Is Google mad?

[Kevin N Smith]

This is a TDLR post, including multiple sections.. Don't know what forum this goes in.

WHY DID I POST THIS?
So, they host an I/O full of bragging and hypocritical comments about our platform. Then, they send a letter about removing Microsofts YouTube app. Funny thing about that is that thousands ANDROID YouTube apps/downloaders violate the same TOS. They aren't removed. Then Google goes on to drop Gtalk support in outlook, something MS added a few days ago. A few days ago, I was increasingly frustrated with WPs progress in getting apps, and even had a few scary thoughts about moving back to android. That lasted up until these last few announcements. I will never, and never plan to move back to such an EVIL company. I am happy still google free and enjoying it.

GOOGLE BEING SCROOGLED:
Now, if google would use common sense, they could figure out that there is an increasing anti-google movement (spearheaded by Microsoft's scroogled campaign and Google's own monopoly-like actions). They seem to just buy out a company (Like YouTube) and then just hold it down and prevent innovation. This anti-google movement, as I call it, would have probably never happened if they didn't act like a MONOPOLY that ABUSES ITS PRIVILEGES to shut down services that users love and make more money.

WP AND GOOGLE SERVICES:
While google continues to gain traction, MS is also doing this. What google can't realize is that about every 5 new WP users is 3 less google users. Why? BECAUSE WP USERS CANNOT ACCESS GOOGLE SERVICES. When an average user can't use the service they love, they look for alternatives like Outlook, Skype, and Bing. Now, this brings me to the point of this post....

IS GOOGLE MAD?
As WP gains traction and W8 continues to be adopted, this produces a snowball effect when users find out how integrated MS services are into their OS. This makes more people quit using google. Sometimes, they might subconsciously hit the hardware button that says "Search" instead of taking the time to go to google.com.

IS GOOGLE MAD? PART 2: SABOTAGE
Because the rise of Microsoft is a lose-lose for Google, they are beginning to sabotage the platform. This sabotage keeps hardcore google service users away from the platform, leaving the only room for us to grow from is new phone users and iOS users.

(Sorry, the bottom line part was cut off)

Google sees this issue and is now acting to save their a**.


BOTTOM LINE:

 

[OzRob]

Not really sure what your point is. No, Google is not mad. It's the dominant company in a marketplace and wants to defend its territory. Is it playing 'hardball' with Microsoft? Yes, probably. Does it care whether it loses a handful of Google apps users to Windows live services and the WP8 ecosystem? Probably not. At least not at this stage. If WP8 uptake continues and accelerates, perhaps Google will revise its thinking. At the moment it's just small change for Google, and it would most likely accept p!ssing off a few of its millions of Google services users to stifle the uptake of WP.

Keep in mind that Microsoft is no startup with limited resources. And it's no stranger to playing hardball itself (anyone remember the 'browser wars' and various anti-trust suits?).

What we're seeing is a couple of bull elephants locking tusks and jockying for position. Unfortunately all we can do is try not to get squashed under their feet as they go about their maneuvers.

 

[falconrap]

With WP on course to hit roughly 50 million users by year end (at least at the current growth rate - something I predict will actually accelerate) Google stands to tick off a lot of people who likely use their services daily. Maybe it's time they put their big boy pants on and learn how to maximize their user base by producing a better product and making it as widely available as possible. It's kind of how they got here in the first place.

 

[aubreyq]

It appears to me that Microsoft was baiting Google by releasing the app and anticipated this kind of public response so Microsoft could call out Google again on their unwillingness to throw Microsoft a bone. Notice how MS took advantage of Larry Paige talking about interoperability and referenced that in their public reply today. Well played by MS.

 

[Kevin N Smith]

With WP on course to hit roughly 50 million users by year end (at least at the current growth rate - something I predict will actually accelerate) Google stands to tick off a lot of people who likely use their services daily. Maybe it's time they put their big boy pants on and learn how to maximize their user base by producing a better product and making it as widely available as possible. It's kind of how they got here in the first place.

WWhere is the 50m stat from?

 

[Kevin N Smith]

It appears to me that Microsoft was baiting Google by releasing the app and anticipated this kind of public response so Microsoft could call out Google again on their unwillingness to throw Microsoft a bone. Notice how MS took advantage of Larry Paige talking about interoperability and referenced that in their public reply today. Well played by MS.

MS replied to this letter?

 

[aubreyq]

@Instigator: Yep! http://mobile.theverge.com/2013/5/1...onds-to-youtube-windows-phone-takedown-notice

 

[OzRob]

Maybe it's time they put their big boy pants on and learn how to maximize their user base by producing a better product and making it as widely available as possible. It's kind of how they got here in the first place.

It certainly is how it "got there" in the first place. Unfortunately once a company has got there, it takes different strategies and tactics to "stay there".

