Why Is Google Turning Chrome Into An Operating System?

from the slow-down dept

There have been rumors for years that Google might someday release its own operating system, but the announcement that it's turning the Chrome browser into an operating system is an odd duck for a variety of reasons (amusingly, the "Google browser" was also rumored for years before Chrome showed up). Why is it odd?

• Google already has an operating system in Android. While that was initially focused on mobile devices, it's already being expanded to netbooks, so turning that into a more complete operating system seems like the way to go.
• Chrome itself still needs a ton of work. I've tried using it, and it's crazy buggy and so unstable -- I simply gave up and went back to Firefox. Jumping from just browser functionality to a full on OS before the browser code is really stable seems like a big leap.
• The idea of turning a browser into an operating system has been around since the days of Netscape (folks there used to talk about how it was making Windows obsolete), but reality has proven otherwise. In fact, it was partly Netscape's desire to take down Windows by making Netscape more OS-like that caused Netscape to get so bloated as to be nearly useless.
• Why now? Why an OS? Part of the appeal of the growth of the web itself (and Google with it) is the fact that it's made the whole operating system less and less integral to the computing experience. With the move towards more of a "cloud" based world (which Google has been a big part of driving) there just isn't as much value in the operating system as much as in the past. So why jump on that bandwagon now?
• Given all of the above, it just seems like a confused strategy. There will likely be conflicts between Android and Chrome and consumer confusion as well, not to mention worries from folks who just want Chrome to be a simple, competent browser.

Perhaps Google can route around all of these issues, but at a first pass... it just seems like a confusing direction for Google to go in.

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MPAA Matches RIAA In Massive Layoffs

from the couldn't-happen-to-a-nicer-bunch dept

I missed this one when it initially happened, but it looks like the MPAA is following in the footsteps of the RIAA -- who recently laid off a bunch of folks. Apparently the MPAA quickly followed suit and drastically scaled back after the studios cut the MPAA's funding by about 15 to 20%. Apparently some of the entertainment companies are finally realizing that the strategies employed by the RIAA and MPAA (lobbying for favorable laws and suing the crap out of anyone who dares to innovate) aren't actually helping them build a stronger business. Of course, it seems likely that they'll keep making the wrong moves, even at a reduced budget -- but maybe, just maybe, they'll finally start to realize that their recent strategy has been a colossal failure.

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Massive Layoffs Hit The RIAA: Maybe Focus On Building Business Rather Than Suing Customers Next Time?

from the just-a-thought dept

Details have been spilling out over the last few days that the RIAA has been making pretty massive cuts to staff. We already knew that EMI was cutting back on its support of the RIAA/IFPI, and it seems that with the rest of the RIAA's major label supporters also having economic troubles, the writing is on the wall that the RIAA is about to go through a major transformation. I'm sure some will somehow "blame piracy" for this turn of events, but it's hard to see how that's even remotely the issue. The real issue is that the RIAA has basically managed to run one of the dumbest, most self-defeating strategies over the last decade. Rather than helping major record labels adjust to the changing market, it continually, repeatedly and publicly destroyed its own reputation and the reputation of the labels -- each time shrinking their potential market by blaming the very people they should have been working to turn into customers. They may claim that they "had" to take this strategy because it's what the labels wanted (and, indeed, that was Hilary Rosen's excuse), but that's ridiculous. It was evident to pretty much anyone who took the time to understand the issues back in the mid- to late-90s, that the internet represented an opportunity to those who embraced it. The RIAA's decision to fight progress and its own customers at every turn has been nothing short of a complete disaster. That the group is now being gutted is the inevitable result of a poor strategy that could have easily been avoided.

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Warner Music Sues Again!

from the just-can't-stop-it dept

We've discussed in the past Warner Music's penchant for suing pretty much any new web startup that does anything even remotely innovative around music. So, whaddaya know, Warner Music is suing yet again. This time it's German startup Songbeat, who vows to fight the lawsuit, insisting that what it's doing is perfectly legal.

