Why Content is the New Software
You know, there's a lot of talk about how, because of their exponentional growth, Google is becoming the new Microsoft, and that the unholy trinity (Larry Page, Sergey Brin, and Eric Schmidt) will deplace Bill Gates as the anti-christ/public-enemy-number-one. Well, there are two underlying lessons to be learned from this: (1) people will always rally against whatever is largest at any time; and (2) software is no longer the hot thing in the IT industry.
This, of course, doesn't come as much as a surprise. After all, Web 2.0 and social networking sites are all the rage these days. What does this suggest? Well, as Froosh at HipMojo explains:
But in light of “software as a service” trends (not a fad, certainly a trend) and the lowered cost of developing software, I certainly do think that - gasp - software has been made into a less lucrative trade.
However, with the surge in online advertising, I think that content is the new cash cow. Think about it: you can no longer do what you use to be able to with software. But if you set aside your bias of content, and think of what it was about software that you liked about it, then indeed, content is the new software...
In a way, this kind of makes sense. After all, much of the Web 2.0 boom has been built off of the back of content. For instance, there needs to be content that you can Digg. More to the point, though, Web 2.0 is largely about user-generated-content.
In fact, News Corps' complaints that YouTube was built on the back of their MySpace might be void in null in the sense that much of MySpace's allure to individual users can be attributed to the content they can borrow from when personalizing their profiles. After all, that's what really set it aside from incumbents like Live Journal and Blogger. Rather than YouTube having a parasitic relationship vis a vis MySpace, then, the relationship may have very well been symbiotic.
In sum, then, Froosh may be on to something here, after all. The hottest thing around right now is Web 2.0, and much of Web 2.0's bread and butter is user generated content. Does this mean that someone other than Google is going to be the next Microsoft? Well, maybe, but maybe not. After all, much of Google's own bread and butter is, itself, content -- even if it's not all user generated.
Sure, Blogger might be a small piece of the pie, but its underlying rev-model is what's important. By controlling the network, Google controls the ad space. Aside from ads being content in and of themselves, they need content to be featured alongside with. This is precisely what Google has done with their acquisition of YouTube.
While content looks like it is the next software, then, Google is going to be the next microsoft without handling any of the production themselves. Rather, they are doing something much more entrepreneurial by standing-in as a middle-man between the content and the ads that underwrite the production of that content. This is probably why Steve Ballmer likes to call them a one trick pony but when he does that, he's missing point. Google is a one trick pony as much as Microsoft is. They do advertising and Microsoft does software, but just as Microsoft does all kinds of software, Google does all kinds of advertising.
