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What Google can learn from John Sculley: How technology companies fail by placing their strategy burden on technology decisions

And so we come to the question of Chrome and H.264. First off, it should be clear that video codecs are infrastructural technology[1]. They are commodity algorithms which are generally invisible to users. They are ubiquitous and are “shared” in the sense that they are available for licensing often without much in terms of cost.

So they don’t really offer strategic advantage to the adopter. Some may end up adding slightly more to a cost structure than others, but not in a way that determines strategy.

Flash on the other hand is not infrastructural. It is not shared, it is not invisible to users, it is a brand, it has a significant business model and market value. It is sustaining to Adobe.

So the argument I’ve heard against Google’s decision is that they are using an infrastructural technology decision (a new video codec) to placate or sustain Adobe Flash, at the expense of Apple, a potential or perceived rival.

If this was the plan, it would be a strategic mistake.

The reason is that Flash will live or die on the basis of whether the business model is sustainable. That is decided by whether an integrated, proprietary technology is over-shooting and unable to adapt to a mobile computing future that demands modularity from components. If Flash is doomed, then its fate is inevitable.

In other words, you cannot use an infrastructural technology to defend a sustaining, possibly over-serving technology.

Which is why I don’t think this was the motivation.

I rather think that Google’s decision is a misguided emphasis on technical details in lieu of engaging in a deep strategic re-evaluation.

A RISCY BET

To illustrate the way technology companies fail by placing their strategy burden on technology decisions, here is how John Sculley made a decision to go with PowerPC and how he lived to regret it.

[Our best technologists] came back and they said it doesn’t make any difference which  RISC architecture you pick, just pick the one that you think you can get the best business deal with. But don’t use CISC. CISC is complex instructions set. RISC is reduced instruction set.

So Intel lobbied heavily to get us to stay with them… (but) we went with IBM and Motorola with the PowerPC. And that was a terrible decision in hindsight.

we totally missed the boat. Intel would spend 11 billion dollars and evolve the Intel processor to do graphics… and it was a terrible technical decision. I wasn’t technically qualified, unfortunately, so I went along with the recommendation.

I would argue it wasn’t a failure of technical knowledge–the technicians were right about the architectural advantages. It was a failure of strategy and understanding of innovation dynamics[2]. Sculley asked the wrong question. The question to be asked is not “CISC vs. RISC”. Rather, it should have been: Is the architecture the relevant decision point or is it the choice of partner? The technologists put the architecture choice above the more strategically important question of whether Intel had the fuel to continue getting better even if saddled with sub-optimal architecture.

That decision sounds very similar to what is being done today at Google. Increasingly, technology decisions are leading strategy. The question should not be “H.264 vs. WebM” or “HTML5 vs. Flash”. Google should be asking itself if mobile computing will allow browsing to remain the predominant interface for internet consumption. If, as I suspect, it won’t then no amount of browser tweaking will help. The browser is already infrastructural. It can’t be the object of strategic focus.

To get an idea of how this would work consider Flipboard. Flipboard turns the entire browsing paradigm inside-out. Instead of consuming social media inside a browser, the app presents it in a more natural magazine-like format.

What will happen when that media becomes predominantly video? Flipboard will be far more influential to content producers and their decision on which codecs to support will lead adoption.

By focusing on threats and byzantine standards machinations, rather than on broad, experiential learning, Google missed (yet another) next big thing.

Notes:

  1. In  IT does not matter. Nicholas Carr introduced the concept of infrastructural technologies. Becoming Infrastructural is what happens after a technology overshoots the market and stabilizes into a commoditized ubiquity. It ends up being “shared” in the sense of being openly and sometimes freely licensed.
  2. To be fair to Sculley, the research on innovation theory that would have helped him had not yet been published.
  • Splashman

    Um . . . H.265?

    • Joseph Rosario

      My thoughts exactly.

    • Snark

      Proper terminology is infrastructural, and thus does not matter.

  • Robbo

    H.264!

    • Horace the Grump

      H.264 today…. evolves to H.265 over time as the standard develops and matures… SO maybe a typo or maybe not…

  • Robbo

    Very interesting article. It’ll be interesting to watch how this plays out. I was about to deploy Chrome at my work for all computers. Now I’m having second thoughts.

    • dchu220

      Hey Robbo. I think Chrome does self-updates. As an IT guy, does that effect your decision to deploy it or not? It does mean one more thing that's out of your control.

