Posts tagged ‘niche markets’

Don’t Be Evil

John Batelle’s “The Search: How Google and its Rivals Rewrote the Rules of Business and Transformed Our Culture” describes how Google’s unofficial motto is “Don’t Be Evil.” Before I read this book I would have unequivocally said that Google was abiding by its motto. But The Search made me think a little harder about the capacity for a company with so much influence and reach to be evil, perhaps without even knowing it.

Batelle recounted the story of Neil Moncreif, a small business owner based in Georgia who sells big shoes – size thirteens and over. It’s hard for a niche business like Moncreif’s to remain viable in any one geographic location. People with big feet are spread throughout the world and don’t cluster in Georgia, or any other one location for that matter. (See Life in the Long Tail for more on niche markets.) So Moncreif launched and did a pretty brisk business without ever having to place an ad. Until November 14, 2003, that is, when Google tweaked its search result algorithms, which dropped from the first result on the search “big feet” to below the hundredth result. The economic – and, ultimately, psychological – impact on Moncreif and his family was huge.

So while Google may have had noble intentions when it tweaked its algorithms, it broke it’s motto about not being evil when it came to a small business owner who sells big shoes.

I wonder if it is even possible to be a company as large and powerful as Google and not be inadvertantly evil every now and again? Moreover, is it sometimes necessary to do some evil for the greater good? The Search described how Google bent to the Chinese government’s wishes and eliminated controversial links from its results (perhaps evil?) so that it could provide the Chinese people with its valuable service (perhaps a greater good?).

So should we all be afraid of Google? I think Moncreif’s experience shows that yes, we should be afraid of Google if we depend upon it too much. And I think more and more people are starting to feel the same way. A recent article in The Independent, “Discontent flares over Google’s ‘dominance’” describes critics’ concerns that Google is the “overwhelmingly dominant force on the internet.” A recent Washington Post article, “Will 2008 Be Google’s End of Innocence” starts, “2008 may be the year that Google’s innocence ends, as media and governments start to cast a less forgiving eye at the behavior of the company that controls 60% of the search market and perhaps as much as half of all online advertising revenue.”

With prominence and power come a lot of scrutiny. That, above all else, might be why I’m not yet losing sleep over Google’s dominance.


June 18, 2008 at 1:58 am Leave a comment

Life in the Long Tail

The March cover of Spin Magazine featured Vampire Weekend, a fast-rising indie pop band of Ivy League grads. The band was the first ever to grace the cover of Spin before releasing an album, and yet the Spin story described Vampire Weekend’s meteoric rise to fame. How can a band become so famous without ever having released an album?

Welcome to the Long Tail.

The latest book on my social media reading list is Chris Anderson’s The Long Tail. The book describes how the rise of the Internet has transformed our economic model from one based on a limited number of hits (or inventory), to one based on millions of niches (and almost unlimited inventory).

Let’s take an example straight from the book. Rhapsody is an online music retailer that offered more than 1.5 million tracks at the time The Long Tail was published. Meanwhile, America’s largest physical music retailer – WalMart – carried only about 4,500 CDs at the time (roughly 55,000 tracks). WalMart’s inventory is limited by shelf and storage space in a way that Rhapsody’s isn’t. At first this might not seem like a big deal since music sales and downloads are highly concentrated on the top 5,000 or so hits. But virtually every one of Rhapsody’s 1.5 million tracks, even those far along the “tail” of inventory, will sell to somebody. In the words of Anderson, “A very, very big number (the products in the Tail) multiplied by a relatively small number (the sales of each) is still equal to a very, very big number. And … that very, very big number is only getting bigger.”

This means consumers have so many more choices and can tailor their purchases to meet their very specific interests and needs, which creates niche markets. This also means a band like Vampire Weekend can generate buzz and sales before it ever produces an album or goes on a national tour.

What are the implications of this shift from a culture based on hits to one based on niches? The Long Tail offers a few thoughts, including: more people will have the opportunity to create music and art, more watercooler conversations will take place online and across geographic lines instead of literally next to the workplace watercooler, and traditional media like radio and television will be forever changed. The Spin magazine story describes how bands and other creative acts could be “discovered” before they’re ready and how fame might be more fleeting than ever since bloggers quickly move on to the next big thing. As a consumer, I love how I can jump from Vampire Weekend’s website, to LILL studio where I can design my own purse, to niche education blogs like Eduwonk, Eduwonkette, and This Week in Education, which aren’t niche at all if you’re in the education policy and communications business like I am.

I think life in the long tail is a pretty cool place to be. I just hope we never fully lose the occasional and incredible synergy that happens when thousands of people experience the same cultural event at the same time.

June 13, 2008 at 5:36 pm 1 comment

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