Thursday, September 22, 2005

Toto, we're not in Kansas anymore

I made a bunch of posts on Google Secure Access yesterday, which have elicited responses from some readers like "it's not rocket science" and "all you've done is demonstrate how a VPN works." Let me clarify a couple of things.

At the time those posts were made, I had not seen any evidence of anyone else experiencing the same thing as me, i.e., downloading and using something which was publicly stated as being only available in one specific area thousands of miles from me. I was merely trying to present and validate my experience and elicit feedback.

It may not be rocket science, but the fact that it is Google is something which should interest and worry TelcoLand (and a lot of other people as well). I did a presentation yesterday where I made the case that in the wake of eBay-Skype and the other interesting developments of the summer, voice is no longer about a battle for minutes, but rather a battle for consumers' attention.

So, the first obvious point, and the one which really doesn't need saying, is that this is a datamining exercise related to its own advertising revenues. Considering that 98.8% of Google's revenue comes from advertising, that looks like a safe bet. And, maybe given the WiFi association, there's a location-based advertising element to it longer term. Also a safe bet. It is also clear from messages I have had that Secure Access also works fine on conventional desktop PCs, so the target gets much wider.

Secondly, as I tried to point out before, and Richard Stastny stated more clearly, this development puts GoogleTalk on a VPN, and what telco in its right mind is going to start indiscriminately blocking VPN traffic? Equally interesting to me yesterday was the thought that my Skype traffic was moving through GoogleLand. Why buy the company when you can swallow it? What kind of Skype user profiling is Google going to be able to do? Oh, and by the way, eBay has 65m users of marketplace services and 23m active PayPal accounts. I doubt those will be ignored in this exercise.

Thirdly consider how media consumption is changing. At a P2P conference I presented at last year, a Turner Networks executive made the point that what concerned traditional broadcasters about alternative distribution mechanisms was the lack of auditability, or the lack of confidence in auditability. His point was that, for all its failings, Nielsen data was still gospel for the advertisers in the States, and until there was an equally credible entity in the internet space, Old Media would move with caution. (There's also the small problem of copyright protection to consider - but they seem to think this can be cracked [but not the way you or I would use that term].) The music industry has reportedly been happy to pay for and learn from this sort of insight in the past, where it has been available. Imagine that capability on steroids, with Google as the stamp of approval. And if enough illegal file sharing starts moving through the VPN (which it may have some growing incentive to do), things are really going to get very interesting - the world's Darknet?

Equally vexing on a long-term view for the media world is how to understand and harness the phenomenon of decentralized media, especially user generated and distributed content. If your viewer/listener/reader's attention is being eroded by blogs, podcasts, mash-ups, and independently-produced content, how do you reinsinuate yourself into this equation? I would argue that Google could end up in a very advantageous position in this regard. Are you a broadcaster struggling to understand the dynamics of online gaming and how to react to/co-opt it? What about social networking communities? We have the data (you ain't seen nothing yet), but it'll cost ya. Nielsen//NetRatings, ComScore MediaMetrix, Hitwise, et al, all strive to fill this niche now (and probably make decent money in the process), but what about the future?

There are so many potential aspects to this that my mind is spinning, and will continue to do so. It's probably an overstatement to say that Google is preparing to swallow the internet, but I think this has the potential to shift a lot more power its way, and as such it's inevitably a loaded gun pointed at telco's head (and a few others).

UPDATE: Damien in Ireland goes the whole hog and asks how all this positions Google in dealing with labels/studios, and how the company may respond to the pressure it may inevitably encounter.

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