Google, Facebook, and the Future of Online Business Models

Hamburg.
Unfortunately I had to miss the talk following mine at next09, by my host at the Hans-Bredow-Institut, Jan Schmidt - I had to do a couple of interviews with German media. So, I'm now in the post-lunch 'fireside chat' session with Jeff Jarvis and Umair Haque. We begin with a discussion of business models in a Googlified economy, and Jeff says that sharing your intellectual property always comes first here. In the end, you don't charge as much as the market can bear, but as little as you can bear.

Umair adds that the companies who do well in this market in the first place don't worry about their business models; rather, they focus on what they do best and allow the model to happen. Jeff adds that many companies aren't even aware of what they're best at (newspaper companies still believe they're best at printing newspapers) - so they need to experiment and see what succeeds. (And they need to give themselves licence to fail in the process.) The only sane response to change is to experiment, Jeff says - and if there is failure, to fail quickly and fail cheaply if possible.

Can everyone be like Google, though? Isn't Google extraordinary because of its extraordinary market position? Jeff says that sharing information is not a zero-sum game; knowledges creates knowledge creates knowledge. And Umair adds that Google's model is not to keep users on its own site; instead, it actively provides access to other spaces - indeed, the more spaces, the more useful the Google service. And (unlike Facebook) Google understands that its users will provide instant and vocal feedback on anything it does - and it operates with this understanding in mind. When we're all hyperconnected, the costs of being evil increase massively, Umair says.

By focussing on business models, we miss the point, Umair says. The problem today is making things that are worth exchanging in the first place. Also, there's a new understanding of corporate goals - the aim for many new companies is simply to be big enough to be sustainable, not to dominate their market. For the media, the new business model must be built around users talking to companies, not media organisations talking to 'consumers'.

Interestingly, Google is itself not a social creature; there are few social media aspects to its core services. Jeff says that the god at Google is data, not people, it doesn't have social DNA. Facebook, though, hasn't been able to exploit that Achilles heel - it has its own problems (it doesn't fail well, as recent controversies have shown). Google experiments more, and fails more gracefully. Google, then, isn't a social network itself: it simply provides the tools for us to organise ourselves, across all the platforms available on the Web. The key areas here are social, live, and local organisation, and Google already provides some tools for each of these. (Facebook is also slowly understanding that it needs to provide such tools, dropping its walled garden approach which attempts to have everything take place within its own platform.)

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