Wednesday, August 20, 2008

The Parasite Tree

Modern day business can be a hellishly complex experience and there are businesses such as construction or logistics that I do not, and probably will never, understand (how the heck to you build a skyscraper ?).

But most online businesses are, at their core, simple affairs. And the most successful ones often live off existing businesses (think eBay and Google).

So, let's deconstruct Google:

- Index information (web pages, maps, books)
- Make the index searchable
- Make it available to an audience
- Build the audience
- Monetize the audience

Or Microsoft, which is a somewhat more traditional company:

- Build tools
- Sell tools

Or Microsoft in the future:

- Build tools
- Make them available online
- Build an audience
- Monetize the audience

Hmm, a theme seems to be appearing. It's making money from that pesky audience. What Google have is a very simple business plan linked to an engine for delivering audiences. A bit like TV used to be. But now there's a long tail involved.

There's a lesson in there somewhere....

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