Don't Copy Google's Business Model
Time's recent feature on the inner workings of Google paints a picture of a quirky company overseen by brilliant people. It's a fascinating piece that's well worth the read.But there's danger lurking between the lines of the article. Google's business model is intoxicating, unusual, and ridiculously inimitable. The company caught lighting in a bottle with its search engine and had the intelligence to monetize its search results with AdSense/AdWords. Now, the AdSense/AdWords rollout could have been part of Google's strategy from Day 1 (if it was, the Google folks are even smarter than I thought), but the Time article and every Google-centric piece I've ever read suggest that the confluence of search-AdSense-AdWords was a simple case of business serendipity.
You don't build a business on serendipity.
Google can get away with a shotgun approach to new features and services because they've got the cash and the intellectual capital. They can release amazing products for free because their bottom line is solid (case in point: the free Google Analytics service is built upon a package that used to cost more than $400/month). To Google, free = brand building. To everyone else, free = a bad idea.
Now, I'm not saying start-ups and other companies should avoid the "give it to 'em for free" model (lord knows I love me some free software). Rather, companies should use giveaways as part of a concerted effort toward profitability. If free services open the door to a new revenue stream (sponsorship, advertising, upsells, whatever), then they're worth it. But if a company doesn't have an end-game, the free model will never lead to profits. You can't sit around and hope for an AdWords epiphany. -- Mac Slocum
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