Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.


 
Wednesday, March 14, 2007

How Not to Think Strategically About the Future of ... Pt 988582


Don Dodge says:

"...Google should have taken my advice and just done an exclusive advertising deal with YouTube. Google is all about advertising. They didn't need to acquire YouTube to accomplish their advertising objective."

This is a great example of how to get post-network strategy exactly wrong.

Sure, Google's business model is (currently) built on advertising.

More importantly - Google's strategy and DNA are built on being Darwinian.

YouTube is important not just for advertising bucks, but as a lab - a source of new strategy space in which to run experiments about how, when, where, and why to reshape the future of advertising.

That's how Google continues to leave competitors in the dust and analysts breathless - by focusing on the intimate link between DNA, strategy, and advantage.

-- umair // 1:57 PM // 5 comments


Comments:

I couldn't agree more.
// Anonymous danielbower // 3:09 PM
 

I like reading Don... he's not afraid to toss his opinion out there. It's often times wrong, but it always makes me think.
// Anonymous Fraser // 3:37 PM
 

I like reading Don - he's not afraid to share his opinion. Often times he's wrong, but he always makes me think.
// Anonymous Fraser // 3:37 PM
 

And... the Google's darwinian approach mimics the approach preached by Josh Kopelman wrt investing in his recent post on failing cheaper.
// Anonymous Fraser // 3:39 PM
 

Do you guys completely ignore the facts while pontificating about strategy and the future?

Google already had Google Video to use as a "strategy lab". They had a reasonable size audience and it is growing over time. It was certainly large enough to test any theories and collect user behavior.

Google bought YouTube for the buzz and distribution. They already had the technology and a great brand name.

They ended up buying a lawsuit, and several more to follow. This will end up being a multi-billion dollar mistake.

BTW, have you ever done the math on your strategy? I have. I wrote an in depth blog about YouTube traffic, licensing costs, advertising rates, bandwidth costs, and other variables.

The business model doesn't work. The strategy sounds great in theory, but in practice is doesn't work.

To be taken seriously in the business world you need to understand the whole picture; the technology, the strategy, the competition, the legal aspects, and the financial costs and returns. Each one of these areas is incredibly complicated once you dive into it.

Dreaming up hypothetical strategies without a deep understanding of the rest of the picture is pointless chatter. Hey, I like to do that myself in my spare time...but not at work where billions of dollars are at stake.
// Anonymous Don Dodge // 2:01 PM
 
 

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