How Apple and Google Dominate

Posted by Umair Haque on March 12, 2008 11:14 AM

Last week, I promised to discuss another source of advantage in decay. We're going to zoom out
instead, in response to a flurry of announcements from Apple, Google, and would-be competitors – to
have a richer discussion in the weeks going forward.

It's funny how flatfooted - how almost inept - everyone else in media, marketing, consumer electronics,
mobile, a long and dangerously growing list of industries, seems compared to Apple and Google.

What gives? Why is that everyone that Google and Apple decide to take to the cleaners, well, gets taken
to the cleaners?

After all, Apple and Google are radically different companies. Who, it appears, have already divided the
next-gen media pie very neatly between them. Google, software. Apple, hardware. Google, search.
Apple, conduit. Google, algorithm. Apple, human. Google, geeky, self-effacing ad-quants. Apple, a
reality distortion field wearing jeans and a turtleneck.

That's a product market level view - the view from the core. When we invert our traditional vision, and
look at them from the edge, Google and Apple are strikingly similar: less like a power couple for whom
opposites attract, and more like long-lost siblings.

Much of their DNA is - at least superficially - different. Jobs runs a totalitarian state with equal amounts
of fear and love. Sergey and Larry tune - not manage - an organization poised forever on the edge of
chaos and anarchy, while Eric Schmidt (who does sit on Apple's board) keeps the gears of the business
grinding away.

But many of the most vital components of their DNA are strikingly similar, and that's where the lines
between them begin to blur.

The ends they're working towards are similar: Goople aspires to - with laserlike intensity - change the
world for the better. And where most of their competitors will sell out everything they believe in for a few
bucks and a latte, Goople is deeply, radically purposive: they won't compromise much, if anything, to
achieve the goal of changing the world for the better. (One can argue that Google's policy of following
local content-filtering policies in China is a notable exception.) You'll never see an ad on Google's
homepage, or a Mac that's not a joy to use, even if Bill Gates, Gordon Gekko, and Lucifer held a fire
sale, and mortgaged the world to Goople.

And that DNA opens new paths to strategy and advantage. Goople finds value chains and industries in
deep strategy decay - where innovation and choice are stale, and consumers are besieged by lameness
- like marketing, consumer electronics, TV, and perhaps the most troubled of all, mobile and music.
Then Goople utterly eviscerates them: it reconstructs radical new ones - where friction has been
vaporized, where complexity and variety explode - and so everyone really is better off. When Steve Jobs
makes the iPhone carrier-neutral, kiss the traditional mobile value chain goodbye.
On the flipside, where would-be competitors release a handful of predictable, often crippled products
and services a few times a year - hi Nokia, bye Yahoo - Goople floods market space with radical new
value propositions, overloading the very circuitry of the industry - still driven by fear of cannibalization -
and so short-circuiting the traditional dynamics of competition.

Think the Macbook Air's a crippled, compromised pile of junk? If the early numbers are anything to go
by, Apple listened hard enough to understand exactly those features road warriors really need and use,
ditched the rest - letting it craft a radical new value proposition, just like that. Funny - that's exactly the
story of Google Search, AdWords, and increasingly, Google ads across media; a story competitors just
can't seem to get right.

Media isn't just "content" and "pipes". Media is the stuff that stitches together the fabric of production
and consumption: it's how producers and consumers interact. So it's likely, that as newspapers, radio
stations, and TV networks did yesterday, whoever holds sway over media tomorrow will enjoy
supernormal profits for decades, and be able to shape and influence the course of the rest of the
economy.

What will that influence look like?

The key components of DNA Google and Apple share let them overthrow yesterday's stale approaches
to strategy and advantage, and pursue entirely new ones with a vengeance. Goople does exactly the
opposite of what orthodox strategy counsels: it makes peace where there was war, conquers through
love instead of hate, listens to instead of shouts at consumers, perhaps most critically, takes huge risks
to make the world better instead of avoiding risk to make it worse.

Goople is rewriting the rules of a very stale game: industrial-era strategy itself, which is really the prime
mover behind the gathering economic storm on the horizon – but that’s another post.

That was a dense post – so let's kick-start some discussion.

Do you see some of the differences between core and edge more clearly? Can you see some of the
similarities between Apple and Google’s DNA? The way the global economy is going, which do you think
makes more sense -- core strategy, or edge strategy? How do you think the rest of the media industry
can respond to Goople?

