Is Google the Next Netscape?
To draw a parallel between Netscape & Google in their fight against Microsoft, it is necessary to examine the various similarities between the two situations and see if the tactics that worked then will work now.
Netscape’s business model consisted of selling webservers to organizations. Its legendary web browser hardly brought in any money through direct sales. What it did do, however, was give the fledgling company instant high visibility in the online world. When organizations were shopping for a webserver, the Netscape brand was instantly recognizable. Additionally, their browser’s position as de facto standard web browser allowed Netscape to effectively control the development of HTML, giving it an edge over competitors in the nascent market for webservers.
When Microsoft needed to crush Netscape, it went for the jugular. Via a combination of sketchy but effective tactics it was able to unseat Netscape from its comfortable spot atop the web browser heap and place its own IE there instead. This meant that it was now Microsoft who wielded the power to influence the direction of web development. It also tarnished Netscape’s image as a leading Internet brand. Between that and Apache’s sudden rise to dominance, Netscape saw sales of their webserver decline. Since they had never found a sustainable line of business that was independent of the browser’s popularity, they could no longer survive.
The critical question for Google is whether or not they could survive if Microsoft managed to coerce the majority of websurfers to switch to using MSN as their default search engine. If Google is sufficiently well insulated against this then they can weather whatever Microsoft throws at them. It seems, however, that they currently make most of their profits from the text ads that appear beside search results. Unless they can branch out from that dependence upon the search engine before MSN is able to usurp Google as the world’s most popular search engine, Google will be hard pressed to avoid the same fate as Netscape.
Fortunately, Google does appear to have learned from Netscape’s mistakes and has already begun to reduce its dependence upon the search engine via two different strategies. Firstly, it is looking into other ways of drawing traffic to its site: News, Froogle, Groups, Blogs, Webmail. Secondly, it is finding novel applications for AdWords, the profit engine: the AdSense program & ad-supported consumer software (like Opera). Since Microsoft will require at least a couple of years to oust Google as the kingpin of search engines, things don’t look too bad for Page & Brin.
Contributed by Tony D’souza