It's fairly amazing that Warner Music -- remember, this was the company that swore it was done fighting its fans -- still thinks that this is a good strategy. Now, before the entertainment industry lawyers who read the site protest "how can you complain about a company defending its rights?" let's think this through a bit. Sure, Warner can defend its rights, but so far, all that's done is pissed off a ton of fans, shut down a bunch of innovative services that fans want to use to support artists, and Warner's sales numbers and stock price reflects this (though, the stock did get a bump yesterday after earnings were less dreadfully awful than expected):

Isn't it, maybe, time to try something different? Perhaps treating fans with respect? Actually joining the conversation? Letting musicians actually post their own videos to YouTube? Basically, isn't it time that Warner Music stopped viewing everything and everyone as a threat, and started actually embracing an opportunity or two? That would be a really amazing day.

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RIAA Caught Lying About Stopping Lawsuits

from the shocking dept

The RIAA and the record labels who make up its main membership keep asking folks like us to "trust them" when they come up with new plans to force people to hand over money. They say that we shouldn't criticize them until the plan is set, but they haven't yet shown the slightest reason to grant them an ounce of trust. Just last week, we suggested that they stop suing people, if they were so intent on turning over a new leaf. And, while they did finally announce plans to abandon mass lawsuits, the fine print is anything but encouraging (and, it's increasingly clear that it was done more to save money than out of any more reasoned strategy).

However, there was a bit of surprising news that came out of the press barrage after the announcement about giving up on the mass lawsuits: the RIAA claimed that it had stopped filing lawsuits months earlier. That certainly didn't fit with the story we had just seen earlier in the week of new lawsuits, and now Ray Beckerman has put together a list of recently filed lawsuits by the RIAA and its major record label members in the last few weeks.

In other words, the RIAA has been caught lying yet again. Shocking. And, yet, they expect us to "trust them" to come up with a better solution -- one negotiated in backrooms behind closed doors without major stakeholders getting to take part? Forgive us for being skeptical that any such deal will be reasonable. What's really disappointing, though, is to see some major tech publications get taken in by this, insisting that somehow the RIAA really has turned over a new leaf. You would think that reporters covering this space wouldn't be so gullible.

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Newspapers Finally Realizing That Online Ads Shouldn't Be Ignored

from the it's-a-little-late-for-this-epiphany dept

With the Christian Science Monitor going online only, many newspapers are again re-evaluating their online strategies. When you listen to newspaper execs, you usually hear the same line over and over again: even though online page views are up and paper sales are down, the amount of ad revenue coming from online is still tiny compared to print. That's definitely true, but a large part of the problem is that many newspapers don't really concentrate on online sales -- especially among the best targets: local businesses. Many small businesses advertise online, but because newspapers don't court them, they go elsewhere, such as directly to Google.

The NY Times is writing about how at least some newspapers are realizing that, rather than focusing their sales efforts almost entirely on print ads, they need to start focusing on selling online ads as well. Amazingly, many of these newspapers have almost all of their sales commissions for print ads. In those cases, is it any wonder that they don't get more online ads? In fact, many ad sales folks simply "throw in" some online ads as a bonus to get companies to sign the dotted line for print ads, which is exactly the wrong incentive needed if you're trying to grow the online ad business.

What's really amazing is that newspapers are just now catching on to this. They're only about five years too late. The local businesses, which would have been interested five years ago, have figured out that there are other options for online advertising from Google to "local" sites like Yelp and CitySearch.

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Five Years Into Suing Fans, RIAA's 'Sue Everyone' Strategy Has Failed, Miserably

from the and-yet-it-continues dept

The EFF has a long and comprehensive look into the RIAA's five year (and running) legal campaign against file sharing. It's a great overview that not only brings you up to speed if you haven't been following the whole thing, but also puts the entire campaign in perspective. The summary? Almost every move the RIAA has made in its legal campaign has backfired.

