Growth5 Blog

Wednesday, June 9, 2010

Why Amazon Supports the iPad & Bing Can't Beat Google

Sean recently sent me this excellent post from Futurelab. The post is short and to the point – Amazon is fine with the iPad because Amazon is in the book seller and publisher business (along with you know, selling every product in the universe), so what do they care what medium people choose to buy and read their books; iPad, Kindle, e-readers... they're selling books.

As the author points out, "By the same logic, Microsoft will never win with Bing because it cannot afford to give away as much software functionality as Google does. Google can radically subsidize their Google Docs platform, GMail, and other functionality even at the enterprise level because the advertising model is so lucrative. Like the NYTimes before it, Microsoft will not be able to answer the upstart in the search market because to give away the core product, is too painful — it would be like asking Gillette to give away the razors."

Or asking Microsoft to give away Windows. With their market share, why would they? Of course, over time Microsoft will lose that market share to someone else or more likely something else. They are just hoping they can come up with replacement revenue by the time that happens.

By comparison, who would've thought good 'ol Microsoft Excel could be left in the dust by a product like Google Docs in the short period of time Google Docs has been in development. The functionality of Google Docs sprinted by Excel like it was standing still.

To be fair, Google has a one trick pony right now with advertising revenue (99 percent of all revenue), and everything else seems to be supporting that pretty fantastic trick. At least Google seems to have realized that no matter how great the trick, they can't stand still. And they're not.

Thanks Sean!

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