How Google will die

Lately I’ve been talking with Johan Stokking about several interesting things. One point was the growing the Internet bubble that is growing at the moment. The current bubble will grow larger than the previous one, and also will have more impact if it bursts.

I’m talking about all Web 2.0 companies, like Google but also several others. Those companies are interesting because they are personal. People can do things in a personalized environment, a huge difference from static web pages. One point to care about is the privacy. There is a lot of discussion around Google and that kind of thing (so I won’t go into depth about this).

But there is even a larger problem those Web 2.0 companies need to solve, if it even is solvable. I’m talking about advertisements. People hate them, even when they are personalized. All those Web 2.0 companies rely on those advertisements. Also business plans of new Web 2.0 sites include being purchased by Google (or Yahoo, etc).
The popular Firefox extension AdBlock can easily block advertisements on a web page. Several websites blocked Firefox because of that extension. Something I think it indicates the need of the web site owners to display advertisements, as well as the need of the people who browse to block the advertisements.

So, when will Google die? I don’t know. But for a company where over 99 percent of the incoming money is earned from advertisements, it is just waiting for the day people stand up and advocate their own privacy.

Posted on Friday, August 17th, 2007 in Marketing, Socialization, E-commerce
Comments and trackbacks are welcome.

9 responses to How Google will die

Google certainly needs to think about other ways to gain revenue. If an internet service or product is good, why wouldn’t people buy for it? Because they can’t touch it? People tend to forget that some things just cost money. For instance, why paying for a hard disk and not for an operating system? Spam and internet advertisements are there because people want everything they see on their monitor for free. Spam and internet advertisements are required to serve people for free.

As Arjan stated, many households are indirectly being supported by internet advertisements - much more than during the first internet hype. This time, when the “Web 2.0 bubble” bursts because people just don’t want to see “personalized” advertisements everywhere anymore, want to communicate in real life instead of using personalized internet profiles and finally realise that there are better things to do in life than watching videos on YouTube, everyone depending on in this industry has a big problem. I don’t think this is far away.

About two years ago, Adobe aquired Macromedia for $ 3.4 billion. Macromedia made professional software and made good profits. Macromedia was a healthy company and, regardless of the monopoly of Adobe and Macromedia, $ 3.4 billion can be considered as a fair price.

In contrast, Google aquired DoubleClick several months ago for $ 3.1 billion. For many years, DoubleClick was the internet advertisement company. Their core business was buying and selling web space for advertisements. What is so valuable about that? Their service is not unique or outstanding, so $ 3.1 billion must be the value of the amount of end-users they reach with their advertisements. These end-users hate advertisements and being tracked on the internet. Internet advertisers rely on the tolerance of their audience. This tolerance will vanish - it will only be a matter of time.

As a direct result, the internet advertising industry collapses which will result in the burst of the second internet bubble.

As stated above, people should realise that consuming products and services on the internet cost money as well. Fortunately, people start to realise this; more and more people buy music online. Now, iTunes doesn’t have annoying advertisements.

To conclude, advertisement blocking software becomes more and more intelligent and, if it is not already, will be embedded in standard browsers very soon - the popup blocker is already.

My advise for Web 2.0 companies is as follows: focus on unique services and products with value for people. They will pay you just like they pay for food.

To conclude, the homepage of the biggest internet advertiser, Google, became so popular because of it’s simplicity (no advertisements).
Johan Stokking said on August 17th, 2007.
Nice examples Johan :) I haven’t any additions to them.

I also am very happy people start to actually buy things they can’t touch. I’ve written an article on that a long time ago.
Arjan Eising said on August 17th, 2007.
Just a quick note regarding the whole Why Firefox is blocked nonsense: We’re there really sites blocking and redirecting Firefox users to that site? I thought it was either a joke or some ignorant Troll. I haven’t come across a single site that actually participates in this “campaign”, and it’s pretty obvious no one is serious about it…
Tom said on August 21st, 2007.
No, I’m not really sure if some sites use this kind of blocking. But it is a message from site owners they need money to survive. But since people don’t want all those ads, they need to find another way to make money.

By the way, the news that Google added ads to the YouTube videos was not a great move, since much critique came from the users of YouTube.
Arjan Eising said on August 23rd, 2007.
I think everyone is fairly aware that advertising isnt the best business model, but it seems to be working well for Google. And I dont think you need to undervalue personalised advertisement, its not that people really hate Google Ads, they are not really annoyed. They simply stop seeing them.

That is were the biggest problem is, because when people start getting used to seeing certain elements they will stop paying to much attention to it. I think you shouldnt look at tolerance beign such a big contributor to the colapse of advertising, since people dont care. They simply dont care, apart from ofcourse tracking cookies or something like that, if its done server side with good privacy there shouldnt be any problems. Apart from a few old guys shouting.

Were as advertising will keep inovating and at some point become so relevant in context and content that in someway or another it will stay valuable and be way more valuable to the user. I think users essentially accept the fact that advertising is needed to keep the site up, were as unique services have future I dont see anyone paying for 10/20 diffrent services anytime soon.

What Johan is pointing towards is in my eyes not realizing how important free is. Competing with free isnt easy, but its certainly possible. People know whats important to them and if its woth paying for they will, but there expectations of a “unique” service are many times more then they can deliver.

Adblockers will always be around, but I really dont see anyone annoyed by google ads other then the webmasters shouting they dont generate enough renevue from it. Banners ofcourse lack some future, but I wont say completly that all banner ads are bad, people simply ignore them already - therefor less valuable
Bojhan Somers said on September 13th, 2007.
Thanks for your comment Bojhan.

It’s not the point everything should be free. But if a company develops a great service or product, why not pay for it? Websites like Flickr and LinkedIn allow everybody to use their free services. But if you are a pro-user it is likely to upgrade to a paid account.

Paid accounts are in my opinion better than advertisements. As you said, people don’t ’see’ the advertisements any more.
Arjan Eising said on September 15th, 2007.
If browsers want to block content, they always have this possibility. If a website want something, it depends on the browser. So I think these Google businesses will die.
Website maken said on October 27th, 2007.
hey anyone know why google relocates my results when I click on them and sends me to some useless add which 99.9% of the world wouldnt care about?
And it seems to be the only search engine doing this.. a little too willing to die off, no?
kody said on January 25th, 2011.
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eleanor shaw said on June 13th, 2011.

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How Google will die

9 responses to How Google will die

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