 

[OzRob]

@Instigator: Yep! Microsoft responds to YouTube demands, 'more than happy' to include ads if Google allows it | The Verge

And so the maneuvering and gamesmanship continues...

 

[falconrap]

WWhere is the 50m stat from?

There were roughly 25 million users at the end of 2012. Add 5-6 million for fist quarter, extrapolate the growth for the following quarters and you get roughly 8mil this Q, 12 mil, the next Q, and you are already at 50 million users of WP7 and 8. Q4 would likely add further, so 50 million is really a minimum for the end of the year. Even a 5+6+7+8 million (1Q - 4Q) would put the user base at around 51 million. In all honesty, I think we could be looking at closer to 70 million at the end of the year if Verizon pushes it like the employees noted it plans to.

Even now, Google is messing with around 30 million users. Not smart.

 

[aubreyq]

And so the maneuvering and gamesmanship continues...

Indeed! Here's more: http://m.windowsitpro.com/paul-thur...+windowsitpro/wininfo+(WIN>News>WinInfo+News)

 

[aubreyq]

https://twitter.com/thurrott/status/334824567942037504

https://twitter.com/thurrott/status/334823025943904256

 

[OzRob]

Even now, Google is messing with around 30 million users. Not smart.

And this is what percentage of the overall market for smart phones?

Last report I read, WP was sitting somewhere around 3% market share, with Android upwards of 70%. WP is certainly growing fast at the moment, but it's starting from a low base. So as I said before, Google will probably not be worried about annoying somewhat less that 3% of potential users (I say somewhat less because not all WP users will have or want to use Google services, and a certain percentage that do use some of the Google offerings like YouTube will be happy with what's available on WP at the moment).

 

[Ridlah]

A cartoon I thought I should share

 

[a5cent]

Interesting posts people! Thanks!

With WP on course to hit roughly 50 million users by year end (at least at the current growth rate - something I predict will actually accelerate) Google stands to tick off a lot of people who likely use their services daily.

If all consumers were as clued in, I would agree. I think the default reaction will be: "What? That doesn't work? Okay, I'll return this crap WP device and go back to Android". I'm sure that is what Google is counting on. In many cases that is exactly what will happen. We've already seen quite a few such reactions, even here at WPC, one need look no further than the Trident vs. WebKit battle.

IS GOOGLE MAD?

No. Large international companies aren't that unprofessional. Google is simply leveraging their newfound power and resorting to the exact same type of tactics that Microsoft employed back in the 90's, except Google is doing so on an even larger scale due to the ubiquity of the internet.

The company holding the longer stick will gladly use every opportunity to make the digital lives of their competitions customers a little less care free, as long as they don't have to be too obvious about it. In the complicated world of computing that is surprisingly simple.

Google's actions are just plain old free market competition and good business sense... that doesn't make it any more endearing to the WP minority.

 

[falconrap]

And this is what percentage of the overall market for smart phones?

Last report I read, WP was sitting somewhere around 3% market share, with Android upwards of 70%. WP is certainly growing fast at the moment, but it's starting from a low base. So as I said before, Google will probably not be worried about annoying somewhat less that 3% of potential users (I say somewhat less because not all WP users will have or want to use Google services, and a certain percentage that do use some of the Google offerings like YouTube will be happy with what's available on WP at the moment).

Seriously? Percentages mean squat when we are talking raw dollars. If they simply made $1 per user, per quarter, due to add revenue, but are losing that revenue by not allowing a proper client, then you are looking at $120M per year in lost revenue. At $0.50 per Q, you're looking at $60M per year. It's not about the percentage...it's about the raw numbers. If your margins aren't great, why in the heck would you NOT allow MS to basically do all the work for you, and provide you with a huge chunk of change every year?

Market share is only a good measure for certain things. A business isn't in place to have gain market share. They exist to maximize profits on investments...period. Apple is a perfect example. They don't care if they have the top market share...just that they have a strong growing user base that keeps adding to their revenue stream and upping their profits. This is why Google is being stupid here. If WP isn't really a threat, then why not let MS add to your revenues and profit margins?

 

[a5cent]

Percentages mean squat when we are talking raw dollars. If they simply made $1 per user, per quarter, due to add revenue, but are losing that revenue by not allowing a proper client, then you are looking at $120M per year in lost revenue. At $0.50 per Q, you're looking at $60M per year. It's not about the percentage...it's about the raw numbers. If your margins aren't great, why in the heck would you NOT allow MS to basically do all the work for you, and provide you with a huge chunk of change every year?

While I completely agree, you're only looking at one side of the equation. Locking "customers" into the Android ecosystem by making it harder for them to switch also carries a lot of revenue potential, not to mention that every person with an Android device contributes a lot more to Google's user profiles (used for add targeting) than a person with a WP device.

