I think this is pretty disappointing coming from Harvard Business publishing.
Google isn't trying to create new grand markets that they might or might not get a share of, they are simply commoditizing their complementary products, and making them as good as possible.
Complementary products are products that are used together, and where one enhances the other - cars and gasoline are classic examples. By commoditizing, or making cheaper, your complementary product your own product becomes more desirable: If gas is cheaper cars are more desirable. This is classical economics, and has been known since Adam Smith.
Basically what this means for Google is that they have a strong interest in commoditizing the webbrowser, making it as good as possible, thus making their own complementary products more desirable. This is also one of the reasons they are interested in firefox - it isn't philanthropy: it's purely business.
I'd venture that the author has a firm grasp of the economics of complements. I'd also point out that thrust of the article is not about "new grand markets" [although that is certainly a potential outcome]; instead, the point is to answer the question "What shared resource have you invested in - or should you invest in - to expand the pie sustainably for everyone over the long-run?"
At any rate, what is far more interesting to me is whether or not this comment would have been posted as-is in context (i.e. on the comment thread on the original article), which the author is clearly paying attention to.
Ouch! Here's Umair's response, in case you missed it:
"max,
"if you're seeing chrome as simply a story of commoditizing complements, you're missing its lesson entirely and totally. browsers don't become commodities because of chrome: exactly the opposite happens, which is the point of the post.
"you're following the logic of last-gen platform wars: we commoditize complements because demand for our primary good rises. yet, there are also costs to commoditizing complements: what we do in the process is poison our own ecosystem. that's the story of microsoft and sony: a million applications, games, etc - with innovation totally stifled.
"see the point? "commoditizing complements" is a zero-sum equation. chrome is most definitely not.
"i strongly suggest you read the post and discussion more closely next time."
I agree - If it was philanthropy, they would have simply plowed the investment and technology into something like Firefox (on top of what they already do).
Comments
I think this is pretty disappointing coming from Harvard Business publishing.
Google isn't trying to create new grand markets that they might or might not get a share of, they are simply commoditizing their complementary products, and making them as good as possible.
Complementary products are products that are used together, and where one enhances the other - cars and gasoline are classic examples. By commoditizing, or making cheaper, your complementary product your own product becomes more desirable: If gas is cheaper cars are more desirable. This is classical economics, and has been known since Adam Smith.
Basically what this means for Google is that they have a strong interest in commoditizing the webbrowser, making it as good as possible, thus making their own complementary products more desirable. This is also one of the reasons they are interested in firefox - it isn't philanthropy: it's purely business.
I'd venture that the author has a firm grasp of the economics of complements. I'd also point out that thrust of the article is not about "new grand markets" [although that is certainly a potential outcome]; instead, the point is to answer the question "What shared resource have you invested in - or should you invest in - to expand the pie sustainably for everyone over the long-run?"
At any rate, what is far more interesting to me is whether or not this comment would have been posted as-is in context (i.e. on the comment thread on the original article), which the author is clearly paying attention to.
Let's find out what happens - I just posted the comment to the site :-)
http://discussionleader.hbsp.com/haque/2008/09/where_is_the_...
Ouch! Here's Umair's response, in case you missed it:
"max,
"if you're seeing chrome as simply a story of commoditizing complements, you're missing its lesson entirely and totally. browsers don't become commodities because of chrome: exactly the opposite happens, which is the point of the post.
"you're following the logic of last-gen platform wars: we commoditize complements because demand for our primary good rises. yet, there are also costs to commoditizing complements: what we do in the process is poison our own ecosystem. that's the story of microsoft and sony: a million applications, games, etc - with innovation totally stifled.
"see the point? "commoditizing complements" is a zero-sum equation. chrome is most definitely not.
"i strongly suggest you read the post and discussion more closely next time."
I agree - If it was philanthropy, they would have simply plowed the investment and technology into something like Firefox (on top of what they already do).