I have been using the new Google browser for almost two weeks. You might have heard a lot of discussion about this new browser all over the world. People are looking to Google to deliver a new browser to combat Microsoft’s dominant Internet Explorer (IE), especially as IE Version 8 is on the way to official release soon.

I perceive this differently. What I have in my view is Google actually delivering its own OS (Operating Systems) to drive its applications – the applications that are now being delivered to its customers in the form of online applications like Google Apps.

Some people call this idea “cloud computing”. The concept is of future networked computer users having all their applications installed on networked servers, serving needs everywhere, so that users will never need to install the applications on their own computers and/or on their own office network.

There are two features that enforce my conclusion that Google is using to pave the way to use Chrome as a cloud computing OS.

The first feature is its own task manager. If you press the “Control” tab at the right hand corner of the Chrome Browser’s window, then select Developer → Task Manager, you can bring up Chrome’s own task manager to manage the opened tabs or windows of Chrome pages. This is an exciting feature. While it allows you to easily manage all opened pages under Chrome, I can also envision it as a real “task manager” to use Chrome to open and manage many online applications in the future using the Chrome windows.

The second feature is Chrome’s surprising capability to be installed on a computer by a user without administrative rights. Many Chrome users are not even aware of this. I can see this is a strategic tactic of Google, allowing you to install and use this browser on any public computer, even if you do not have administrative rights on that computer. This brings you a fast browser that has the possible future extensions of incorporating many of Google’s or its partners’ online applications with a single click of the button within the Chrome browser. With Chrome, you can use any of Google’s applications without hassle in any computer in the world, as long as it is connected to Internet.

Perhaps you can also see what I mean by looking at the actual design of the browser. The Chrome designers try very hard to get rid of the space consuming and cluttered tool bars that you commonly find in IE and Firefox. Chrome tries to give you as much space as possible for your “browsing” (or “application”) use. This also contributes to the feeling of using an OS instead of a browser window under Chrome.

These are the reasons why I think the release of Chrome is more strategic in nature. It is not merely a browser, but a future cloud computing platform. It is a platform that aims at attacking the lucrative application business of Microsoft, especially the Microsoft Office Package.

It will be interesting to keep our eyes on how Google will use this new OS platform in the coving future.

Tags: Google Chrome, Microsoft IE, IE 8, Chrome Task Manager, Google New OS

Google has just acquired YouTube for $1.6 billion US, one of the largest acquisitions in Google’s history. It is creating the same exciting feeling as we used to experience in the dot.com era in the ’90′s. However, the move is not really well understood.

If we take a look at the background of YouTube, it lacks the very successful elements of previous successful dot.com companies. It does not have proprietary technology nor does it possess customer lock-in capability – a very important element for a market leader to keep on dominating market.

In study of successful dot.com companies like eBay, we have to go back to a special network utility phenomenon called Network Externality Effect. Its basic argument is a network’s utility increases exponentially with the number of users in the network, making it more valuable in due course. For explanation of this phenomenon, refer to another post here:Â Metcalfe’s Law and Network Effect.

Theoretically if you run a similar auction network service like what eBay started to do more than 10 years ago, it’s unlikely you can knock down eBay because it has already had so many buyers and sellers entrenched in its network. Its network utility is so high that you have no way to attract new users to your service, no matter how hard you try. When a new user (irrespective of whether he/she is a buyer or seller) is looking for an online auction service to join, their most likely choice will be eBay.

The network effect keeps boosting the increasing network dominance power of eBay, making it virtually invincible. Sometimes we call this phenomenon “The Law of Increasing Returns”.

But we don’t see this in YouTube. It has no customer lock-in capability. Theoretically, let’s say that if you have sufficient capital to start with a server farm facility as big as YouTube, you can start offering services to public like they do, allowing users to upload their videos and share them with others. A new user can select your service or YouTube. YouTube has no immediate advantage over your new service to this new prospect.

YouTube model actually works on the viral marketing effect – the marketing effect that takes place to boost its exposure by people’s word-of-mouth. For a further discussion on viral marketing, refer to this post – Viral Marketing: A Powerful But Free Marketing Tactic. The new service can definitely take this viral marketing approach. It doesn’t matter if it’s a late comer.

Let’s go back to the discussion of eBay. The only way you can knock down eBay is to start a new service that rests on a new technology that eBay does not have. And that technology must truly benefit the new and current users of eBay in a way that can pull them away to try your service. This is the only way you have chance to succeed.

To put it another way, the way to win and keep your market position is to possess new technology, if you do not have the network externality effect that helps like companies like eBay.

We cannot see this in YouTube either. The video broadcast technology is neither new nor exclusive to YouTube. Although we know that they claim to have proprietary technology to identify copyright protected material, but that is not the main theme of this deal.

Google spent $1.8 billion US to acquire this company. The same amount of money (perhaps much less) can definitely be used to build broadcast facilities that resemble the power of YouTube. This is addition to the fact that Google already started its own video service years ago.