• Comments (46)
• Join the Discussion

Comments
In my mind, Google and Apple have one thing in common: make super simple products that are a joy to
use. Whatever else they do, they never compromise that quality. Both focus on making the lives of their
users/customers better. As a result, they both have a very loyal customer/user following who just love
their products and evangelize them everywhere. So, the fundamental driver is very similar: great
products that make the user's life better.
I think pretty much everything else is very different. Google is an open company, Apple is closed. Using
Google's products is free, with Apple, you pay for everything. Google uses its free products for inbound
marketing purposes, Apple use classic marketing to position its to-pay-for products.

This is not to say that Google is better than Apple. After all, when you are a device maker, you have a
different cost base to when you are an Internet company. Let's just say that both companies pursue
similar aims with radically different methods and are both very successful at it.

- Posted by Jens
March 12, 2008 13:17
An important seperation is that google tends to be 'online' whereas apple's software tends to be 'offline'.
In this online/offline difference they tend to complete each other rather well. (notice the google maps
usage in the iPhone for example)

I think your main point is that they listen to their users and try to make products that are user-centric in
their respective area of expertise. Aside from that, their common DNA is hard to see, especiallyt in light
of the open/closed dichotomy that Jems mentioned. In fact, Apple makes 'crippled' products all the time.
It is just that they may be the 'right' kind of crippled.

- Posted by Alexandros Marinos

March 12, 2008 14:57
Jens/Alexandros,

I think the similarities b/w GOOG and AAPL are better illustrated by the iPhone than the Air (Umair on
iPhone strategy June 2007, via Bubblegeneration):

"What's Apple's larger strategy behind the iPhone?

1) Pick an industry which sucks (ie, imposes significant nuisance costs/menu costs/externalities on
consumers)
2) Redress the imbalance by making something consumers love
3) ...Which disrupts the long-standing industry equilibrium, and shifts market power
4) Use said market power to redesign (a hyperefficient) value chain

"...Apple can't offer totally open platforms, unlocked phones, etc, etc...yet. No network operator will
consider giving away the channel control which earns them at least marginal returns - it's a classic case
of a strategic trap, because the short term costs of the cannibalization that implies (significantly) exceed
the short term gains.

"But after the iPhone shifts massive market power to Apple, network guys will have little choice but to
play by Apple's rules, to accede to it's newer, better value chain design - because the pool of consumers
Apple offers access to will simply be too large a percentage of the profit pool for decisions not to be
dictated by them.
"It's a brilliant strategy. And it should be a very, very familiar one - it's exactly what Apple's done to the
music industry."

This is much more reminiscent of what GOOG has done to the ad industry and is in the process of doing
to Office users, etc.

Larry, Sergey, Steve J...separated at birth?

- Posted by Ethan Bauley

March 12, 2008 16:56
User-based innovation will never go out of style. Google in creating a search service that people want to
use attached to a powerful business model. Apple in creating simple connected products and services
that just work.

Agree with the previous comments - Apple is a closed system and they regularly make 'closed'
decisions. iTunes has dangerous parallels to AOL in the 90's and could face extinction (see NIN Ghost
launch). I'm not sure I see how Apple is an edge company.

Is Google really about the edge or are they more about being a more fluid intermediary (I'm really not
sure)? Based on my usage of the system as an advertiser, advertisers and content creators have
Google between them in a one-time transaction that is a short term shot in the arm for a price, with no
building of a sustainable network of deep relations.

Good stuff, U.

- Posted by CoryS
March 12, 2008 17:07
eye-yey-eye

Let's all set aside our industrial age paradigm of looking at a product for what it 'is' the moment its
released.

The MacBook Air shares similarities with the iPod. When the iPod came out, it was not the runaway
success it is today. It was ahead of it's time, ahead of the curve, made for what was coming. Same with
MacBook Air.

In 5 years if you're still worried about having a CD Rom on your latest laptop it will be the equivelent of
being worried about having a floppy disk drive today.

Look at the underlining changes and shifts, not at the status quo.

Jason

- Posted by Jason Schultz

March 12, 2008 21:12
I love the comments here. Jason and Jens nail it for me. Ahead of their time, but anticipating consumer
needs.

Example ... everyone complains about the things the Air does not have. [disclaimer, I am a Thinkpad
user]. But I am a no external drive Thinkpad user for years, because I value light weight, and network
connectivity. I also value the speed, simplicity and functionality of Google gmail, docs, and calendar.

There is something in the notion that Google/ Apple focus on future consumer needs. The question of
future needs always lies in whether the assumptions are correct. Both companies choose an iterative
approach, that is not too far ahead of the curve, yet enough to challenge traditonality.

