Before his book, Ken Auletta did a piece for the New Yorker on Google, and I was shocked by it--mostly because Sergy Brin and Larry Page were so dissed by the Washington Establishmet. So, I'm very much enjoying listening to what Auletta has to say....
Auletta sees Google as a huge library--and so does the rest of the world (he discovered...)
The most important thing about Google, Auletta found in research, is the trust that they created. He's going into some detail about how advertising...
Something he learned about engineers: Google's engineers succeed because they start with the assumption that traditional ways of doing things are inefficient (what founders believe) They realized that information was media--that traditional media was inefficient. Newspapers are inefficient--printing and distribution of newspapers is inefficient.
Old media buys in big media really didn't know who was getting ads--just that lots of people got the ads. Google "messing with the magic" that old media relied on by showing who gets the ads!
Google's engineers ask: why not? Why not index all the books out there?
Google's engineers given 20% of their days to work on their own projects. An Indian engineer wonders why there's so little news on the Muslim world: hence, Google News.
Auletta outlines all the things that Google has revolutionized--and that old media was blind to or thought was "too expensive."
Most traditional media companies put engineers down on the food chain--too many levels below the CEO to be effective. Auletta would hire a really great engineer and put him at his elbow--and suggests CEOs should do that.
The Innovator's dilemma: do you sacrifice new business for something unproven? Old media has decided to preserve old business than sacrifice. And then blames the digital world for its woes!(Auletta)
Auletta: In the short run, what Google does for consumers is good. In the long run, though, if news/books become a commodity that can no longer be afforded to produce, consumers will suffer. User-generated content doesn't generate income--advertisers want content that is reliable. Google announced last week that it's going to start charging, on YouTube, for independent movies like Netflix.
Advertising won't pay for content. They--media outlets--are going to have to charge (micropayments mentioned.) After the recession, Eric Schmidt realized they would need more than just advertising and would have to figure out what to charge for. Auletta sees YouTube become a platform both for UGC and for pay content.
iTunes was terrific for music companies, but what about Apple Tablet? Will it really help media companies create a revenue stream?? Auletta's not giving an opinion on this here.
Google worries about social networking sites being the referral sites vs. Google's search results. Google is also concerned about government--and how government might intervene.
It took electricity 71 years to reach all of public. It took 50 plus years for telephone to reach public widely. But it took less time for the Internet and only 5 years for Facebook. Things moving very, very fast, scaring old media who should be (in Auletta's view) asking what's next? and looking at what Google's doing.
Note: I asked Auletta about privacy and how Google sees it: they see it mostly as information (so it's agnostic) but also that they will use information we put out there for targeted advertising. I wonder if we've come to a point where we should be advising young people to put less information online, regardless of what their friends want? Perhaps.....