It started with suing technology providers. All that did was make more people aware of file sharing. When it succeeded in getting Napster shut down, plenty of others showed up that were much more difficult to shut down. So, then, the RIAA shifted to suing individuals accused of unauthorized sharing, claiming that it was an "education campaign" to teach people that unauthorized file sharing was illegal. All that's done is turn many more people against the RIAA, while continuing to educate them that file sharing exists. In fact, many more people engage in file sharing now than five years ago when the campaign started.

So, effectively, the lawsuits haven't worked (the RIAA has not had a full trial turn out in its favor yet). It's turned public opinion massively against the RIAA and its associated record labels. It hasn't done anything to slow down unauthorized file sharing, and may have actually helped promote it. About the only "success" of the strategy is that it's turned into something of a cash generator for the RIAA, by frightening people, with strong legal language around flimsy evidence, into paying "presettlements" to avoid being sued. It's like a protection racket from organized crime. Oh yeah, it's worth noting that the musicians don't actually see any of that money.

So, by now it should be clear that this strategy has absolutely nothing to do with helping the music industry thrive or to actually deal with unauthorized file sharing. From the beginning it's always been a way to squeeze more money out of people through threats and intimidation. While I strongly disagree with the EFF's proposed "solution" to this issue (a compulsory licensing scheme), the review of the history certainly puts the whole campaign in perspective, and makes you wonder why anyone (especially any politician) actually thinks it's about helping musicians.

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iPhone Shows That Cheaper Phones Are Still Important

from the price-is-important dept

The iPhone has received plenty of well-deserved (and plenty of not-so-well-deserved) hype and press over the past year or so, but one of the key points that Apple tried to make when it launched was that a premium phone deserved a premium price -- and people would pay for it, even without a massive subsidy from a mobile operator, as is typical of other phones. And, while there definitely was a huge crush of Apple fans who had to buy the iPhone early, the fact that Steve Jobs quickly lopped $200 off the price, just months after it was introduced, suggested that the number of people willing to pay that kind of premium wasn't as much as expected. In today's keynote, as was widely predicted, Jobs launched the new 3G iPhones with another $200 cut off the price, so the base model with 8gigs is now $199 -- down into the range of your typical subsidized smartphone.

While the iPhone has done plenty to get people to rethink mobile interfaces, it seems clear that Apple may have initially misjudged how people would respond to premium-priced phones. Jobs had promised 10 million iPhones sold in the first 18 months, and has reached about 5 million in the first 12 months (nothing to sneeze at, obviously). However, to get up to that 10 million number, he had to drop the price to be competitive with other phones. It's a smart move (though, it's not clear if the $199 is subsidized or not), given the market conditions, but beyond the lessons that everyone will talk about concerning Steve Jobs' strategy in launching the iPhone, the most interesting of all may be how the initial pricing structure backfired -- but was changed so quickly.

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How Wall Street's Short Term Thinking Can Destroy Tech Businesses

from the gotta-look-to-the-long-term dept

For whatever you think of either Amazon.com or Google, one thing that's worth giving both companies kudos for is their ability to ignore the short term questions raised by Wall Street in favor of much more strategic long term thinking. It's been less clear with Google, who has consistently done well. But Amazon has, for years, faced numerous questions from Wall St. analysts who consistently seem to get upset by the company's willingness to invest in big long-term projects. Other companies, unfortunately, get swayed too easily. For example, last year, Sprint gave in to short-term thinking from investors who got upset that the company was spending so much on its next generation wireless strategy -- despite it being an absolute necessity.

The latest place where that may be happening is with Netflix, which has been investing heavily in its digital download strategy -- causing some Wall Street folks to complain that the company is spending too much, and it won't make sense until the majority of users switch over. However, as Greg Sandoval points out, if Netflix follows this path, it'll be dead. That's because these projects take time. If you wait until the majority of your customers will switch over, they've already switched over... to your competitors who didn't wait around for Wall Street's short-term thinking to catch up.

This same issue comes up all too often, by the way, in discussing the various business models that the entertainment industry can adopt -- with people insisting that the record labels and movie studios should wait until the model is proven and everyone else is doing it. The problem, at that point, is that the laggards have lost all relevance, and their brand and reputation are worthless at that point. Betting on the long-term means not being a follower -- because in waiting for others to create the new market, you'll be left too far behind.