- Posted by Colin
March 13, 2008 01:41
Sir,

Agree with most of the comments above.

I believe the success of Google and Apple has to do with

creating needs instead of merely satisfying explicit needs.

Warm Regards

- Posted by B V Krishnamurthy
March 13, 2008 04:15
Ahead of the curve is a good idea but how do you get there? I think what Google and Apple do really
well is design for themselves and wait for everyone to catch up. Also having simple missions and vision
(organise the worlds information, digital media revolution) makes it easy for every one in these
companies to paddle in the same direction.

- Posted by Farhan Lalji

March 13, 2008 06:24
media is the filter between self and reality, the more transparent the media, the more reality

and since self = reality, im-mediate is best

what is good design? that which most closely allows self to arrive at reality, i.e, doesn't get in the way of
immediacy

apple and google are great because their products are relatively transparent, they don't get in the way of
me being me

which is why we love them. counter-examples are too numerous to mention

- Posted by gregory
March 13, 2008 12:50
media is the filter between self and reality, the more transparent the media, the more reality

and since self = reality, im-mediate is best

what is good design? that which most closely allows self to arrive at reality, i.e, doesn't get in the way of
immediacy

apple and google are great because their products are relatively transparent, they don't get in the way of
me being me

which is why we love them. counter-examples are too numerous to mention

- Posted by gregory
March 13, 2008 12:52
I think Umair is groking "User-focused" a little differently.

GOOG/AAPL think about this *fundamentally* differently from industrial product companies, who view
"user focus" as a tactic to make [marginally] better products, increase market share, demand higher
prices, etc.

These outcomes are an [intended] side effect of GOOG/AAPL's strategy, which is to *service the needs
of a community* (where that community is mobile phone users, or RSS users, or online search query-
ers).

The difference is subtle but really powerful.

Umair, is this what you're getting at?

- Posted by Ethan Bauley

March 13, 2008 13:29
Good post Umair.

Sitting on the edge of a cloud, with air on my lap, Googling delight.

Now, let's fix the healthcare system and have a party.

- Posted by Crawford
March 13, 2008 14:31
And what about Nintendo? I don't know how that organization is run specifically (chaos vs. order), but
they seem to be pushing boundaries and actively redesigning value chains as well.

I don't know if any of you have read this already, but check out this link:

http://www.engadget.com/tag/wii%20channel/
Watch the video...It's jaw-droppingly cool imo. Trying comparing it with the interface and features from
your own cable box ;) This is an object lesson in disruption...you can feel it lurking silently in the night
waiting to strike!

- Posted by Zack
March 13, 2008 14:51
Enjoyed the article, but why is it sometimes spelled Goople (with a P)? Was that intentional?

- Posted by Jason Luna

March 13, 2008 15:27
this post seems funnily relevant to why google and apple are 'different'... at least it drove the point home
for me:

http://stuffthathappens.com/blog/2008/03/05/simplicity/

- Posted by Alexandros Marinos

March 13, 2008 15:37
1. Google and Apple are creators. Everyone else is an imitator, following the trend that the creators
fashion. There are very few creators. Everyone else adapts, and rarely adapts as well as the original
creators. If they do, they become the next generation Google/Apple.

2. As I understand your edge strategy analogy, I'd say that what is distinctive about Google and Apple,
that makes what they do an edgy sort of enterprise, is that they are not following someone's lead. They
have ventured out to the edge or periphery of what is known, and are creating products that become the
standard by which others must attempt to meet. In this sense, from one generation to the next, the edge
becomes the core.

3. If I understand this correctly, and Anderson's The Long Tail has any relevance here, there are markets
that are untapped because old core businesses are unaware that they exist. The future belongs to those
who are willing to live out at the periphery creating new products and services.

My question is where do people learn how to do this?

- Posted by Ed Brenegar
March 13, 2008 16:36
Geez, I just figured out that "Goople" = Google + Apple.

It looks like some weird typo...watch out, ya'll.

And here I was thinking that Umair had talked too much about Goople and not enough Apple ;-)

- Posted by Ethan Bauley

March 13, 2008 18:39
Hi Umair,
I agree about the arguments about Google made here but saying that they also match with Apple
hmmm ! I am not sure.

As once before I would venture to say that either what you are saying is wrong or maybe I have not
understood the point well enough as this post is very sketchy.