      • Robbo

        Hi dchu220, Chrome does do self updates, but you can block them with a group policy adm which they supply. That way I can be in charge of the updates, and I can decide when to roll out the next version. A bit more work but I've been testing IE9 beta for a few months now and Chrome is way better.

  • http://twitter.com/sardire @sardire

    Perhaps the best article on this subject

    Google's dropping H.264 from Chrome a step backward for openness http://bit.ly/hGForW

  • charlesarthur

    "Google should be asking itself if mobile computing is sustaining to browsing as a metaphor for consumption. "

    This is the crux sentence, but I don't understand what it's saying. What does "sustaining to browsing as a metaphor for consumption" mean? I can't parse it. "A metaphor for consumption"? Surely it would be a proxy or something for consumption. "Sustaining to browsing"? Again, I don't understand what that's saying.

    • asymco

      Good point. It was a lousy sentence. I rephrased it to “Google should be asking itself if mobile computing will allow browsing to remain the predominant interface for internet consumption”

      • Consideration

        I think you might want to consider the difference between "browsing" as an activity in which one searches for content by following links between related documents, and "browsing" as in using a web browser.

        I think mobile devices may be less amenable to the first , but I think they are still very friendly to the latter. The web is no longer just a collection of hyperlinked documents; and web apps that present me with automatically preassembled or curated data sets are some of the things I use most on my mobile.

      • dchu220

        It's awesome to see that are willing to listen to opinions on how you can improve.

      • ExGoogler

        you should not try to interpret the wisdom of the crowds by making vague assumptions or asking vague questions, I know you are a great tech blogger and an Apple fan, but you need to present proofs from some sources like comscore, nielsen, gartner or whatever before telling/asserting browsing will go down in the mobile world. For eg in US we have 61 million smartphones, and around 200 million internet connected devices most of them PCs and some of them Macs/IPads, so if browsing were to go down as a primary means of consumption, that should be reflected somewhere by comscore, nielsen etc has browsing the internet going down ? or is it going up ? are Apple IPhone users using the browsers less and less, have you completely discounted the effect of facebook 'like' and the entire sharing phenomenon which are mostly hyperlink sharing on the effect it will have on browsing the internet through browser ?

    • ericgen

      @charlesarthur

      I'm certainly not an expert on this (or probably anything), but I believe Horace is summing up a few different things with that statement:

      Google's business is based upon extracting wealth from ads placed on search
      results and other pages returned in a browser.

      Currently, most of Google revenue comes from the extraction occurring on PCs because
      browsing is for most people on a PC the "predominant interface for internet consumption".

      And, even though it is rapidly changing, most people still use a PC as their primary means
      of internet consumption.

      So, if the bulk of internet consumption (or even just a substantial part of it) shifts from the PC to mobile, and mobile's primary interface with the internet is not the browser (i.e apps in iOS), Google's ability to extract wealth from interacting with the internet would likely take a significant hit.

      I think what Horace is suggesting may have more to do with winning a war versus just winning some the, perhaps unrelated and irrelevant, battles Google is currently choosing to fight. The real issue for Google is how can they extract their levy from eyeballs on mobile from whatever the means of interfacing with the internet is on mobile.

      In fairness to Google, it appears that someone was probably considering this with the AdMob purchase. I don't know any of the numbers, but it's doubtful the AdMob mobile ads currently bring in anywhere near what Google makes of browsing eyeballs on PCs.

    • http://franksting.net.au Gavin Costello

      Charles
      I think Horace is saying:
      "Will Mobile Computing require a WEb browser to consume content"
      I think we all know the answer is NO.
      Google, however, have hedged their bets to the "Browser" – hell they've even developed an Operating system based upon it!
      The rest of the industry have understood it's about the enablers. e.g. making IE a fundamental part of Windows or Webkit a fundamental part of the iOS. For example Flipboard, as Horace mentions. Or as I would put it – if you are an iPhone user, how often do you deliberately open the browser to go to a page, or does the app you are currently using just parse the content in it's own UI using Webkit.
      HTH
      Note MS made a mistake there by making IE and the tech that supports it into the same thing, thus attracting the regulators. Apple have cleverly separated them,

      • Marcos El Malo

        "Apple have cleverly separated them"

        And the engine part is open source! Not much there for regulators to sink their teeth into.

  • Davel

    Apple insider has a very interesting article on a very similar subject.

