Google is a Media Company
By Tom Foremski - August 12, 2008
The recent New York Times article "Is Google a Media Company?" reports on Google's recent launch of Knol, a Wikipedia-like service launched last month.
While Knol is only three weeks old and still relatively obscure, it has already rekindled fears among some media companies that Google is increasingly becoming a competitor. They foresee Google’s becoming a powerful rival that not only owns a growing number of content properties, including YouTube, the top online video site, and Blogger, a leading blogging service, but also holds the keys to directing users around the Web.
“If in fact a Google property is taking money away from Google’s partners, that is a real problem,” said Wenda Harris Millard, the co-chief executive of Martha Stewart Living Omnimedia.
A Google spokesperson, Gabriel Stricker says, "We are not interested in owning or creating content." This is a strange statement to make since the article points out that Google owns YouTube and much more.
Foremski's Take:
For the past four years I've been saying that Google, Yahoo and many other large Internet companies such as AOL, and eBay are media companies. They publish pages of content with advertising around it.
The fact of owning or not owning the content is a red herring. Either way, Google publishes pages of content with advertising around it. How is that not a media company?
GOOG is not a technology company. What technology can you buy from Google? I can buy a database from Oracle--that's a technology company. I can buy microprocessors from Intel--that's a technology company. What technology can you buy from Google?
Google is a technology-enabled media company. It won't create its own content. It mostly scrapes its content from the Internet, or collects it from users of Youtube, etc, and sells advertising around it. How it gets its content is not important, it is still a media company.
Why does Google insist it isn't a media company? Because large media companies such as the New York Times outsource a large part of their online advertising to Google.
Would the New York Times outsource its advertising to another media company such as Tribune or Gannett? Certainly not.
But Google can get away with it provided it is not viewed as a media company but as a technology company.
Again, I'll ask, what technology can you buy from Google? Google publishes pages of content with advertising around it. How is that not a media company?
By Tom Foremski - August 12, 2008 | Permalink | Comment
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Comments (3)
Unless you're into defining categories, the question of whether or not Google is a media or a technology company isn't really interesting. Companies grow into many different areas and therefore defy categorization (is MSFT an enterprise or consumer software company? For that matter, is GM a car company or a financing company and pension fund that also happens to sell some cars?)
But to answer your question directly, you can buy (license) Google search technology for your website or intranet. It is probably a very small part of their revenues, but they do have some enterprise solutions based on search.
What you consume from Google is search. Google's technology makes search more relevant and they are therefore able to sell ads based on that search. The fact that you consume the search technology for free because it is subsidized by ads doesn't make it any less of a technology play.
If Google had poorer search technology, then the value of the search, and the value of pairing ads with search would be less to both advertisers and consumers.
So the content they are really serving up (and making money off of) is search results. Does the fact this is accompanied by ad make Google a media company? Who cares? The key issue is that were it not for the technology, the whole value proposition would fall apart (reference: see Yahoo!)
Posted: August 12, 2008 2:44 PM
What can I buy from Google? An enterprise search appliance, if I was so minded.
Posted: August 13, 2008 2:48 AM
Ron: The branding of Google is interesting because if it were recognized as a media company the media industry might get a clue about the mess it is in. Google is leading the commoditization of content trend. And it's interesting Google doesn't want to be seen as a media company because it wouldn't be good for business.
Ethan: Yes, you are right I can buy a search appliance box but that's less than 1 percent of its revenues. It doesn't make it a technology company...
Posted: August 13, 2008 6:22 PM