Btw every time I read a post of yours this is what rings in my head "Umair's posts are like 'mini skirts' -
What they reveal is tantalizing, but what they hide is crucial." - adapted from a very popular
sidduism(http://en.wikiquote.org/wiki/Navjot_Singh_Sidhu) :D

But anyway getting back to the topic.Building products by acing across all the dimension of functionality,
form/aesthetics & emotional appeal apple has many times established its supremacy but you have
yourself have made arguments ( and have taken a lot of heat for it) in bubblegen circa 2004 - 2006-7
that apple does not understand platform strategy at all

Indirect network effects, establishing platform value chain and acting a platform coordinator is alien to
Apple/Jobs crew.

If I understand the thesis of the edge competencies (essential strand of new DNA) right then they rest
on the foundation of network economics and strategy ( next generation of it rather than the old version
of Val Harian).

One thing I agree is that Jobs always tries to redefine value chain by creating huge value for the
consumers but it has not been so far in tune with network econ so I am not sure how much what is
argued in this post is correct.

- Posted by Rajan
March 13, 2008 22:56
What happened to the comment I submitted about 10 hours ago? Was it never approved or did it just
disappear? It was a witty and insightful comment about Nintendo which included a link. If I violated
some TOS could you inform me so I don't make the same error in future posts?

- Posted by Zack
March 14, 2008 00:08
Umair, fab topic some great points. it's dangerous to apply their innovative archetypes on all different
types of organisations. I think it is important to make this point clear. Not everyone has to have 'goople
dna' to be disruptive (it would help), but what if you dont have a visionary-leader-dna (apple) or a P2P
market place of ideas for innovation dna (google)?
imo it's very dangerous to impose it if you dont.

Is a more executive led approach (but with added 'edge') like P&G and goldman sachs not relevant
anymore?

Would love to know people's thoughts...

- Posted by ray
March 14, 2008 10:13
Hey Ray,

Can you provide some more concrete examples of firms who you think it would be dangerous to
implement "disruptive DNA"?

I think one of your comments is a little circular ("not everyone has to have Google DNA to be
disruptive"), because the DNA of Google is: be disruptive. At the same time, GOOG is only disruptive
*relative* to the stale strategies of its competitors; if these types of edge strategies ("user focus,"
emphasis on co-creation of value instead of extraction of value, servicing markets, networks,
communities), become more widespread, there will be a whole new level of competion: competing for
openness, "good", etc.

There was a comment on an earlier post asking Umair what he thought the dynamics of such a
competitive landscape would actually look like and I'm curious to know as well.

It's really a wide-open field now, because almost every single industry across all economies is
predicated on the "shell-game" of value creation as opposed to the "sustainable edge."

(Hence the potential for "macropocalypse").

Finally, it seems that, for firms that depend on extracting value from customers (again, instead of co-
creating), really "owning it" vis-a-vis disruptive DNA is almost by definition going to hurt the bottom line
in the near term (hence it's "very dangerous").

Of course, the alternative is likely to face diminishing returns as some new entrant moves into the space
and "eviscerates" the previous value chain.

Just some thoughts, for what they're worth. Sorry for all the "quotes". Trying to put the jargon into relief.
Maybe all those phrases should start being capitalized, like in 19th century philosophy ("It's important to
note that on the Edge, competitors are driven to compete for Good and Openness"). lulz

- Posted by Ethan Bauley

March 14, 2008 15:01
The thing Apple and Google have in common is *minimal interface*. And in a way it makes sense that in
a connected world where you have already things to do everything it is not more that important that a
thing will let you do something - but rather if it will let you do it easily and in any context.
- Posted by Zbigniew Lukasiak
March 14, 2008 18:12
Differentiating Apple and Google from "a product market level view" (core/traditional) and then
"inverting" that to identify their 'secret-sauce' as being related to their 'edge-ness' is drawing a long bow I
reckon.

The absence of ads on Google's main search page, is scant recompense for its bombardment of ads
across the rest of the web, and the fact that they achieve their current hegemony by virtue of a compact
between advertisers and publishers (both non-edge) which in relation to the (lauded) Google Search
page, harvests the interest-data freely given as search queries by ordinary users (who are more
genuinely at the edge).

To say so emphatically that Google "aspires to - with laserlike intensity - to change the world for the
better" and qualify this only by reference to its acquiescence regarding "local content-filtering policies in
China", ignores Google's shaming as an "endemic threat to privacy" by Privacy International, (the worst
offender from a sample of 23 major Web companies including Microsoft and AOL), that Google is in fact
driven by its >98% revenue dependence on Advertising (monetizing our attention-data on its publisher
partner's sites) and to say nothing of how SEO continues to fundamentally compromise the authenticity
of Google's search ranking system.

