Google, Intel, Microsoft, and Yahoo represent the four pillars of personal computing circa 2006... Intel [is] a proxy for AMD... Microsoft is a proxy for Apple.
He's basically talking about business models with these pillars and proxies.
He goes on to say IBM is dying on the vine.
Then I like this whole section:
Where Microsoft's theory of business is built around the platform and its domination, Google has built a theory of business that is independent of the platform, and therefore their software runs (or can run) on any platform. The issue around "advertising based revenue" isn't really the key differentiator. What counts is that for Microsoft the platform is the PC while for Google the platform is the Internet and nobody can hope to control the Internet -- not Microsoft OR Google.I'm especially interested in the end of this quote:
Given that Google can't practically aspire to control the Internet and Microsoft can't NOT aspire to control it, Google already has a vastly lighter load to carry.
So Microsoft can build software for a handheld or tablet computer, a mobile phone or a TV set-top box and even though the wrapper is different, the feel is always very much the same -- that of a fat PC client. Microsoft can't allow a phone to be a phone because they can't dominate and control a plain old phone unless it is more Windows than phone. That's a problem.
But not for Google, which couldn't care less about the phone OR the content (that's back to Yahoo, again). Google cares about the DATA. There is a key difference here between data and content. Content is stored and retrieved while data is generated. Google is about generating custom data based on applying proprietary algorithms. THAT's their theory of business, no matter how that data is ultimately paid for or by whom.
I think what he's getting at here is, in a globalized economy where so many jobs in manufacturing and service can be outsourced, where we're moving to a post-service or post-white-collar, post-something economy (how's that for profound! ;-) what will we move on to? Or will America, where it costs more to do business, be canibalized by cheaper global labor pools?
Maybe Microsoft's new Internet ad business will turn the tide. Wrong! How many web sites do you visit primarily for the advertising? Not anything from Microsoft to be sure, yet that's essentially what people do with Google - going TO the ads.
And look at those Google ads. Here's the most important key to Google's success: Most Google advertisers don't advertise ANYWHERE else. Its mainly small and medium sized companies whose advertisements the average person would NEVER have seen before the Internet. Google is making a ton of money from people who never advertised before. Heck, Google is making a ton of money from people who never were even in business before. This is not only a fundamental change in how advertising is done; it is a fundamental change in how BUSINESS is done.
I'm counting on Google and eBay to save America.
Some people are saying we need a rising creative class. I think that's part of it. And I hope this is, too: Technological innovation. 'Generating customized data'.
Then he closes with a caution for Google:
Meaty stuff to think about.
That's a survival strategy for Microsoft. Now here's a failure strategy for Google. While not intending so much to create a platform, Google has done just that. And once you control a platform, the way to best leverage that control is by sharing the platform generously. Google is right now the basis of much Web 2.0 creativity from third-party firms -- every one of which is afraid that they'll be put out of business next month by Google rolling-out its own version of whatever that ISV has built and proved. That's the Microsoft domination model, so why not? Because it poisons the well, that's why not.
It is great for Google to buy-up these little firms making millionaires along the way, but Google's obsession with reinventing the wheel might hurt them over time. I hope they are smart about this, but I fear that they aren't, and that Google's own vertical obsession might hamper their growth.