Valleywag

Google's tactical error

RiskIn Risk, the game of world domination, there is one cardinal rule: never let your position look too strong, because the weaker players will combine to pull you down. That's the mistake that Google has made in taking on older media companies so unthinkingly.

The Mountain View search engine is terrifying enough as it is, to those media conglomerates with newspaper holdings, because it's eating into classifieds revenues. It was unnecessary, however, for Google to attack on quite so many other fronts: brokering radio advertising; alienating publishers by scanning in books whether they liked it or not; scaring telcos by blanketing cities with free wifi internet access.

These are all sensible or worthy projects but, by pursuing them all at once, Google has scared its competitors into eachother's arms. The Mountain View search engine is in much the position that Microsoft occupied in the late 1990s. The Redmond software company appeared to have interests in every field, from local city guides, to online magazines, to cable networks; Microsoft had few media friends when the government went after it for anti-trust violations. It was a giant, tied down by lilliputians.

How can Google escape Microsoft's fate? A simple answer: stage a tactical retreat. Probably not in online video, which has too much potential as an advertising medium. But how about, for an example, an admission that the dMarc acquisition was a mistake? dMarc was supposed to take Google into the radio advertising market; it's a marginal business for the search engine, which still makes almost all its revenue from buyers of cost-per-click text ads.

So sell it off. Engineer some other reverse. Appear humbled, fallible. Google may indeed conquer the entire world of media; but, this early in the game, it would be wise to lull its enemies. Until it can utterly destroy them.

9:39 AM on Thu Mar 22 2007
By Nick Denton
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