Google's $1.65bn branding exercise
So Google acquired YouTube even though it had the capability to build a YouTube clone and already had a Google Video service.
Many people are saying that Google Video was launched too late to win back the market share from YouTube, but they are missing what I think is an expensive ideological flaw in how Google and Yahoo go about doing things.
The scenario has been repeated again and again. Google/Yahoo launches a service, some independent company launches a similar service, the other service becomes more popular, Google/Yahoo acquires that company.
But on the internet, the only thing they are really buying is a brand and visitors loyal to that brand.
The fundamental ideological flaw is that Google and Yahoo! are brands associated with search primarily, and after a long hard struggle (and Microsoft's mis-managment of Hotmail)you could argue -- email.
So what does a teenager want to upload their webcam video to? A search-engine, or some cool new service that 'does what it says on the tin' ? Enter Flickr (instead of Yahoo! pictures) or YouTube (instead of Google Video).
The obvious thing, in my mind, for Google or Yahoo! to do in the future, is to launch new products under a different brand. Then use their big budgets for marketing these brands instead of acquiring new ones.
1 Comments:
Surely the whole point is that no one knows what the BIG products are going to be beforehand. If Google or Yahoo knew how big YouTube would become, they would have pushed their own offerings years ago, and YouTube would have died before it really began.
Same with Blogger. It wasn't obvious 10 years ago that blogging would take off like it has.
No doubt there are small startups out there now working on something that the guys at Google and Yahoo think is a waste of time, and no doubt 2 years from now they'll be shelling out big bucks to buy these companies.
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