At a search engine conference in 2006, Google CEO Eric Schmitt uttered a very significant statement that gave insight into Google’s underlying strategy – “Don’t bet against the internet”.
Google has repeatedly supported measures and introduced products that don’t have direct financial benefits for them, but push the online world towards openness and greater internet adoption.
Specifically they have:
- Promoted an open applications and open devices model that says that consumers should be able to download and utilize any software applications, content, or services they desire, on any device, with any network they prefer.
- Bid 4.6 Billion to ensure that the 700MHz wireless spectrum was auctioned off in the United States to encourage greater broadband competition.
- Released thousands of useful products, even when projected revenue didn’t justify the cost.
Of course, while noble causes Google’s obviously not doing all this for philanthropic reasons. They’ve realized that their business model intersects perfectly with the interests of consumers. An open, accessible and useful internet results in more users – which equates to more advertising revenue for Google.
When asked about the sprawl of seemingly unprofitable products Google releases regularly, Amit Singhal, head of search quality replied:
“The right way to look at it is not the money. Is there value to the users? If you bring value to the users, I think we will succeed in the long run. Some things make more money than others, but as long as we keep bringing value to the world, we will be successful.”
Now how does this relate to horse racing? The Internet opened up markets in every industry’s all over the world. Amazon took books, blogs and news sites like the Huffington Post crippled newspapers, P2P networks and torrent sites scared the bejeezus out of the entertainment industry.
But more generally (and more importantly in my opinion) with just a click of the mouse customers could walk out on long standing relationships with companies they didn’t like.
For nearly a century racing had a virtual monopoly on the gambling dollar – the customer had no choice. In New Zealand (where I’m from) the only place you could drink after 6pm was a racetrack – how do you think that effected turnout? But nowadays the internet has massively accelerated consumers ability to walk away.
Although the search industry has huge barriers to entry (Google has so many servers that they try to build their infrastructure near power stations) they know that if they start to piss of their customers they may never see them again. They spend weeks trying to get users to click on links faster in their search results, and measure the results in the thousandth of a second.
Racing seems to go the other way; raising takeout, controlling signals, fighting over handle, and regulating who can bet and where.
It would be an embarrassment if the general public hadn’t already clicked away.
Jules Boven is the Marketing Manager for Harnesslink and also runs a search engine marketing firm
One Response
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Great points Jules, particularly about walking away. On the flip side, all of those things that make it easy to walk away create a high barrier to entry.
Just a few years ago when I first became interested in racing it was such a head-scratcher trying to open accounts that would cover all the tracks I wanted play. Some places were better than others at making it easy to figure out what tracks were (currently!) available. And then charging for ACH transfers or having to fund your account at an OTB? Talk about the opposite of open arms!