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Advertising Isn't A Mobile Strategy

from the content-comes-first dept

ReadWriteWeb has an article claiming that the way to beat Google is by having a better ad platform (via Matt Asay). It says that "the company that can corner the mobile web ad market is going to be able to go toe-to-toe with Google." This is getting things completely backwards. Google doesn't dominate the search engine market because it has the best advertising platform. It dominates the advertising market because it has the best search platform. Other companies, such as AOL, that have seen themselves as an advertising company first and a content/applications company second have gone nowhere. This is especially true because the best advertising platforms are tightly integrated with their associated applications. One of the reasons Google's search advertising is so lucrative is that Google figured out how to make its ads highly relevant to users' search terms. This had two benefits. It increased click-through rates, obviously, but more importantly, it made the ads more useful -- and therefore less annoying -- to users. The same principle applies to the mobile space. Mobile advertising will only work if companies figure out how to make the overall user experience positive so that the ads don't scare users away. The way to do that is not to focus on building the best possible mobile ad platform, but rather to build the best possible mobile services, and worry about monetizing them after they've built up a significant user base.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Surprise: Hollywood Favors Short-Term Fads to Long-Term Strategy

from the in-the-long-term,-the-MPAA-is-dead... dept

It's no secret that the entertainment industry has some execs who are positively proud of the fact that they'll sacrifice long-term strategy for short-term gains, but you'd hope that there was someone, somewhere with a powerful position in the industry who would point out why that's not a particularly intelligent strategy. Take, for example, the MPAA's position on net neutrality. Last summer, the MPAA sent a letter to the FCC opposing net neutrality on the grounds that it would hinder its anti-piracy efforts. It would appear that the MPAA is getting more vocal about this, as MPAA boss Dan Glickman repeated the charges yet again that net neutrality would harm its business.

Of course, the only way that's actually true is if the MPAA views the internet as mostly being about piracy, rather than a future distribution channel. Because, as Jon Healy points out in the link above, in a non-neutral internet, where ISPs get to charge extra to heavy bandwidth users, the movie studios are suddenly going to find that it's a lot more expensive to distribute movies (extremely high bandwidth items) online, since that will be exactly what the tollbooths are set up for. So, in coming out against net neutrality, the MPAA is basically saying that it wants distribution costs online to be higher. Perhaps it's no surprise. The industry really doesn't want to embrace the online world, as is quite evident from its repeated half-assed efforts at creating online movie download services. Perhaps Glickman and the studio bosses really believe that they can go back to a world where only the studios control the distribution mechanisms, even if they're a lot more expensive, cumbersome and inefficient. It does seem odd, though, that any business would prefer that its distribution systems be more expensive and less useful -- but that just goes to show you the level of strategic thinking that sometimes goes on in Hollywood.

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If Facebook's Platform Is A Strategic Mistake, It's In Facing The Wrong Direction

from the not-open-enough dept

VentureBeat is running an opinion piece suggesting that Facebook's platform strategy is a strategic mistake which got me thinking. I disagree with the author of that piece, David Gal, who claims that the platform strategy is a mistake because it "squanders" rather than helps the core asset of Facebook, which is the community of people. That's difficult to believe, as the platform itself is what's created numerous applications within Facebook that have made the network itself more valuable to those members because it actually gives them something to do with all of their friends, rather than just connect to them. So it's difficult to see how Gal reaches his conclusion. His suggestion that there are just too many applications being developed doesn't really matter, as it's the top applications that are the ones that people find useful, and which they use to add value to the overall network itself.

