Google Kills an Industry
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KTK
Wow.
Google threw a new product called Goog-411 into Google Labs today - a free telephone based information service that could replace toll 411 calls. About 2.6 billion 411 calls are made in the U.S. each year, and it is a $7 billion/year market.
Goog-411 can be accessed by dialing 1-800-GOOG-411. The product is completely automated and there is no way to talk to a human for additional or clarifying information. You tell it your city and state, and then ask for a specific business or business category. In my tests the product was excellent. Although the voice recognition was only working at about 70% efficiency, I just said “back” and retried when it didn’t understand what I said. Results are spoken back or text messaged back to you, and you are automatically put through to the phone number requested.
Well, that’s it for 411. $7B of annual revenue simply . . . vanished. Of course, this doesn’t include residential listings, apparently because Google’s already got the business data from its other applications, and can keep it updated the same way - so maybe the whole industry won’t go . . . yet. But even so, it’s a huge hit to an industry whose business model was based on keeping information secret and charging for it.
I don’t know if you can make more money by secreting information or by broadcasting it; I would guess probably the former. But this project is in keeping with Google’s model and ethos - first, by becoming an all-things information provider, Google can produce revenue in ways that don’t necessarily require blocking access to the information they control; second, the idea of going to lengths to share the information they have seems in keeping with the “don’t be evil” mindset of the company. It isn’t evil to charge money for providing telephone listings - nobody requires a company to do so at all, so it can’t be evil to charge for it; but it’s a positive good to do so for free. And between an organization that makes great benefits available as widely as possible for free, and ones that do nothing unless you pay them literally for answering a simple question, the former deserve support and the latter deserve to die.
It’s easy to make too much of “the new economy” (the dot-com bubble proved that), but to at least some degree I see things like Google and the open-source movement as introducing a new kind of capitalism - one that sees profit as a welcome by-product of doing good things for people, and not as an entitlement to be screwed out of customers by any strategem, to their detriment. This form of capitalism often takes profit to be a secondary motivation - the point is to do something valuable in itself, and take what you can get for it, rather than to do whatever will bring the most revenue no matter the consequences to others. As such, it’s naive, and perhaps at an inherent competitive disadvantage against rapacious companies who will use the greater profit margins of a profit-above-all mentality to squeeze less aggressive competitors out of the market. It’s the kind of capitalism practiced by artisans and small landowners or specialty tradespeople - people who do what they do because they choose to, and take the doing of it to be their motivation in and of itself. I don’t know how well that translates to global-level enterprises like Google. (Earlier examples, like the Whole Earth Catalogue, food co-ops, and the like, tended to retain a small-business model, usually within a regional or local market.)
But the examples of Google, the commercial Linux community, even to a minor degree Apple Computer (in its ethos, not its business model), suggest there is a viable alternative, and one that can compete in large-scale markets, capture market share in large industries, and provide employment for people who want fulfilling jobs but aren’t cut out to be organic prune herders or handmade ceramic bong artisans. Sticking it to the Man is a welcome side-benefit. Good luck to them.
