Google’s Castle: still breachable
Warren Buffet famously describes his favorite businesses as “economic castles protected by unbreachable ‘moats.’” The Apple ecosystem is a good example of this. Apple makes money a few different ways, but its primarily from hardware. While other manufacturers might make a faster tablet, or a phone with more features, it’s the full package of the ecosystem that keeps their loyal customers returning. This is a very hard moat to cross, it takes a lot to build an ecosystem.
Recently, there has been a lot of talk about Google’s unbreachable moat. The castle is clearly search revenue, and the moat is Android, Google Apps, etc, all this great technology that they give a way for free to increase web traffic and therefore search traffic. In fact much of it is less than free as they pay phone providers to use Android. How can anyone compete people ask?
While these are all good points for how hard it will be for a competitor to breach the castle, what seems to be missing in all these conversations is how easily the castle could self-implode.
One of the most popular Firefox addons is AdBlock, which hides all ads as you browse the web. All it would take would be for this addon to be packaged with a major browser for Google to see a very dramatic hit to their bottom line.
As powerful as Google is, it’s still a one-trick pony. Investors beware…
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perpetualmotion reblogged this from iamnader and added:
Nader’s observation that “As
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