    You ask a very interesting question "if mobile computing is sustaining to browsing as a metaphor for consumption". I don't know the answer. It reminds me of a wired cover announcing the death of the web. Will mobile computing migrate to apps? So far for me the answer is no. While there are apps that I use, so far at this stage they are not good enough. So if browsing will continue to be a significant activity on mobile devices – which I suspect to be the case – then the question becomes "is Google's activities to control the user experience successful in driving their revenue?"

    Clearly Google sees Apple as their #1 competitor. They copied the iPhone, they are going after tablets, they are trying to take away h.264 as a common file format for video and replace it with something they control or something they do not feel is a threat ( flash ).

    It has been pointed out that Apple has not sued Google, but its partners. Webm is likely to have patent issues but Google may be strong enough to power on through or rich enough to deal with the financial consequences later after they have achieved their competitive aims. This is much like Microsoft in the 90's.

    In the end I think you are over thinking this. Google seems to be trying to slow down the Apple juggernaut.. So far they have been somewhat successful. Apple is betting their strategy on h.264. Google is trying to make it irrelevant. I think that is strategic thinking.

    Bringing up Scully and the RISC/cisc decision doesn't apply here. I think they were right on the technology. The power architecture was very robust. It's vector capabilities were much better than Intel's platform. The problem was twofold. 1) Intel proved very adept at solving very difficult problems to extend it's platform. 2) IBM/Motorola got into a pissing contest that hurt Apple's competitive interests and their individual strategic aims diverged from Apple's. Scully's misstep was not in picking the wrong architecture. It was picking the wrong partners.

    • Davel

      This probably is a significant reason why Apple is increasingly developing its own technology in house rather than using off the shelf components or seeking partners. The CPU issue that lasted for a decade really hurt them. They had no control. By using ARM which is widely available and has good power capabilities, and by buying processor expertise they get to have better control of their core resources and ensure that they can effectively control the essential parts of their product. Even if they cannot create superior technical characteristics of their version of ARM. They can control their products. They now are rich enough to absorb mistakes which is another reason I have no issue with their bank account.

      • dchu220

        But they can create superior technical versions of ARM for their platform. It's the ability to customize that is really powerful here. For example, in the A4 chip they removed pieces of the chip that they didn't need to save a little bit more power. That's what makes the integrated model powerful.

        Shaving off extra efficiency here and there eventually adds up. The biggest surprise of the iPad and iPhone4 was the 10 hours use time.

    • asymco

      One point I was also trying to make is that Google is wrong about Apple being a competitor. Apple is a potential competitor and a potential obstacle to distribution, but Facebook is a direct and unambiguous challenge for their income.

      Google tends to get target fixation–a trait shared by Microsoft.

      • Yowsers

        I've been wondering for some time now why Adobe and Google picked public, ill-advised fights with Apple. Taking the approach of a highly visible negative publicity campaign has been baffling.

        Yes, they have products and revenues to protect — I get that, but it doesn't adequately explain the spats over the last 2 years — and Adobe and Google remain important partners of Apple. Did Adobe really think badgering Apple in the press would get them Flash support in iOS? Did they handicap the odds of brow-beating Apple into submission?

        One wonders where were their in-house PR department and their highly-paid PR consultants in all this?

        Target fixation. Would that be an institutional characteristic (along the lines of size begets bureaucracies, which in turn inevitably acquires a certain biological inertia to sustain and expand itself), or an ego-driven one (i.e. Schmidt)?

      • dchu220

        One thing about the Flash battle is that it destroys consumer confidence in Adobe once a person uses Flash on their android and realizes how choppy non-mobile flash optimized sites ran.

      • http://twitter.com/aegisdesign @aegisdesign

        I think that's just a problem with Android and the Flash implementation on that. It's fine on Symbian and Maemo. It can't be helped that Android's UI does not use a GPU.

        Flash on the Mac has tainted Apple's view of Flash. It's still awful on the Mac compared to Windows and always has been. For whatever reason, and I suspect there are technical reasons on both sides that don't mesh, Apple and Adobe just can't reach an acceptable level of performance there so I can see why Apple doesn't want even worse performance on iOS.

      • davel

        i have asked friends who use android how flash works and most of them say it works well.

        perhaps the reports of bad implementations are overblown?

      • dchu220

        Perhaps. I haven't played with Flash on Android since the first implementation, but this is the first time I've heard that it works fine.

      • Thomas65807

        Apple is a competitor of Google's when it directs iPhone & iPad users to apps rather than to web searches as a source of finding and consuming online content.

