Geniuses at Google

The next few posts relate to IPL 2010. It might look a little dated now, but please remember that I had first written in on April 1 2010 when the IPL was actually taking place –

Google have a very good policy. Do not interfere with what user wants to do. In fact, it was the only site which relied on getting users OFF their site to become successful. All other websites are designed to make you stay at their page as long as possible.

 

Even with “get users OFF” policy google is successful because it managed to find a way to make money while getting people off their site using google adwords. Google Adwords are the ads you see on the right hand side of the page when you do a search like “Memory profile .NET”. When you click on one of the ads on the right hand side, google makes money.

 

All this was fine, but my respect for the people in google increased with the start of IPL 3 cricket tournament this year. Let me explain…

 

In 2006, google spent 1.65 billion dollars to buy YouTube. I was always wondering how they would make money out of such an offering. People are used to watching free videos, so converting to paid service would just kill the site. Keyword based search that they had would not work, because the kind of users who search on google are different from the ones who search for a video. ex: When I search for “.NET memory profiler ” its most likely that I want to download a trial version of the product and maybe buy it. Hence advertisers will queue up for such a keyword. However, when I search for “Yuvraj Singh’s 6 sixes” on you tube, I am not looking to buy anything. I just want to while away some time. Hence not many advertisers would want to advertise in you tube.Google needed a different way of earning money from their 1.65billion$ investment.

 

All that has changed with IPL 2010. Google struck a deal with BCCI to stream the match live on you tube.  Google was free to sign up their own advertisers for these matches. Currently Hero Honda and most other TV advertisers are also advertising on You tube. The revenues would be shared between Google and IPL(BCCI).

 

With this move, computer is suddenly challenging the reign of TVs over live events.I believe TV rights deal sizes would slowly start reducing and internet telecast rights would become costlier in the future.

 

If I owned sites like cricinfo.com, I would be very concerned about my company’s survival. These sites would give textual updates on what is happening in the match. The company does not have to pay anything to BCCI to do this. SO, their expenses was not much. However with the streaming of live content, these kinds of sites would lose eyeballs to YouTube.

 

Only way to compete is to bid for the rights next year, which would mean higher costs for the company. I believe this is a perfect example of disruptive technology invading and destroying an existing company.

 

Currently not many people have broadband capability to watch IPL on YouTube. So, the market is small…most of the people will still go to sites like cricinfo to get match details. But soon, with improvement in broadband’s penetration and speeds, most people would be shifting to YouTube like service.

 

If you were the owner of cricinfo kind of site, what would you do to counter YouTube?