However, the article did get me thinking about whether or not Facebook has made a strategic mistake with its platform strategy. When the Facebook platform strategy was first announced, it made a lot of sense. We've been waiting and waiting and waiting for someone to build out a true "web platform" (and remain amazed that Google has repeatedly ignored the opportunity). However, while the Facebook platform strategy may have made sense initially, it's way too inwardly focused. That is, it's been entirely focused on having people build applications within Facebook to get access to its users. What would have been a lot more interesting and a lot more powerful is the ability to build applications for outside of Facebook that would leverage the power of the people inside Facebook. While I'm sure the short-term view is that Facebook needs to keep people locked in, the long-term benefit needs to be making something that's really useful -- and so far, it's not clear the Facebook Platform has really reached that stage.

As such, perhaps it's not too surprising that many of the more successful Facebook apps to date have really just been focused on games and music, rather than anything all that productive. Turning the community inside out, so that it can take part in activities outside of just the Facebook arena could be a lot more interesting. Right now, Facebook's Platform seems designed to keep people in Facebook so that advertisers get value. But the real opportunity is in using the people in the community to do something of value and to provide value back to those users as well. Hopefully, that will be the next stage of growth that we see out of the Facebook platform, or expect to see people start to drift elsewhere.

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Time Warner Takes Steps To Finally Spin Off AOL

from the a-bit-late dept

As part of Time Warner's earnings conference call, the company noted that it will be splitting AOL into two parts: cutting the rapidly shrinking access subscriber business from the content/advertising business. Many folks are assuming this is in preparation to finally sell AOL off. Of course, like so much that AOL/Time Warner has done over the years, this is too little too late. Remember the happy days in the 90's when AOL would come out with a press release announcing every million new subscribers? Funny that they don't do that for every million lost subscribers... However, it's been those subscribers that have hindered AOL's ability to adjust. For years, they were afraid to do too much with free content to lose that subscription base, even as that subscription base was figuring out that they could already go elsewhere and get the same content for free (and buy access for much less). So, when the company finally adopted a free model, it was too late to simply throw the doors open. People just weren't that interested. The same is true now. Time Warner had a chance to salvage AOL years back, if they had aggressively tied it to a broadband strategy rather than competing with itself and giving lip service to a more complete strategy which never actually seemed to happen. Finally separating out the dwindling access business is hardly going to catapult the rest of the business forward, as most people have simply moved on to other sources. While the sheer size of AOL's traffic can hold it up for a while (and may make it an attractive buyout for someone looking only to buy some traffic), it's lack of innovation and growth have pretty much doomed it to also-ran status.

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Report Suggests RIAA's Lawsuit-Happy Strategy Still Not Working

from the creativity-needed dept

Marginal Revolution links to a new paper by economist Stan Liebowitz on the economic effects of file sharing on the recording industry. It's a response to an earlier paper that argued peer-to-peer file sharing has had little impact on CD sales. Leibowitz digs into the arguments and finds a number of problems. For example, one of the arguments in the original paper depends on the assumption that college kids use peer-to-peer networks less during the summer than during the school year. Unfortunately, Liebowitz presents data suggesting that's not true: in two of the three years they studied, file-sharing activity was actually slightly higher in the summer than the rest of the year. Liebowitz also faults the authors for failing to release their full datasets; he says he was unable to replicate several of their results using publicly available data. In the end, Liebowitz makes a pretty convincing case that file-sharing technologies are hurting the recording industry: industry revenues in the United States fell by a third from 1999 to 2005. Of course, Liebowitz's data also suggests that the RIAA's current strategy of suing everyone in sight—which they launched in 2003—isn't working so well either: revenues continued to fall between 2003 and 2005. They've tried suing technologists and suing customers, and neither has saved them. Maybe it's time they tried some more creative approaches that don't involve hiring lots of lawyers.

It's also worth noting that neither study looks at trends in the overall music industry, which includes not just CD sales but concerts, T-shirt sales, sponsorship contracts, musical instruments, music lessons, and so forth. These are all important part of the music industry, and some of them have been doing quite well lately. As people use peer-to-peer networks to discover more music they love, they're likely to be inspired to spend more money on these other music-related products and services. As long as plenty of good music is being created and listened to, then the copyright system is working the way it's supposed to, even if the people who ship little plastic discs around the country aren't making as much money as they used to.

Timothy Lee is an expert at the Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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