The most obvious parallels with Apple in my view are in the way that both companies have excelled at
locking up '2-sided-markets' almost to perfection. Apple with its synergy with hardware, software and
web-services delivery with iPod/iTunes being its beach-head triumph (with more to come). For Google it
has been the '2-sided-market' of Adsense for web-publishers, on one side and Adwords for web-
advertisers on the other. That was a 'lay down mazaire' and the rest of the industry can but look on and
covet Google's ubiquity and apparent invincibility. ~ But, let's reflect on where the consumers (edge-
dwellers) are in the Google equation? i.e. disenfranchised, putting up with SEO-infected search results
and simply being bombarded with ads. (even inside Gmail, perhaps the creepiest manifestation of
Google's key-word matching of all)

Apple is pretty cool; but I don't think you can say that Google is "deeply, radically purposive... about
changing the world for the better".

- Posted by Simon Edhouse

March 16, 2008 11:07
Hi Ethan, thks for your question. i think i know where you're coming from. On closer review of my
comments - i agree with you. My point hinged on industry characteristics - some industries would benefit
far more from touching digital networks than others (at the moment). Touching such digital networks
usually results in business logic changes **read as business models**, but sometimes this logic gets
congested and needs time to play out and cause disruption.

A quickie comment in reference to google's mantra (not entering a new market unless it can disrupt). At
the moment they have too many irons in the fire imo. I feel 2008/2009 might be different for them.
There;s only so much disruption that you can do (you can only change the world a little at a time). I hope
i'm wrong because what they're trying to do is very admirable (and 'good'). If i'm right in 2008 - is having
disruption as a dominant strategy right? - esp when we have yet to witness google go through a full
business cycle...based on this strategy. If so,. will their shareholders rein in Larry and Sergei's race to
change the World??? Lets wait and see...

- Posted by ray
March 16, 2008 20:26
Simon -

Re: "The absence of ads on Google's main search page, is scant recompense for its bombardment of
ads across the rest of the web"

What you are leaving out here is that this bombardment of ads is perpetuated by publishers, *not
Google*. (i.e. the publisher decides how many ads they actually want to run)

More importantly, Google also consistently intervenes in the AdSense market on behalf of average
Internet users (NOT publishers or advertisers...thereby improving the overall quality of the market):

http://adwords.blogspot.com/2008/03/landing-page-load-time-will-soon-be.html

http://blog.domaintools.com/2008/01/google-to-kill-domain-tasting/

I think these would be prime examples of the "do good" DNA that is necessary to sustain and grow
markets, networks, and communities.

Some food for thought...

Ray - I hear you. For the last few months I have been trying to think about the application of "edge"
strategies (digital networks, markets, etc) outside more obvious industries (i.e. advertising, music, etc)

- Posted by Ethan Bauley

March 17, 2008 15:37
Well, i think there is one big difference between Apple and Google. Apple prefers closed networks, ie it
wants people to just buy Apple sponsored applications. Google on the other hand, prefers open
networks..ie enable everyone with a software tool to use, enhance, exploit whatever they put out for the
common good. This may be a bit over generous for Google, but it is the big distinction between the two
companies. Which is why Google will have a longer lifespan than Apple on the global internet.

- Posted by izaz haque

March 18, 2008 21:13
Izaz, (no relation to Umair, I presume) Your analysis is seriously wanting. "Apple sponsored
applications" - Is that what Apple produces? Applications? Nope... Apple is a consumer electronics
company and quite diversified too. The 2nd largest music retailer in the US behind Walmart (according
to the March issue of Fortune magazine) Hardware has been their backbone, but their sustainable
competitive advantage has been in the tight control of the synergy between their OS and the various
consumer devices they obsessively finesse. (Apple "preferring closed networks", its not clear what you
mean by that)

Google "prefers open networks"... yeh right, like the web. But is the duopolistic Adsense/Adwords
configuration an open-network? No. Google is 'open' for business... Its 'open' to getting more market
share, but its a misnomer to say that Google prefers "open" in the way that "open" has now come to
mean 'less controlled', 'more egalitarian'. Google's recent involvement in bidding up the price that
Verizon paid for its US Wireless License forced Verizon to make that network more 'open', apparently...
but only to the extent that Google would not be locked out of it.

As Eric Auchard writes in his March 20th Reuters article: 'Google's wireless-auction loss called
possible win' ~ "Google believes making the Internet easier to use for billions of mobile phone users
will translate into increased demand for its Web search and advertising services."

