Calling Google a Publisher Underestimates its Platform

Google has never positioned itself as a publisher, but a recent News.com piece looking at Google’s role in Web advertising says the company’s 2006 YouTube acquisition moved Google into the publishing space:

Google itself is a publisher, at least in one sense: it offers countless videos through [its] YouTube service. So Google has more incentive than just its DoubleClick division to improve display advertising.

YouTube is certainly content-centric, but Google didn’t pay $1.65 billion for all those videos. It shelled out big bucks for YouTube’s audience and, more importantly, its platform.

Publishers tend to see the world through singular products — books, newspapers, magazines, Web sites — but platform companies, like Google, see these same products as an aggregated stream of general content that needs to be delivered. If you control the delivery mechanism, you can mine it for revenue — something Google has already done through its AdSense and AdWords programs, which piggyback on Google’s search tools to deliver contextual advertising. Now that Google has monetized and claimed the Web search market, the company is expanding its platform into harder-to-crack content spheres: books, TV, and radio. This is why Google Book Search isn’t just an archive. It’s a content pipe that plugs into Google’s overall architecture.

Google clearly recognizes that its platform is only effective if it serves up useful material, as illustrated in this passage from the same News.com piece:

People are consuming more and more media on the Internet but paying less and less, [Google Chief Exec Eric] Schmidt said. “That’s bad for Google. We are critically dependent on high-quality content,” he said.

Publishers are experts at producing the content Google needs, but incorrectly labeling Google a publisher — and, ostensibly, a competitor — obscures the essential relationship between Google and actual publishers.

So, in an effort to keep publishers on target in the platform discussion, here are a few top-level items to consider:

Identify the platforms — Platform companies are focused on distribution, both through their own Web properties and via underlying delivery technologies. They may own popular Web sites that generate revenue through some forms of content (e.g. YouTube), but their real interest lies in aggregating and disseminating material. Google is the big platform provider, but Facebook and Amazon are both making moves into the platform arena. Even if you ultimately dismiss a particular company, it’s still important to competitively — and correctly — identify its platform moves.

Consider how your content can be delivered through available platforms — Look at user patterns. Ask yourself: How do people use these platforms to find and consume content? How are other companies effectively delivering their material? The newspaper industry offers an important case study for this point: It initially relied on subscription models for its Web content, but in recent years many papers have removed subscription restrictions so each article can be discovered — and mined for ad revenue — through Google and other search platforms. The industry is finally working with user behavior, not against it.

Look for revenue streams — We’ve recently harped on the importance of tie-backs and analytics in digital experiments, and those same warnings apply here as well. If you’re going to distribute your material through a platform, you need to have revenue streams in mind. This could take the form of advertising, affiliate relationships, trialware, or links/call-outs to upsell products. It could also be part of a larger branding campaign.

Add open formats to the production process — Google is a massive platform player, but the Internet’s open and distributed infrastructure allows other companies to develop their own platforms. Publishers looking for platform-friendly positioning can take advantage of future platforms — including those not yet envisioned — by incorporating open formats (XML, HTML, RSS, EPUB, etc.) into their production processes. There’s no reason to gamble on proprietary formats and exclusivity because the big platforms, and the smart platform companies, will use methods that have already been adopted by the widest possible audience. And if a closed format does reach critical mass (iTunes and AAC, for example), commonly used open formats will be incorporated into conversion tools and projects.

These general points require deeper contextualization for particular companies and initiatives, and the business threats presented by large platform companies need to be rationally examined and acknowledged (particularly, centralization and lock-in). Nonetheless, publishers need to recognize that misrepresentations are where the real threat lies. Incorrect platform assumptions limit the significant opportunities.

tags: , , , , ,