue, but simply because I could. Google provided this service in combination with Blogger, so I thought, lets try it out. When I decided to move from Blogger to Wordpress, I realized that if I’m gonna use free Wordpress hosting I can’t use AdSense. Once again, it’s not that I was making a lot, but it’s kinda hard to simply stop using such a great and free service. In the end I’ve moved to Wordpress platform but I paid for my own hosting. I got out of Google’s claws, so to say, but I actually paid real money to do it. When faced with such a choice, many users will simply give up and continue using what they were using before.

So, what will the users do? Well, as all this unfolds, they will enjoy the ride. There’s nothing wrong in using great, free services. It is, in my opinion, unlikely that Google will ever use their data or their loyalty for ‘evil’, however you define the term. However, users who want absolute freedom might grow more and more disgruntled at the fact that it’s becoming harder to use the alternatives, mostly because many of Google’s competitors will die out. This is almost a natural progression, and it happened with Microsoft’s Windows. It will be interesting to watch what will Google do to avoid this trap and still continue growing and extending its influence (because that’s what all companies do). In the meantime, users would do well, at the very least, to keep a backup of their stuff at home, and to always try to use two or three alternative services for the same purpose, however annoying it sometimes may seem.

This entry was posted on Tuesday, January 2nd, 2007 at 10:19 am and is filed under Reviews, Web, Web 2.0, Features. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.