Archive for January 8th, 2007
Shashikant raises some interesting questions about BCCL’s investments in companies whose interests span a really wide spectrum. While the Times Group gets a lot of flak for doing things don’t exactly enhance its integrity, the practice is more widespread than anyone would ever like to admit. Most media companies these days take the ‘barter’ route for a variety of deals and it is not an unknown thing to include media exposure as a part of the deal.
But what I actually wanted to write about was not the shady parts of the media landscape. I don’t have any illusions about it, so I accept it pretty much as part of something that comes with the territory. The problem for most media organisations, especially for the successful ones, is to somehow stick on to the growth path even after they’ve been on top for a long time.
After a certain point in growth, you don’t get single or double digit figures quarter-on-quarter. The advertising money and circulation/viewership start flatlining and no additional amount of money you can throw at the problem will fix it, because there’s just no growth opportunity left for that particular product, other than stupid silly strategies like throwing bundles of newspapers in the rubbish bin or giving them away for free at toll-booths. At the same time, especially for a publicly listed company, you need to show growth, or at least intent to grow to keep the investors happy, the media buzzing/guessing. How in the world do you do that?
So they end up starting newfangled companies to diversify their interests, most of the time within the sector, but at times outside the sector too, for lack of viable investments within the home territory. It is strange, but there is no other way to look at it other than to think of the company as a very weird mutual fund in such circumstances. How else do you explain a media company investing in the airline business, garment retailing etc?
Mitch Ratcliffe writes: IBM (IBM) enjoyed 30 years of dominance. Microsoft (MSFT) 14 years. That suggests that the half-life of the value of market dominance is falling by more than 50 percent in each “age” of computing. Extrapolating from that trend, if we can call it that based on only two ages of computing, Google in 2007 has a year or two of dominance left.
Part of the problem with trying to predict Google’s ‘soon-to-come’ downfall is that most critics don’t have anything back it up with other than “this is so incredulous.” I really don’t think Google’s downfall will be due to click fraud; it is a nasty problem, but even with it, the system works well enough for more people to sign up for the Adwords program and by all means it is still cheaper and better than any conventional means of advertising available these days. And as long as that status quo remains unchanged, Google will remain top of the hill.
Google’s core strength is still its computing platform that gives it a ridiculously low cost/effort barrier to run something of a massive scale. The platform is the paradigm shift that powers the Google behemoth, it will take another similar paradigm shift of usurp it and I have seen nothing of that sort from either Microsoft or Yahoo!
If nothing else, I am bored with the current state of computing and it is hard to believe that we’ve been pretty much stuck with the same concepts and paradigms for the past twenty years. I would really want to experience something totally different before I turn 60 some day. Somebody, please oblige.