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[dupe] Google’s New Business Model (stratechery.com)
40 points by pmcpinto on Jan 15, 2014 | hide | past | web | favorite | 20 comments

Whether they know it or not, and they probably do, their actual business is replacing individual human decision making with the ultra-optimal decision making of the cloud.

The best metaphor is the Navigate function of Google Maps.

Not only does Google Maps know more about real-time traffic patterns than your primitive human senses can access, but it can also best crunch that real-time data into optimal route finding way better than your primitive human brain.

Extrapolate from there into all areas of human life. Not saying this extrapolation is technologically straightforward, but this is what is happening.

Google isn't the only one in this space obviously. IBM and medical decision making is another big example.

Computers can make better decisions than you can. Not yet, but soon.

The Navigation example is a not a typical 'human decision'. We can't decide to avoid traffic if we don't know it's there, Google provides a method of detecting and analysing traffic that Humans could never do. Admittedly, it does then automatically recalculate the next most optimal route (sometimes).

A better example of a human decision would be, which "T-Shirt shall I buy?" or "What shall I have for dinner?". Google can't yet replace this decision making because it doesn't have flare. It can detect patterns and analyse them very well, but it can't be original. Yes, if you have Pizza for dinner every Tues then Google can tell you this, but if you do that every Tues then it's not really a 'decision' that Google is replacing, just highlighting a pattern. But until Google can read minds, or sense and analyse human hormones, it's not going to know if you would rather eat Indian or Mexican for dinner. It could suggest either, possibly based on previous eating habits, but it would just be a suggestion, and a guess at that.

As a further side-note, how does replacing human decision making translate into a business model?

It doesn't matter that much which t-shirt or which dinner. People choose bad t-shirts and bad dinners all the time.

Even when people choose these things well, it isn't because they are "original" but because they are attending to context, e.g.: an automatically generated t-shirt on Amazon referencing rape is not appropriate to wear in public, and if I eat pizza so often I may develop diabetes.

If Google offered dinner suggestions, it would recommend whatever restaurant bids the highest in AdWords.

Here's a story that recently came to the forefront of my internet feeds: http://marshallbrain.com/manna1.htm

It's about what happens when privately controlled interests use computers to optimize human decisions solely for business purposes. I'm not quite sure what to think of it yet.

"A great number of Internet users today were not raised with computers; it’s fair to question how many of those clicking on Google ads falls in this group."

This "digital native" myth has got to end. I teach young children, and they ain't the technological whiz kids like the ones portrayed in media. I could see most of them clicking a Google ad at some point in their life.

The digital native myth AND the myth that people only click ads by mistake both need to end. Sometimes people use Google with buying intent, and the ads are the best and most appropriate result returned.

If anything younger users are likely to see ads as a valid part of the Internet and not as a corruption of the old web they used to know, unlike grizzled fogies like us.

absolutely. I think a lot of the younger generation are so inundated with ads, that they are able to block it out with out even realizing.

Why do you think it's a myth?

Observation. I've worked with hundreds of kids aged 8-16 from all different backgrounds, all part of the "digital native" generation, yet hardly any can tell the difference between a web browser and the internet. The more technically inclined ones know how to rip mp3s from youtube videos, but none have heard of bit torrent or file-locker sites. Most of them are surprised to learn that webpages are made up of computer code, and more surprised to learn that anyone can learn this code and make their own websites.

Yet the parents all watch in awe as their kid swipes their tablet to play Angry Birds or Candy Crush. And then they remark "Man, kids these days. Just give them a tablet, and they're already figuring out how to use them. Guess the younger generation's just better at computers. Better than I'll ever hope to be!"

For those curious about whether this is a repost -- this link goes to the actual blog entry instead of the blog's homepage. It would probably be best of the other submission[1] went to the linked article.

[1] https://news.ycombinator.com/item?id=7059548

That was my mistake. I posted it after reading, and didn't notice I was on the home page.

The mind-boggling amount of money Google is making on their current businessmodel. How are they ever going to "top" that? Is it even possible to come close to anything so successful?

I think it's more circumstance that has lead to this success: the right people working on the right project in the right time: Google is born. But now? It's more about survival in the long run, the way I look at it.

>"The mind-boggling amount of money Google is making on their current businessmodel. How are they ever going to "top" that? Is it even possible to come close to anything so successful?"

Well Apple makes more money than them, so while this observation will be trite, yes, it should be "possible" to make something as successful as their current business.

Yes, I agree. Apple did re-invent themselves a with the iPod and iPhone a couple of times and were successful in new markets when already being a large company. I guess there is still hope for Google then :) Thanks.

"this is Google’s first true attempt to diversify its business, in this case into consumer devices."

Uh no its not, I own a Nexus 4 and Nexus 7 both of which were designed by Google, sold on Google's online store and run an operating system developed by Google.

Android now has more users then iOS, it's foolish to say they are just now starting to diversify their business from online ads.

This story was still on the front page, with the identical title, when this submission was made.

It's not even a good blog post. That Google is expanding its strategy is pretty obvious. Actually proposing what it might be would have been interesting.

I think the previous submission link was to the home page of the blog - this is to the actual post so that's why it was able to be submitted twice. Always a good idea to check the front page before submitting something though.

Google's business model: "Invading privacy for fun^H^H^H^H the NSA and profit."

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