Hello GooTube

The long rumoured deal is finally done.....in a flow of (hopefully) lucidity I posted my thoughts on it here, Liz Ganne's article on Google's psychology prompted it.

Here it is repeated for the mouse challenged

Liz

I believe this is the day that Google officially handed over its crown as leader of the New Wave of Internet companies. It has now confirmed that it is becoming de facto Old Web Establishment.

This is their Netscape Moment, when it becomes clear they are not really in the vanguard for the next wave.

Heres why:

(i) They clearly no longer “get it” - they have developed N new businesses in the past few years , few of which have really taken off, while all around them a new wave of creativity has started apace.

(ii) I don’t know how much was spent on Google Video, but even with all their king’s horses and men, they couldn’t get it together and a bunch of guys came from nowhere and stole the show.

(iii) They have already IPO’d and it is now (very) clear that the cool stuff (and increasingly the wealth) is being created elsewhere - how to retain the creative talent will be an increasing issue…

(iv) …especially as the thundering herd of the rest of VC community now tries to back every Bubble 2.0 company going. A million flowers will bloom, many will wither but some will flourish…

(v) …and Google can’t buy them all. Its share of mind and money must be diluted.

End of an era, end of an S curve.

Past examples show that psychologically (unless Google is very unique) the company will move more into a defensive, conservative frame of mind to retain what it has.

It then becomes harder and harder to make innovative plays that count, as too often they will tread on existing Googletoes and be strangled at birth. It is the Way of Large Companies. Acquisition at high prices become the de facto path to growth.

But, the big difference between Google and Microsoft, the company they replaced as King of the Heap during “Web 1.0″, is that Microsoft had a far tighter grip on its users, via a baked in operating system, for over 15 years.

Search is much more open and at a very early stage, ditto personalised advertising - it is (in my opinion anyway) extremely unlikely that Google can stop large niches (or verticals as I believe the in word now is?) of the space being carved out by players with newer algorithms, metadata or customer data analytics.

And as for YouTube customer loyalty… (or its economics, come to mind - video is far more expensive to serve than search, and as yet YouTube has no real revenue model)

We do not yet know who the new King is (it wasn’t Netscape last time, they were the starting gun), but now the mantle is up for grabs.

Let the games commence!

Now, the thing I have started to ruminate on is the point I made above...in Web 1.0 it seemed the Web Browser was The Thing, but it turned out that searching for web sites, and the related ad revenue turned out to be the real gold mine.

If (and admittedly it is an if) this holds true for Web 2.0 then plays such as YouTube - and probably the whole social networking thing - are like Netscape, ie they are the preconditions that must exist for the Real Web 2.0 applications to take root.

I think this is true because, well, YouTube is cool but in the same way surfing early web sites was cool - novel, different but ultimately not useful....but it shows the way just as Netscape destroyed the Closed Garden and CD-ROM approaches to multimedia that were competing at the time. YouTube shows me that video media over the PC is the Way things will work....

MyPCTV Rules OK?