The only advantage we can see for this deal is its immediate access to its vast number of broadcasting page views, and that it can put to use for its famous and profitable Adwords’ service customers.

Even though it represents only a tiny portion of its vast market capitalization of $131 Billion US (as of stock closing at Oct 10, 2006), is it really worth the $1.6 billion US expenditure?

Related Topics: Google , YouTube, Google Acquires YouTube, YouTube is acquired by Google, Google Acquired YouTube, Network Externality Effect, Law of Increasing Returns, Network Effect, Market Capitalization of Google, Market Capitalisation of Google, Viral Marketing, The Law of Increasing Returns, network utility, customer lock-in capability, Google Adwords

[This discussion is the continuation of previous post: The Number One Rule of Marketing - Find Out What People Want And Satisfy That Desire ]

The Previous Question:

People like to follow trends and own the newest stuff on the market if they think that many other people do those new things or own that new stuff. They want to be part of a crowd, doing the “in” thing, having the “in” stuff. Is this then an example that need is created by products?

The Answer:

The reality is that people have an underlying need to be like others, not to stand out from the crowd. This need is not directly related to the product itself. It’s because they are afraid being isolated from people. They’re afraid that they won’t be part of “in” crowd if they don’t own certain things or follow certain trends. And that is the reason they want things most other people want. They want to ride the trend.

This is one of the fundamental needs – Love/Belonging – that comes after a person’s physiological and safety needs are met, as outlined in Maslow’s Hierarchy of Needs model.

So again, this explains how the product and the related marketing promotional activities cannot create a need in people. You must first uncover the underlying need in people and then satisfy that need with your product.

The Number One Rule of Marketing – Find Out What People Want And Satisfy That Desire.

Best online Marketing,

Damen
Related Topics: Love and Belonging, Maslow’s Hierarchy of Needs

When I took an MBA class ten years ago, one of my most respected marketing professors asked a very controversial question, “Is marketing able to create a need for a product?”

My first answer was: Of course, it can. We’ve all had the experience where we see something advertised on TV or our attention is captured by an attractive billboard for a new product, and we decide that we’ve just got to have that product – right now! But before we saw the ad, we didn’t even know that product existed! We didn’t have the desire to buy that thing. All of a sudden, we want it!

But at the end of the marketing course, I changed my mind. The reality is: “You cannot create the need for a product for a person. What you can do is to find out what the customer needs and satisfy that need.”

Why? There was an interesting debate in the classroom that night. Read on and you’ll understand.

To demonstrate his belief, the professor presented a case. The Tamagotchi. Ever hear of it? It is a small electronic game device that was very popular about ten years ago. In this game, there is a small electronic duck or chicken that you need to feed and play with. It “grows” if you take care of it carefully or “dies” if you neglect its needs, like eating or taking exercise regularly. Is it an interesting game? Yes. But what surprised people then was that this small gadget became so popular in countries like Japan and Hong Kong (my home country). Many of us really were curious about the successful factors behind that game.

We debated about the reasons for its success. Some students felt it was because people tend to use and try popular stuff, especially when it’s new to the market. These are the people that are the “trend setters”, who want to be the “first on their block” to try something new. It was trendy to have such a device. Others said it was because people wanted to be part of the “crowd”, part of the “popular” crowd and that’s what created their desire to own one.

And finally our professor raised a point that most of us thought was the ultimate reason that the game had become so popular.

In a crowded city, like New York, London, Hong Kong or Tokyo, many people don’t have time and space to raise little animals. However, we still have strong desire to have one, to have someone or something to care for. This gadget satisfied our strong need for having someone to love and take care (whether it is a baby or a small animal). And city dwellers usually have less resources to have a real one ourselves, so we turn to this little device for an artificial one that does not actually exist. But somehow that satisfies our underlying desire of loving someone or something.

Our professor commented that modern people are lonely. We live in crowded cities without any spiritual life. We dare not love people. We dare not raise our own children. We don’t have the resources to raise small animals. And this device can fill the gap in this empty area.

Bingo! We cannot deny people have this desire. And this gadget, in its own way, can really help satisfy this need.

Marketing is after all the act of finding out what’s missing in our customers’ lives and filling that need. To be a successful marketer, you have to find out what your customers’ needs are before you can satisfy them.

This principle applies to all areas of marketing, whether you are doing it on- or off-line.

Some argue that people like to follow trendy stuff if they know many people have this gadget. They want one for themselves, as well. Is it not a counter-example that need is created by the product itself?

The answer is “No”!

Watch out my next posting for follow up discussion.

Related Topics: Tamagotchi, Number One Marketing Principle, Satisfy Your Customers’ Need, Power of Marketing, Customer Demand, CUHK MBA, Professor Chan Chi-fai
P.S. Interested to know my professor? Here you can find his profile: Professor Andrew Chan Chi-fai

The MBA programme I took is ranked one of the best in the world. Check out the profile of it here