Umair Haque / Bubblegeneration
umair haque  


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

Wednesday, August 08, 2007

Edge Patterns: Short Circuit(ing the News)

Google's comments on news by "participants" make waves. It should - it's a (relatively) brilliant move.

If you've been reading Bubblegen for a while, this move should feel intuitive - as we've been discussing for ages, markets, networks, and communities for news are where context will coalesce.

Will Google clean up by doing this? To an extent - to exactly the extent that they let a true community coalesce around news.

Given Google's abject failure at seeding communities, it's questionable whether one will.

But it's a good idea. The strategic point is that it's a very simple way to add context to news.

Here, Google has publishers in an ever tightening pincer grip. What is the other major source of context for news? Blogs - and guess who owns Blogger.

There is a larger lens through which you should view this. It's exactly the kind of strategic move that errors like NYTSelect blinded old media players to - the opportunity cost of hanging on, fists clenched, to decaying business models, was exactly this kind of strategic innovation.

For example, imagine what a different mediascape we might have had if had been the NYT bought Blogger.

Of course, their assumptions couldn't have been more opposed to such an investment - and so we ended up with the star-crossed NYTSelect.

Or, for example, ask yourself: why didn't a single newspaper invest seriously in a blogging platform - when it's strategically trivial to note that blogs are nothing but context for news?

Because, of course, like most mass media players, news publishers have little idea of the shape of the new industry, its value levers, or what the emerging value chain (really) looks like.

And it's there - in the value chain - that the real strategic importance of this move lies hidden.

Google is short circuiting yesterday's inert, rigid, vertically integrated mass media value chain - by adding a feedback loop to it, the production process is made recursive.

This pattern allows strategic innovators enormous leverage - because they can literally use these feedback loops to cause economic short circuits; they create massive asymmetries in efficiency productivity.

Which is, of course, exactly what the moribund, long-suffering news value chain needs.

-- umair // 8:07 PM // 2 comments


I almost always agree with you so I'm struggling a bit with this post. I hope you'll help me with some clarification.

Isn't Google by filtering the context providers (i.e. Google approved) doesn't it not disintermediate the context providers?

If the two major paths people take to an individual piece of content are Google search and referrals, doesn't this strategy disintermediate the social network -- the biggest source for referrals?
// Blogger Kevin Gamble // 1:26 AM

This is an interesting move by Google -- they may finally be leveraging their dominance to force creation of a community. After all, who can afford not to post a comment to a Google News entry about them? It'll become as de rigeur a stop on the PR train as your basic PR Newswire press release, even for the smallest story.

And, of course, the availability of even the most basic added content on the Google News site will make it a more valuable site for the news consumer to visit, which will lead to a nice self-reinforcing circuit.

Plus, I'm sure we can expect some good, meaty, unedited posts from celebs on breaking scandals.
// Blogger Wade // 4:26 AM

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