More Google roadkill!

There is a slew of articles today about the new phone from Verizon that is using the latest and greatest from Android. Plenty of places to hunt for info on that. This is not the realm of this blog to discuss it. What I want to talk about is what this type of movement by Google means for the startup community at large – especially in this region.

It used to be that one built something and then hoped to either make it alone or get bought out. Google is now showing that they are rich and smart enough to build versus buy. Their simple moves into a sector like GPS or driving devices, via the phone of course – are  creating severe market havoc:

Google released a new mobile navigation app today and GPS navigation companies such as Garmin And TomTom saw their shares take a plunge. The announcement shaved $1.2 billion off of Garmin’s market cap alone. Its shares are down more than 16 percent so far today to $31.60. TomTom’s shares are down 21 percent to $8.11.

Wow. Those are some big numbers. It could be a knee-jerk reaction but chances are this is just a longer term trend for this sector. The scarier part is wondering where will Google go next.

One can also see the games being played with the big guys in this space. Google is throwing their muscle around now and even Apple is not sure how to play it. I think we are seeing the beginning of the big companies now realizing, I knew it all along, that Google is more foe then friend. They want it all. End of story:

This is but the latest sign of a growing rift between Apple and Google. A couple years ago, when the iPhone first launched, Google and Apple had a strong partnership. At the time, Google CEO Eric Schmidt described the relationship as so close that it was akin to merging “without merging. Each company should do the absolutely best thing they can do every time.” Google supposedly didn’t need to creat its own phone, because it could simply create software for the iPhone. And, in fact, some of the best apps on the iPhone—Mail, Maps, YouTube, Search—were developed by Google.

What is interesting about this is Google and Apple probably did start out as friends but for Google to grow they have to start eating their friends or the space that their friends occupy. I think we saw this with Microsoft? I don’t bring these things up to lament the issues or to cry foul. This is the way the world works but I think people should consider how they use or build on top of Google since it looks like Google plans to do it all. I could be exaggerating here but I think if you look at where they started and where they are now it is pretty easy to see Google as a competitive threat in many areas.

One could turn this all around and take the perspective that Google is just being an innovator, destroying old market models and providing a way forward for anyone and everyone. That seems to be the angle TechCrunch has here:

His words echo Arthur C. Clarke’s famous quote “Any sufficiently advanced technology is indistinguishable from magic.” Schmidt says that today’s mobile platforms are so powerful that when combined with a robust cloud service they can do “magical things.” And he encourages people not to limit their imaginations when thinking of new applications to serve people.
Inspiring stuff for people out there thinking up the future.

His words echo Arthur C. Clarke’s famous quote “Any sufficiently advanced technology is indistinguishable from magic.” Schmidt says that today’s mobile platforms are so powerful that when combined with a robust cloud service they can do “magical things.” And he encourages people not to limit their imaginations when thinking of new applications to serve people.

Inspiring stuff for people out there thinking up the future.

I guess that makes sense providing you don’t try and build something similar to what Google is doing or may plan to do in the next 5 years. My advice – think very hard about what you plan to do or build since you don’t want to be roadkill.

I am sure TomTom was not expecting the tire tracks on their back today.

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2 thoughts on “More Google roadkill!

  1. Hmmm, google is becoming pushy. They have such a strong position in search, that gives them the resources to go into (all?) The tangent areas..

    Microsoft started out with the operating system and in recent years tried to make it in the internet – with (is it fair to say?) limited success.

    Google appears to be coming from the other side. They started with search and are going into OS/apps/phones/navigation now.

    In both cases microsoft and google were starting from a very strong position in one area and going into other tangeant areas. Success, however, is not so easy to replicate. Also, it’s probably only a matter of time before competition authorities (at the very least in the EU) start considering google too powerful.

    As you say, google partners – who so far have felt unthreatened – beware!

    1. filip – thanks for the comment. interesting stuff. check out this link:

      http://www.techcrunch.com/2009/10/30/how-cloudmade-will-deal-with-google-navigation-monster/

      I like these quotes:

      Earlier on this year a smart VC, who multiple times has competed successfully against Google, told me that Google is generally willing to act as an “irrational economic player”. It’s willing to destroy value just so others can’t get at it, even if it means destroying value for itself.

      Google just announced that it will offer navigation. Navigation has so far captured 70%+ of the $2 billion mapping market. The bad news for established navigation players like Tele Atlas and Navteq is that this will erode the value of navigation, just like the value of maps have been eroded. The good news for those players is that Google has now tipped its hand and shown that it’s willing to compete against the very ecosystem that it has been nurturing over the past couple of years.

      and…

      Meanwhile, in the process of building out end-user applications rather than sticking to being a platform player, Google is causing considerable collateral damage. Its move into the territory normally occupied by mobile operators, OEMs and small, medium and large developers is turning the marketplace against itself. The honeymoon is over and the do-no-evil days have ended. Google has declared any monetizable pocket in tech a target, including the key franchises of Apple, Microsoft, the mobile operators and now also mobile application developers. The problem with Google’s approach is, the value is not in horizontal services, but in leveraging the democratizing effect of the app stores to use the 100,000+ vertical apps as a way to divide the market into tiny segments and let them flourish and gain traction.

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