- Posted by Simon Edhouse

March 21, 2008 10:05
Ethan, you say: "this bombardment of ads is perpetuated by publishers" (to Google's Board's and
shareholder's delight I'm sure) and (Google is an example of) the "do good" DNA that is necessary to
sustain and grow markets, networks, and communities.

I really don't buy this 'Google has inherently benevolent DNA that is not self-seeking' line... Objectivity
seems to have gone out the window. - Google monetizes the search queries given freely by ordinary
users, has driven publisher participation in advertising by an order of magnitude but doesn't disclose its
revenue split with publishers, is an "endemic threat to privacy", and its revenue represents around 80%
of total global ad-revenue growth. (where is the community you are referring to?)

What's behind Google's power? To quote Adam Marsh, from his "Interactive Marketing Primer"

...Google is both a publisher and an ad network. One reason for Google’s success as an ad network is
that every advertiser customer as a publisher automatically becomes an advertiser customer as an ad
network. This neatly solves the problem all “two-sided markets” have, which is how to prime one side of
the market before the other exists.

- Posted by Simon Edhouse

March 21, 2008 10:55
Apple, Google and Adobe all focus on the user experience. Not just user interfaces (which most
companies obfuscate or bloat over time). But the user's desires and expected behavior of the
product/service.

The results are typically:

- Simple and non-obfuscated
- Obvious to use - consistent with what you wish it would do
- Orthogonal - anything you should be able to do with the object, you can do
and so on.
For example, in Adobe Flex 3 you can switch from tabbed panes to accordion pains by just changing the
name. They should be orthogonal and they are. Good luck doing that with Swing.

Rich

- Posted by Rich Rein

March 24, 2008 12:21
One other thought - Apple/Google are in a unique position because both their products/services "own"
the interface to the consumer. People don't really care which phone service or ISP is powering the
product/service, as long as it works. As we have seen these types of companies are largely
undifferentiated and have come to compete on price. If they are differentiated, its because of the product
or service sitting at the very end of the product, the bit closest to the consumer. This is where consumer
loyalty builds also.

Why can't other companies get it right?

- Posted by Julia
March 24, 2008 12:30
I believe very few companies have the genetic coding as perfect. Primarily in the service Industry. Some
days ago I attended a corporate training conducted by SCULPT.roi, Inc at hotel Allerton crowne Plaza,
chicago. It was a masterpiece. It had the hardware of apple and software of google. The trainer was an
Indian. But amazing. I believe the Core Strategy thing is spreading off to other sectors as well. Keep up
the good work apple and google.

- Posted by harry
March 24, 2008 12:34
Both Apple and Google are clearly on a roll. But we have to remember other companies that "out-
innovated" their competitors at various points in time (Compaq, Tandem, Sun, Motorola) and did not
necessarily reach these pinnacles. My experience tells me that both companies have tremendous
growth opportunities ahead of them, and their biggest strength is their ability to "adapt" to new markets.
Before we try to emulate everything they are doing, however, I think its important to realize that enduring
organizations have to manage through many product and technology evolutions. Apple has been able to
do this. Google has not yet been tested.

- Posted by Josh
March 24, 2008 12:46
Perhaps the similarity lies in the way both companies succeeded in capturing enthusiastic consumers
who happily viral marketed. Google for example was actually promoted in the UK by a BBC Radio 2 disc
jockey.
Why would people viral market such products? Because of ease of use, innovation and reliability.
Simple concepts one would of thought but actually a serious threat to most organisations where
accountants are prized above creative thinkers.
- Posted by Kevin Chamberlain
March 24, 2008 15:36
Simon (re: "do good DNA")

I think I see where we are missing here.

To me, a first and practical and fundamental point of the "good DNA" construct is really: "do what is
good for the LONG TERM bottom line instead of short term cash flow."

In practice, following this [rather obvious but often ignored] principal often results with Google "siding"
with users instead of advertisers or publishers (see the links in my first comment to you). Hence, it's
"good"

Also think in terms of competition; by being marginally more "good" (customer/user-centric) than
Microsoft, Apple AND Google are creating huge brand and usability gaps that will continue to
widen...UNTIL some more competitors come out of the woodwork and compete for more "good" or
"openness."

The only way to compete with Apple/Google that I can see is by being "more good"; e.g. transparent
about ad rev share rates, or, in the case of Apple, building products with equal or superior design
qualities AND more open interoperability.