        Unfortunately for Google, as it encourages app makers for Android, it undermines the viability of its own web search services. The only way to make this up is through advertising on its apps.

    • http://franksting.net.au Gavin Costello

      "Scully's misstep was not in picking the wrong architecture. It was picking the wrong partners."
      That was the outcome of the article, as far as I can tell.

  • pk de cville

    "Scully's misstep was not in picking the wrong architecture. It was picking the wrong partners."

    Whoops! I think that was Horace's point exactly.

    "Sculley asked the wrong question. The question to be asked is not “CISC vs. RISC”. Rather, it should have been: Is the architecture the relevant decision point or is it the choice of partner? The technologists put the architecture choice above the more strategically important question of whether Intel had the fuel to continue getting better even if saddled with sub-optimal architecture."

    • davel

      picking a partner is irrelevant if the technology wont get you were you are going.

      as i said in my comment i think horace is over-thinking the analogies here.

      i realized he came to similar conclusions in some way, but he came at it from a different perspective.

      "Rather, it should have been: Is the architecture the relevant decision point or is it the choice of partner?"

      my point is that in my opinion they got the risc/cisc answer right. at least at the time they made the choice. unfortunately they chose the wrong partners which was why i broke it down into two reasons that in my mind are not separated. if they chose the wrong technical architecture who cares what partner they choose? they would lose anyway.

      i think horace comes up with many interesting viewpoints not all of which i agree with. but he always has a reasoned analysis.

      his rebuttal is very good. facebook in many ways is a more dangerous competitor than apple to google's core strength.

      • Rob Scott

        You are actually saying exactly the something as what Horace said in the article but pretending to disagree. Why?

      • maddoguk69

        I'm glad someone else picked that up too.

      • davel

        I do not believe we are saying the same thing. As I say above I value the thought provoking posts that Horace proffers here.

        I think we are saying somewhat different things. Perhaps I am wrong:

        "I rather think that Google’s decision is a misguided emphasis on technical details in lieu of engaging in a deep strategic re-evaluation."

        My understanding is he posits that Google and Apple ( years ago ) are fixated on a minor technological issue whereas they should be looking at the strategic big picture.

        I think Google's stated action to pull h.264 from its browser ( altho leaving a defacto flash support of it ) is strategic. I think it is misguided but I think it is an attempt to attack Apple's core architecture. Apple is building its video strategy around h.264. The open source community has a problem with it because there is money involved in its use. Google is attempting to knock out one of the bedrock elements of Apple's multimedia strategy. I think this is a strategic move and not technical. I am not familiar with the codecs but AppleInsider claims webm is inferior to h.264.

        The Scully incident as I have stated above was a strategic move to get off Motorola's 68xxx chip because they lost the technical war with Intel. Apple made the decision to go with the Power architecture from IBM because of its considerable technical capabilities. In my mind the Power chip like the HP RISC chip were demonstrably better than Intel's offering. Both RISC chips were more expensive but Apple's margins can cover for that. Apple at that time valued performance over cost. Since Apple has always been vector oriented, especially with the Graphics crowd, high performance vector capabilities were highly valued. Joining with IBM a stable innovative technology company seemed like a good decision. I think the problem was with Motorola. My understanding is they built a consortium to include Motorola – a vendor they had a relationship with – was an attempt to reduce manufacturing risk and perhaps to maintain an ongoing relationship with a valued partner.

        In hindsight that was a mistake because the IBM/Motorola relationship proved problematic. Both held patents that Apple needed for their machines. Different priorities caused much pain for Apple. Eventually this led to Apple changing yet again the machine architecture of their products which is always painful for their customers.

        As stated above I believe their technical decision to choose RISC over CISC – which at the time was considered a dead end was correct. Why would they choose to hitch their wagon to a chip that in 5 years time was considered dead? As I stated earlier I admire Intel for overcoming its substantial architectural issues. They did something many people did not think they would achieve.

      • davel

        One more thing.

        In thinking about it WinTel was the enemy. Its customers and its engineers probably had deep seated issues with Intel. It was probably easier to choose IBM over Intel even if their offerings were equivalent.

      • Kizedek

        Google may have "strategic" reasons for doing whatever they are doing in the technological arena. One would hope so.

        But since we are talking about tech companies, everything has to do with tech in one way or another, and you have just demonstrated how confusing this is in your paragraph above about the "the Scully incident." You said it was a strategic decision, and then said it was "because of it's considerable technical capabilities." So which is it?

