2. Overview
History
Abundance Product Development
Max Strategy
Complementary Products
“Free” by Chris Anderson
- Free PDF / Amazon / Free Audio Book
3. Timeline
1999-2001
- Invent search that gets better with web scale
2001-2003
- Self service ads on searches
2003-Present
- Services: extend reach and customer attachment
- Advertize where it it makes sense
4. Google Today
Last year Google
- $60M revenue
- $14B income
- 46K employees
Feb 2014
- 2nd Biggest company in the world $395.4B
- Apple first at $463.6B
5. Abundance Product
Development
“Would it be cool?”
Product ideas com from engineering
- Google 20%
- What can be done?
- Would it be cool?
- Will people like it?
- NOT: Will it make money?
Sound crazy?
- Maybe for GM or GE
- Just way of life for Google
Monetization
- Popular products are analyzed later for monetization options
6. Max strategy
Eric Schmidt, CEO Google
- Max Strategy:
“Take whatever you are doing and do it to the max in terms of distribution. The
other way of saying this is that since the marginal cost of distribution is free, you
might as well put things everywhere.”
E.g. Marketing “The Sopranos” with HBO
- Facebook page
- Viral videos
- Extra footage
- Plot updates via twitter
- Website where they can learn more about the characters
- Unused scenes on YouTube
- Competition on which scene should have been in
- Etc…
“Fill every crack in every pavement”
7. “Max” needs an
monetization engine
Sopranos -> HBO
Google -> Adsense / Adwords
Your business you either:
- Build your own
- Leverage 3rd party
- Partner
- Acquisition
8. Complimentary products
In economics, a complementary good is a good with a negative cross elasticity of
demand. This means a good's demand is increased when the price of another good is
decreased. Wikipedia
9. Google News
Google products are “Complementary” to its search ads
“The initial studies on Google News said that people were twice as likely to click on
search ads on a subsequent search, so everyone said , ‘Great’. It a loss leader – a traffic
getter. Sure it’s a service to the world and so forth, but a more sophisticated view of
that is to say that the product is not Google News but Google. It’s all about
engagement into Google and that if we can get you, at some point in your
engagement with Google, to end up using Google for something that we can then
monetize, the sums work.”
-- Schmidt
Google wants information to be free because as the cost of information falls it makes
more money
- Nicholas Carr “The Big Switch”
10. Scale
Reduces marginal costs
- CPU, storage and bandwidth low and falling
- Everything Google does is cheaper
Easy to trial new products
- Betas
- Massive customer trials
- Kill failures quickly…they are cheap
Only way to grow is to increase Web usage
- Free WiFi
- Free internet access
- More ways to use internet for more things
11. Google strategy
Build cool products
- Figure out quickly if people like them
- Kill off failures
Grow and audience
Think about monetization
- In-house economists and biz strategists
Products
- Canceled due to lack of uptake
- Or not cool enough
- Never because they won’t make money
12. Overview
History
Abundance Product Development
Max Strategy
Complementary Products
“Free” by Chris Anderson
- Free PDF / Amazon / Free Audio Book