Your calculation must consider not just the profits to be had from WP users today, but also those to be had from discouraging WP's growth and minimizing WP's future market share.

I have no idea what that cost calculation looks like, but I'm willing to bet that $120 million is nothing compared to the profit potential of more lock-in and lower WP market share.

 

[OzRob]

If WP isn't really a threat, then why not let MS add to your revenues and profit margins?

Because what WP could currently potentially add to Google's revenues and profit margins is a drop in the ocean. Google has its eye on the future. If it can stifle WP in the short term it hampers Microsoft's play to become an effective multi-platform cloud services platform. It's not about WP, it's about the backend services that people use. Google makes its money from the data it collects from people using its services. MS is trying to compete in this market. MS would like everyone to use Bing, Outlook.com, SkyDrive etc. Google would like everyone to use Google Search, Gmail, Drive, etc. Google knows that allowing MS to get more than toe-hold in the smartphone market means MS has greater leverage to draw users into the MS ecosystem in the longer term. MS knows that having easy access to Google's services in the short term will make it easier for people to switch to WP, which will allow them to build market share and therefore build leverage to migrate them to MS services in the future.

Hence the current head-butting match.

 

[falconrap]

Yes, but if Google believes that, then they have a flawed strategy. One look at the various surveys indicate that Android has a problem with users not particularly keen on staying with it. Further, iOS and BB would be in the same boat as WP, but they are ignored. Not too mention MS makes more money off Android, it seems, than Google.

The real problem for Google is that MS has just made the ultimate "anti-competitive practices" play. MS can, if Google continues to prevent API access, take this straight to the DOJ and the EU and show them just how anti-competitive Google is being. This is what it is really all about. MS just backed them into a corner. Google's most profitable play is to maximize revenue by allowing MS more access to it's services. The more Google fights MS, the more likely they are to get screwed by regulators, and the more likely MS is to develop services that blow Google's services away and take more revenue potential away from them (see Outlook.com and SkyDrive, both, in my opinion, far superior to the Google alternatives). MS is making it's competitive services available on other platforms as well, meaning Google is in even deeper trouble trying to lock users in.

What happens if MS goes gung ho and purchases someone like Vimeo, and makes the service a top notch one? Now Google is going to start loosing marketshare and ad revenues in that arena. MS has the cash flow to do this, so Google needs to watch what they are doing. So far everything they have done is just childish moves based on hate/dislike, as opposed to making sound business decisions.

 

[OzRob]

Yes, but if Google believes that, then they have a flawed strategy. One look at the various surveys indicate that Android has a problem with users not particularly keen on staying with it.

And one look at accelerated growth figures for smartphones overall, and Android taking the increasing lions share of that growth, would say that's not a significant issue at the moment,

Further, iOS and BB would be in the same boat as WP, but they are ignored. Not too mention MS makes more money off Android, it seems, than Google.

MS has three things Apple and Blackberry don't have - dominance on the desktop, dominance with office applications, and dominance in the server market. As I said before, the end game here is not about dominance of the smartphone market, it's about convergence of devices. In that respect, MS are far more dangerous to Google.

The real problem for Google is that MS has just made the ultimate "anti-competitive practices" play. MS can, if Google continues to prevent API access, take this straight to the DOJ and the EU and show them just how anti-competitive Google is being.

LOL. And I'm sure the irony of that would not be lost either Google or Microsoft.

This is what it is really all about. MS just backed them into a corner. Google's most profitable play is to maximize revenue by allowing MS more access to it's services. The more Google fights MS, the more likely they are to get screwed by regulators, and the more likely MS is to develop services that blow Google's services away and take more revenue potential away from them (see Outlook.com and SkyDrive, both, in my opinion, far superior to the Google alternatives). MS is making it's competitive services available on other platforms as well, meaning Google is in even deeper trouble trying to lock users in.

What happens if MS goes gung ho and purchases someone like Vimeo, and makes the service a top notch one? Now Google is going to start loosing marketshare and ad revenues in that arena. MS has the cash flow to do this, so Google needs to watch what they are doing. So far everything they have done is just childish moves based on hate/dislike, as opposed to making sound business decisions.

And that pretty neatly sums up why Google shouldn't let Microsoft get traction in the smartphone market. If you think Microsoft will STOP trying to lure people away from Google services just because Google plays nice with WP, then I'd say you're living in different OS than I am.

And the whole 'anti-competitive' thing is a bit of a side issues in this debate. While Google are playing hard ball, there's nothing to support any action by the DOJ or similar bodies. So far all Google has done is pull support for ActiveSync in it's services, a protocol that it was paying licensing fees to MS to use, and insisted that, with respect to its YouTube app, MS abide by the terms and conditions set out in the API licensing. Neither of those would support any charge of anti-competitive behaviour as the DOJ would define it.