        I think what Horace is saying, and he correct me if I am wrong, is that long term, strategic thinking has to be about more than the technological issue of the day. If you are addressing the technological issue of the day in a way that bets your business on it or aims to extend a hold business model, particularly regarding technologies that have become underlying infrastructures, then you are, by definition, NOT being strategic. You are being reactionary and not proactive; you are not seeing the big picture.

      • Davel

        I agree that correct strategy is critical. My point is that for the Scully example they cannot be separated.

      • Kizedek

        My reply would be that circumstances sometimes necessitate technological decisions, and they have to be made one way or the other. Changing chip architectures probably couldn't be avoided — either time. That necessity is technologically driven. Whether Scully made all the strategically best decisions surrounding the change, though, is another question.

        I would argue that the Apple under Jobs was already thinking very strategically before it became necessary this last time. They had already laid good, long-term foundations and plans by creating an OS that was flexible, and that could be scaled to different processors and needs. The universal binaries for apps is also a good plan. And, on a related note, the way they have handled 64-bit processing has shown more forethought and strategy than the MS approach.

        Preparing for eventualities is part of strategic thinking; and realizing that integrated components will change inunforseen directions. The new Apple is ready for changes in infrastructure; Apple embraces the changes, and the opportunities to change, keeping everyone else wrong-footed. When you think ahead like this Apple does, then technological infrastructures don't take you by surprise. They can probably go with Intel, or AMD or NVidia just as easily as the need arises.

        What I think Horace is saying, is that the H.264 issue, is one of those areas that is fundamentally an infrastructure and thus technological decision. And it was essentially settled a couple of years ago. To go back and revisit it now really isn't strategic of Google at all. They are better off looking ahead in new directions, seeing the shape of things to come and preparing accordingly. Not trying to throw a stick in Apple's spokes.

        In my opnion, H.264 was more of a strategic decision for Apple — first, they made it a few years ago, before they had to; secondly, it wasn't so much that they chose to go with H.264 as opposed to another codec that was strategic (after all, it was the be, so it was a bit of a technological no-brained): rather, it was realizing that power consumption and battery life were gong to be issues for the consumer with mobile devices; that's not infrastructure, that's UX, and customer satisfaction is a very tangible strategy.

  • r.d

    Flash is needed for ads which is why it is not gong to be dropped.
    Google is not promoting HTML5 for ads yet. when it does then Flash is dead.
    Also I think Google will use Flash as DRM as well.

    If H264 is missing from Chrome OS. Is it viable.
    When happened to full web.

    • Alan

      "If H264 is missing from Chrome OS. Is it viable.
      When happened to full web."

      It's almost a haiku.

  • Mark Hernandez

    Does it make sense to apply these principles in the analysis of Apple's strategic move to not support Flash on iOS? Or is that a horse of a different color? Please don't reply if it's going to divert attention from this particular discussion.

    • Kizedek

      Oh, don't worry, that was an easy one for Apple. Everything about Flash, both technologically and strategically, makes it something you should run from.

    • davel

      i think steve jobs already laid his arguments against flash in public.

      the central issue is control. apple does not want critical infrastructure elements to be controlled by a third party. especially one that in the past turned against it and hurt on of its core profit centers.

      the flash vs h.264 is not only a technical one.

    • Hamranhansenhansen

      Apple not using FlashPlayer in iOS is a strategic decision that just happens to also be a great technical decision. Apple made a strategic decision long ago that the only proprietary technologies they would depend on are their own. If it is not proprietary to Apple, it has to be a vendor neutral open standard such as HTML5 or H.264, or a vendor neutral open source project such as BSD or LLVM. That way Apple's destiny is in Apple's hands.

  • http://twitter.com/BrianSHall @BrianSHall

    I think this is brilliant. Not surprisingly, I agree with it;-)
    but two questions arise, both from the same paragraph:

    " Google should be asking itself if mobile computing will allow browsing to remain the predominant interface for internet consumption. If, as I suspect, it isn’t then no amount of browser tweaking will help. The browser is already infrastructural. It can’t be the object of strategic focus."

    1. Didn't you write the other today that mobile browsing should be used as a proxy for smartness? or did I miss that?
    2. Can you expound on "infrastructural…cant be the object of strategic focus" given Google's strategy on rapidly building out its infrastructure. I know it isn't meant to be the same thing but there are times when they meet.

