Making a bundle on a button

Google made three key announcements this past week.  First, it unveiled Google Pack, a free software package.  This plays into its software bundling strategy, which puts it in direct competition with Microsoft.  Google Pack offers the following software programs free of charge: 
  • Adobe Acrobat Reader 7 
  • Ad-Aware SE Personal
  • GalleryPlayer HD Images
  • Google Desktop
  • Google Earth
  • Google Pack Screensaver
  • Google Talk
  • Google Toolbar for Internet Explorer
  • Mozilla Firefox with Google Toolbar
  • Norton AntiVirus 2005 Special Edition
  • Picasa
  • RealPlayer
  • Trillian

Many of these programs are Google products.  Notable exceptions include Adobe’s Acrobat Reader, Lavasoft’s Ad-Aware, Mozilla’s Firefox browser, Norton’s AntiVirus, and RealNetworks’ RealPlayer.  Google had already shown its penchant for bundling free software when it released Google Desktop, so its newsworthiness is debatable.  What strikes me as most significant is that Google Pack’s release underscores that other software companies allied with Google are now joining Google in its bundling strategy.  It shows that other companies are willing to link part of their futures to Google’s free software bundles.  It’s likely that recently formed alliances with companies such as Sun Microsystems and AOL will lead to enhanced Google software bundling.  Just as runs online storefronts for retailers such as Target, so too will Google become a conduit for other software companies’ products.  External software programs bundled in Google Pack such as RealPlayer are already free, but the future will be different.  It’s very likely that software that consumers now pay for will eventually be offered free of charge.  Rather than licensing software for a fee, software companies that align with Google will earn revenue through alternative means such as subscriptions or revenue sharing arrangements.


Google also announced that it will launch Google Video Store, a marketplace to download pay-per-view video content.  According to MarketWatch, it will initially offer content from Sony BMG, ITN news network, and the National Basketball Association.  It’s unclear when the service will launch.  While the online video-on-demand market is nascent and many media companies are focused on developing business models for this nebulous development, Google hopes to get an early lead.  Reaction to this news has been lukewarm, although it makes sense for Google to jump into this market as it continues to stretch the boundaries of search.  The jury is still out as to whether this service will be successful.


The third announcement is that Motorola plans to release cell phones with a "Google" button.  When pushed, the button will take mobile users directly to Google’s search engine on the cell phone screen.  Cellular phone real estate is extremely valuable, so it is very significant that Motorola will devote an entire button to Google’s search engine.  If successful, it will position Google to dominate the mobile search market as wireless service providers ask other handset makers to adopt the "Google" button.  In the past two years, Motorola has transformed itself from an also-ran in the handset market into one of the hottest cell phone manufacturers.  Its innovations will be closely scrutinized by competitors such as Nokia and Samsung.  During the tenure of CEO Ed Zander, a Sun Microsystem veteran, Motorola revived its cell phone division by turning out sizzling products such as the Razr.  The fact that Zander is a Sun veteran was likely a major factor in Motorola’s decision to team up with Google.  At the same time Motorola announced its alliance with Google, it also announced that it would include digital icons to give Motorola handset users easier access key Yahoo! features such as mail.  It’s noteworthy that Motorola will not include a Yahoo! button on Motorola handsets, nor did it choose Yahoo! Search as its primary search engine.  That is an incredible vote of confidence for Google Search.


So which of these announcements, if any, is most significant?  The button.  The cell phone button creates another avenue of standardization for Google to exploit.  Much like Microsoft Windows dominates the computer desktop, the Google button could quickly become ubiquitous on cell phones.  As cell phone technology advances and become increasingly multi-functional, the cell phone will supplant the computer as the tool of choice for many common functions, including search and mail.  Google is extremely wise to assert itself as the early mobile search engine standard.  It may never win the desktop war with Microsoft, but mobile search is a more promising growth market for Google.  One little button will make Google a bundle.

  1. Shawn

    I’ve been reading your blog for quite a while now and just wanted to compliment you on it. You’re one of the few foreign service blogs that I can always count on to have fresh content (even if it isn’t always FS-related.)I’m curious what you think of Sun’s stock right now in light of the new Google partnerships they’ve been forming.

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