- Posted by Ethan Bauley

March 24, 2008 18:14
Julia - Good points. Owning the interface is truly an advantage, and that incidentally is of course why
Google doesn't need to (externally) Advertise, its branding is everywhere anyway. (actually to contend
that they don't advertise is definitely to define 'advertising' too narrowly)

Some people call Google a "one trick pony" because of its dependence on advertising revenue. If it
wasn't for that ad-revenue, Google would be largely ignored and its brand recognition would be almost
zero. ~ Apple, however, is more complex and I think it really has earned its current market power and
brand recognition. Apple was there at the beginning of the PC revolution, and although they made
mistakes, they have bounced back in a phoenix-like transformation. ~ Both companies do have some
common themes however, that is true.

Ethan... yeh, you're right to draw attention to the 'shades-of-grey' analysis, re 'goodness' rather than
getting caught up in a polemic that identifies these attributes in black and white terms. ~ I think I was
moving in that direction, so thank you for steering us back onto common ground.

However, if we go back to Umair's opinion-piece, and his contention that Google is "deeply, radically
purposive... about changing the world for the better". I think it would have been wise to qualify those
apparently glowing endorsements with the observation that this is ultimately all about 'competitive
advantage'. i.e. it makes commercial sense to make people like you. ~ So maybe it might be more true
to say that: Google is "deeply, radically purposive... about changing Google for the better".
- Posted by Simon Edhouse
March 24, 2008 20:32
Yeah.. Its really true that both Google & Apple (Goople) went overboard into the customers inner desires
to find what will really put across a smile on their face. Some of the things a customer asks for may
seem absurd to a technocrat but this small or absurd thing is what creates the desire for that object. As
is the case of Goople. If some other company takes care of this then for sure they will grow like the fast
track Goople growth.
Bundled with all this recipe a good quality is the best loved food.
Good Luck to the growing companies to learn from Goople.

- Posted by krish
March 25, 2008 01:25
It sounds as though Umair is playing on words here. Goople's core strategy or purpose, is radical
innovation or change. Whether that be product, user-led, consumer-driven, or simply changing the
world.

Many business tout this as their strategy, but what they're really doing is simply incremental "tweaking".
In acual fact, they are actually standing still, or falling behind.

Radical change takes a lot of bravery, and a very different, challenging, future mindset and organisation.
Not many companies or leaders truly have this for a couple of reasons, such as too much comfort in the
familiar, and it being diffcult to achieve what the mind cannot conceive. And there's there's stock mkt
pressures yada yada yada etc etc....

As for "edge strategy", this really just sounds like the organisational culture or leadership style. eg. how
does the company operate to best achieve its core strategy. Many, many companies have proven that
there are different ways to skin a cat, and be successful. However, I would suggest that there are key
elements of Google and Apple's culture (or edge strategy) that support their core strategy, which are
probably the same. These will be around taking risks, fear of failure (lack of), where and how ideas
come from and their proliferation (generation of many).

So, in summary - i think this may be wordplay, but there are critical elements of edge strategy that need
to support the core purpose for long-term success. The other components of edge are down to
leadership style.

On the second point, I think Apple have the music media content market well and truly sewn up. I have
started referring to them as the Microsoft of the music world. Their only competition is possibly Sony.
Being a technophobe, I'm not sure how readily their competencies will translate into, say, film content.

The rest of the media industry need to find "their thing". Social networking is blowing up (and blowing
industries apart, ergo music/file sharing) but companies seem unsure how to fully exploit it.

I'm rambling, so it must be time to go...

- Posted by Sheryl Miller
March 25, 2008 09:22
Simply put.....They're both creators...in their own right.
They not only re-create the world...They WOW !!!! it again and againmission

- Posted by epoet
March 25, 2008 16:11
How Apple and Google Dominate
I see no comparison between the inner working of the very old and the new that has come out with the
search engine. Apple is a hardware, was for the schools, Google is for all. I like both. If both make
profits and I get a little out of this I am not complaining. I need not.
I thank you
Firozali A. Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa

- Posted by Firozali A. Mulla MBA PhD

March 26, 2008 09:15
En el caso de Apple es clara la estrategia utilizada: Inversión en investigación y desarrollo de nuevos
productos. Lo interesante del caso es que esta compañía está enfocada a desarrollar productos de los
que conocemos como de la "siguiente generación", esto les ha permitido "violentar el mercado" en
relación al precio que estaría dispuesto a pagar el cliente por un determinado producto.

El ser punta de lanza en la industria de la tecnología te permite cobrar la "utilidad por adelantado",
dejando a las demás compañías replegadas a simplemente seguir un paso atrás a estos líderes.