    • http://franksting.net.au Gavin Costello

      I think there are two words here:
      "Browsing" -> the act of find and consuming data on the web.
      "Browser" -> the traditional tool used to perform "browsing"
      When Horace writes: "The browser is already infrastructural." he means the later. But as I wrote before, in 2011, it is no longer necessary to use the "traditional tool" to browse the web.
      This doesn't mean that "browsing" stops, you just use multiple other tools or "windows" to the consume the data you are "browsing"

    • asymco

      When measuring how phones are used, browsing is is a proxy for data consumption which is a measure of how much a smartphone is not a voice phone, hence a measure of "smartness".

      I would prefer to measure all IP traffic, regardless of which app is used, but we don't have access to that data.

      On the notion of infrastructural, check the definition in the Notes section. It has nothing to do with infrastructure spending. Also skim the first few paragraphs here: http://www.nicholasgcarr.com/articles/matter.html

  • http://twitter.com/metamatt @metamatt

    Lots of typos here… you fixed H.265->H.264, but you've still got:
    – "in lieu of engaging is" -> "engaging in"
    – footnote 1 has "coommoditized " -> drop the extra o, and the initial period after "IT does not matter" should be a comma.

    I only point this out because it's making the article harder to read…

    • asymco

      Thanks. Done.

  • WaltFrench

    Nifty how you've transcended the heated technical battles I see waged at, fr'instance, ars. Congratulations on seeing the bigger picture.

    But it seems that the level of passion on this issue challenges the notion that video codecs are already better than they need be, and they are part of shared plumbing. It is possible that the advocates are fighting a battle against sole-sourcing all our video; certainly many are. To the extent they're right, it will affect the economies of scale in ways different from your model, I'd think. Everybody knows that h.264 has superior technical efficiency to the alternatives, and it is already established, so this rebellion appears to be more than a couple of malcontents.

    Still, with h.264 licenses currently at about 10¢ per instance of viewer software, I don't quite get it; the issue seems a tactical one by Google, as you say. Apple has an easy countermove in making h.264 playback a system resource, and inviting all browsers and other software (e.g., Flipboard) to simply link to the system service without paying MPEG-LA a penny.

    I'd even thought this was the nature of the sweetheart deal between Google and Adobe, since h.264 is actually inside most Flash wrappers. But the licensing terms of h.264 mean that Adobe pays zero incremental cost for Android; it'd be a minor cost of doing business.

    Finally, a question: what other next big things has Google missed by its excessive focus on technology?

    • b-m-w

      " Apple has an easy countermove in making h.264 playback a system resource, and inviting all browsers and other software … "

      They already do. It is called QuickTime (don't think of the player, think of the extensive media handling framework). I personally don't see what all the fuss over the video tag is, it would be monumentally stupid for browser makers to roll their own playback code instead of loading whatever the video tag specified in the most suiteable OS provided media framework, quicktime, media, gstreamer.

      • Hamranhansenhansen

        H.264 is decoded by the GPU on all mobile and PC devices. The decoder is built into ARM SoC's, and NVIDIA and AMD GPU's. That is why it plays video with a fraction of the battery life of a software player like FlashPlayer. So the user already owns an H.264 player. That is why the idea of forcing them to download 10 FlashPlayers per year to play video is so asinine.

  • http://twitter.com/tommy4490 @tommy4490

    People have been asking when Apple will open an App store for Windows…maybe the time has come for someone to open a plug in store for browsers…so the many people who would like to use Chrome or firefox can also view h.264 video in their browser…

    • Hamranhansenhansen

      The problem with plug-ins is the Web is platform-independent, and plug-ins are platform-dependent.

      The Web is running on about 50 platforms now, not just Mac and Windows. So if the user needs a plug-in for your page, that plug-in has to exist in about 50 versions. Then you have the mess where you have to require, say, version 2 of a plug-in.

      Also, the user has to have I-T skills, like a 1994 computer user. Only 11% of Web user respondents in a recent survey could identify what a Web browser is … plug-ins likely score much lower.

      The Web is for consumers now. It has to work like a DVD player (MPEG-2) which is why H.264 (MPEG-4) is so important. It's already built into the user's hardware and the Web should use it rather than force I-T work on consumers by putting up "Get Flash" errors and the like.

    • Kizedek

      Were those the same people asking when Sony was going to start developing and selling games for the Xbox?

