A cynic might argue that the music service "leak" was bad news management from Google, aiming to portray itself as a doer of music industry good, not bad. Whether that was intended or not, it raises an important point. Some time or another (and it looks like it’s going to have to be sooner rather than later) Google is going to need to decide whose side it is on. If it's serious about throwing its weight behind becoming a major digital music player, it's going to need to start making concessions to its label partners. And of course it will start seeing more of a business rationale for doing so: How long will it be before ad revenues from keywords alongside P2P links start to look smaller than potential lost Google music revenue? (Remember we’re not talking about cutting the keyword inventory, just ensuring that legitimate links appear in searches for keywords to appear against).
It has only been a few weeks since Google announced it would create a brave, new world with its Google TV platform. In all the reactions and the commentary, I have been amazed at how little people understand what's really going on here. Let me summarize: Google TV is a bigger deal than you think. In fact, it is so big that I scrapped the blog post I drafted about it because only a full-length report (with supporting survey data) could adequately explain what Google TV has done and will do to the TV market. That report went live this week. Allow me to explain why the report was necessary.
Some have expressed surprise that Google would even care about TV in the first place. After all, Google takes nearly $7 billion dollars into its coffers each quarter from that little old search engine it sports, a run-rate of $27 billion a year. In fact, this has long been a problem Google faces -- its core business is so terribly profitable that it's hard to justify investing in its acquisitions and side projects which have zero hope of ever contributing meaningfully to the business (not unlike the problem at Microsoft where Windows 7 is Microsoft). So why would Google bother with the old TV in our living rooms?
Because TV matters in a way that nothing else does. Each year, the TV drives roughly $70 billion in advertising and an equal amount in cable and satellite fees, and another $25 billion in consumer electronics sales. Plus, viewers spend 4.5 hours a day with it -- which is, mind you, the equivalent of a full-time job in some socialist-leaning countries (I'll refrain from naming names).
Google's goal is to get into that marketplace, eventually appropriating a healthy chunk of the billions in advertising that flow to and through the TV today with such painful inefficiency.