The unintended consequences of Google’s “Don’t Be Evil” – Is it actually evil?

Let me begin by saying I believe Google is striving to fulfill their corporate motto “Don’t Be Evil.” Google is constantly democratizing web applications bringing free technology to anyone who can fill out a sign-up form. Businesses, schools, organizations, and individuals are using Google web applications at little to no cost. This includes gmail, analytics, webmaster tools, Google Calendar, Trends, and a myriad of other extremely useful tools. It’s great that these applications are free, but what’s happening to all the other companies that can’t afford to give their products away at zero cost?

I started to think about this after scouring the web on behalf of a Client. I recently discovered that English to Latin Translation APIs do not exist. I checked Google, Systran, and Wardlingo and searched numerous blog posts related to the subject. Naturally me being curious like a cat, “I have a couple friends that call me whiskers” Will Ferrell-Harey Carey, I asked WHY! Why would anyone spend countless hours developing a translation API when Google either offers it for free or will in future!

This may open a can of worms, but with Google offering services for free (i.e. docs, apis, etc.) they appear to be blocking external innovation across multiple spectrums, especially vs. competitors. I say external because Google is by nature an innovative company, pushing web applications forward. I’ve heard software developers fear getting into a product war with Google, not because of technical merit and launching a great product, but because competing against a company that doesn’t have to charge anything is downright stupid.

So how can Google give away it’s products? It all comes down to online advertising. In most cases, individual Google apps rely on funding from the adsense division of Google. In their struggle to “Not be Evil” Google uses advertising revenue to push the cost of other products and services way down… to nothing.

I call this practice a Googleopoly , as they can price fix and go directly after competitors by offering a similar or superior product for Free (ex. Microsoft Office Suite vs. Google Docs). This is slightly different than traditional monopolies. Monopolies generally have the corner on a market, being the soul producer of a good or service. This monopolistic power, allows monopolies to set costs, below market value to drive away competition. Monopolies are also characterized by two factores: single seller, and market power. Google is not a single seller in the web application sphere, but it’s market power is undeniable.

Have a great idea/product? Is Google working on it in parallel? What value do you have in seeing it through, when you will have to compete against a free product. Yes, I agree that consumers are the beneficiaries of this, but in essence I feel that the business principals in play need to be discussed more. Long ago, I was taught, “the market sets the price ” but in Google’s case they are setting the price at nil and are unintentionally (or intentionally) destroying their competitors. All big companies can do this. They pick a competitor, highlight weaknesses then attack.

What do you think?

Tags: development, Google, markets, technology, web applications

This entry was posted on Wednesday, January 27th, 2010 at 9:07 pm and is filed under Business Strategy. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.