En cuento a Google y la relación que encuentro con Apple es que Google es una empresa que se ha
enfocado también a productos de alta calidad, en este caso es el software, pero estamos hablando de
compañías que ofrecen los mejores productos del mercado y los clientes aprecian y prefieren estos
productos (por tal motivo están dispuestos a pagar precios altos).

En cuanto a la forma de dirigir las compañías Jobs dirige una compañía con un estilo más del tipo
militarizado, donde los premios y castigos son igualmente premiados o castigados. En el caso de
Sergey y Larry dirigen Google con un estilo con un enfoque más democrático.

Lo interesante de la comparación y lo que ofrece la radiografía del DNA ente las compañías es que
tanto Apple como Google son empresas creadoras de mercado, donde los riesgos son mayores pero
también las ganancias.

- Posted by Eliseo Celaya

March 27, 2008 00:09
I believe that the DNA that Apple and Google both share is relatively simple. It's not about a focus on
innovation, software or identifying markets with "bad strategies." At it's absolute core, these two
companies are intensely focused on creating the absolutely best products for their customers.

Apple and Google don't care what the market has done or what the market thinks it wants. Steve Jobs in
interviews has said on record that they conduct no market research. For both companies, their greatest
success has been ignoring the immediate stated needs of customers and giving customers an
experience that wasn't built by committees.

Google's approach to search and email are good examples of products that were created while ignored
the norm and market standards which blew past the competitive market. Apple did the same thing with
its approach to the iPod, iPhone and MacBook Air.

The strategy for both firms is to create great products and to have the management backbone to ignore
and brushoff negative criticism against shortcomings. A big part of this backbone that that is shared is
the relentless pursuit of product improvement. It's what keeps these companies on top when dozens of
other companies sit on the sidelines to enjoy their momentary success. Note: Motorola, AltaVista,
Yahoo, Microsoft, Palm, Newspapers, Dell.

- Posted by Johnny Won

March 27, 2008 10:15
Sorry to be the 'fly in the ointment' here, but...

Umair, in a recent Bubblegeneration post 'Companies Are Not Pimps' you wrote:

When you try and "monetize your users", you accept the almost obscene assumption that people are
meant to be pimped out, sold to the highest bidder, resources to be slashed, burned, and exploited.

But that's not how the edgeconomy works. Businesses need what connected consumers have to give
more than connected consumers need what businesses have to sell.

Google 'monetizes' search queries... It 'monetizes' its users. User's don't go to Google to see ads, they
go to find websites. ~ What's the difference between what Google does and what they are trying to
teach those MBA's? Is it just that Google is soooooo big, or 'has already made it', that different
standards of judgement apply?

- Posted by Simon Edhouse

March 27, 2008 22:14
Simon,

re: "Google monetizes its users"

Search "chainsaw" on Google.

Nuff said, i.e. many of the ads are more useful than the PageRank results, and GOOG presents both
sides (commercial and algorithmical) for the user's benefit.

All the while, making billions.

That, as the kids say, is "baller".

- Posted by Ethan Bauley

March 31, 2008 19:52
Ethan, OK...

Man chops off head with chainsaw

"A man cut off his own head with a chainsaw after stabbing his 70-year-old father to death in their
apartment"

Thank God for the Google Algorithm!

You say: "GOOG presents both sides (commercial and algorithmical) for the user's benefit."

Well... maybe actually, they are "pimping" their user's for Google's own benefit... and the obvious 'click-
through collusion' that occurs between Goog's advertising affiliates is presenting a false market
economy for users. 'Merit' and 'Value' don't buy position here, the "Billions" paid to Google, and
(partially) shared with its advertising affiliates do.

To quote Om Malik: "Search Engines have to make it clear that they don't store any data whatsoever.
The only way they can do that is if search is their only business"

- Posted by Simon Edhouse

April 1, 2008 02:12
Simon,

I'm not sure if I understand your points in the above comment and I don't know where the "chainsaw
suicide" thing came from (wasn't in my GOOG serp)...

My feeling is that it's more instructive to look at this idea of "DNA" relative to industrial-era strategies and
customer/stakeholder relationships, instead of some "blue sky" idea of a benevolent corporation.

Best,

Ethan

- Posted by Ethan Bauley

April 1, 2008 15:57
Ethan,
I didn't raise the 'Good vs Evil'... issue, or the 'Companies Are Not Pimps'... issue, or the 'Monetizing
your Users'... issue. These issues were raised by the author of this blog. ~ I am merely saying: "Isn't
Google doing the same thing?"