By "true value" I mean that the product creator has a positive ROI on his time, and the product consumer has a positive ROI on his money.
This does not mean that the user must be the buyer. A clear example is a productivity tool (product ABC) that Employer X buys for its employees. The employees save enough time to offset ABC's cost and therefore Employer X saves money by buying the tool. The creators of ABC used sufficiently small hours creating a reproducible product and therefore make a profit.
The less clear example is that of advertising. Google sells real-estate and guaranteed views and has a positive ROI. The ad company pays for the real estate and gets sufficient hits and hopefully has a positive ROI. You get to use Google's services with some distraction which you find to ultimately save you time, so you also have a positive ROI.
That is a good point about real estate and a great POV but I think this is not Google's value proposition.
Google is saying, use our search engine and you find what you want better and faster. We save you time. (Do no evil?) Google doesn't aim to be a "distraction" that ultimately saves you time, they want to save you time period. If they could, they would give you exactly what you wanted each and every time. But their algorithm can't tell when you're browsing for pleasure or looking for something in particular. It can come close, and in the end some people will be distracted by them whereas others will have exactly what they needed.
Google wants to make profit in the opportunity costs involved in searching for something. Searching for a product has all sorts of pains associated (analysis paralysis, getting lost, etc etc)... google wants to make profit between this consumer cost and the amount of ineffective money spent to reach consumers.
It also seems like you are focusing a lot on banner ads. I think one interesting statistic (sorry can't find a more recent one right now). Is that banner ads are about 20% of ad spend whereas search is 52%. I think Search is a even higher percentage now. Source: http://www.scribd.com/doc/12991408/Internet-Advertising-Tren...
Comments
By "true value" I mean that the product creator has a positive ROI on his time, and the product consumer has a positive ROI on his money.
This does not mean that the user must be the buyer. A clear example is a productivity tool (product ABC) that Employer X buys for its employees. The employees save enough time to offset ABC's cost and therefore Employer X saves money by buying the tool. The creators of ABC used sufficiently small hours creating a reproducible product and therefore make a profit.
The less clear example is that of advertising. Google sells real-estate and guaranteed views and has a positive ROI. The ad company pays for the real estate and gets sufficient hits and hopefully has a positive ROI. You get to use Google's services with some distraction which you find to ultimately save you time, so you also have a positive ROI.
That is a good point about real estate and a great POV but I think this is not Google's value proposition.
Google is saying, use our search engine and you find what you want better and faster. We save you time. (Do no evil?) Google doesn't aim to be a "distraction" that ultimately saves you time, they want to save you time period. If they could, they would give you exactly what you wanted each and every time. But their algorithm can't tell when you're browsing for pleasure or looking for something in particular. It can come close, and in the end some people will be distracted by them whereas others will have exactly what they needed.
Google wants to make profit in the opportunity costs involved in searching for something. Searching for a product has all sorts of pains associated (analysis paralysis, getting lost, etc etc)... google wants to make profit between this consumer cost and the amount of ineffective money spent to reach consumers.
It also seems like you are focusing a lot on banner ads. I think one interesting statistic (sorry can't find a more recent one right now). Is that banner ads are about 20% of ad spend whereas search is 52%. I think Search is a even higher percentage now. Source: http://www.scribd.com/doc/12991408/Internet-Advertising-Tren...