  • hodger

    Google's finances rely on the advertising community, who may very well be pressuring Google to rid them of their Apple IOS problems by propping up Flash, their preferred advertising weapon. To the advertisers, flash is not just a codec infrastructure item, but their primary tool for creating their wiggly ads & tracking users & results. They pay for those ads to be placed and would not blink an eye to lay that problem onto Google.

    • maddoguk69

      If that's true (and I'm not necessarily disagreeing with you) then it would demonstrate very blinkered thinking on the part of the advertising industry (who'd have thought it??)
      Lots of people already block Flash solely on the basis of the annoying, CPU-sucking Flash ads on websites – I know I do. I think the number of people doing that is only going to increase, and while the ad industry often try to serve static ads when Flash is not present, most Flash blockers work on the basis of letting the browser to continue advertising itself as Flash-capable, but then blocking the Flash content that is sent by the server.
      Ironically, if they just delivered static ads in the first place then they would actually get more views.

  • http://twitter.com/fictionalui @fictionalui

    "The question should not be H.264 vs. WebM or HTML5 vs. Flash. Google should be asking itself if mobile computing will allow browsing to remain the predominant interface for internet consumption."

    I think Google is asking itself the browsing question, and so far their answer to it, and to the HTML5 vs. Flash question too, is "whatever, as long as we can place ads in it and profile users".
    The interface in itself isn't much of a problem.
    You very aptly mention Facebook in the comments – that's the menace for Google, the emergence of massive competing ecosystems for advertising and profiling. Facebook, the iTunes ecosystem…

    Now, maybe it's me missing the boat, but I can't figure how the H.264 vs WebM issue enters in this strategical discourse. You pose it as an example of Google misplacing strategical focus, but maybe it's just us observers misreading and exaggerating its strategical value in this context.

    The debate is heated everywhere on "why Google is doing this", but pushing hard for marginalizing software costs in the web ecosystem is always been a part of Google's vision. I see Google's push for WebM against H.264 as another little piece in this vision, not as a big strategic decision for their future business.
    H.264 licensing costs may be negligible for many big vendors, but are insurmountable for many other players, as Mozilla and Opera show, and in any case they're there to stay, with uncertainity on how much they could grow when the current price scheme expires in 2015.

    Moreover, I think we're overestimating the impact that their decision to distribute Chrome with WebM alone is going to have on Flash and on the browsers' video players landscape.
    At the moment, at least 40% of the desktop web (IE6,7&8) can't yet use the video tag, and at least 25% (Mozilla + Opera) don't support, and never will, H.264 with the video tag.
    So Flash still has some good years of assured relevance in the field regardless of Google's decision.

    At the same time, it won't impact iOS devices either – all Flash served video is H.264 encoded and content providers have big investments to amortize in H.264 infrastructure. Even if WebM catches on big time, it will be slow, and Apple will have plenty of time to react and support it in advance of providers switching codec.

    • davel

      i think dropping h.264 for webm is a direct response to apple and its architecture.

    • dchu220

      I don't think the move will effect PC users much. I don't think the point of the move has anything to do with the PC experience. Whether it is through Flash or native browsers, the majority of people will still get video.

      The main people who may be effected are mobile and consumer electronics users. H.264 is in everything from your cameras to your DVD players. It's part of the reason why the 'digital hub' exists. Apple isn't even a major patent holder in MPEG-LA. Companies like LG, Sony, Samsung are the big patent rights holders. I doubt they will be supporting WebM.

      The battle for video codecs was won a while ago. Google is just picking battles that it can't win.

  • http://twitter.com/bennettp123 @bennettp123

    asymco: Very interesting article. But it feels like there's something missing from the last 3-4 paragraphs.

    To me, it reads: "Flipboard is a new paradigm for consumption of social media. Therefore, Flipboard has more influence with content providers than web browser(s), or it will in the future."

    Maybe I'm missing something, but I don't get it. How exactly does Flipboard have more influence? By being new?

    Regarding h.264 vs webM:

    If google made a technical decision, then they would have chosen h.264, which is commonly perceived as being technically superior to webM. Or at least they would have done nothing, and continued to support both codecs.

    However, they didn't choose the technically superior codec.

    So if it wasn't a technical decision, then it was either a philosophical decision (open standards vs open source) or a tactical one. And google owns webM, open source or not.

    • dchu220

      The difference is in people finding their content through apps instead of browsers. Google is invested in the browser because search is their primary profit engine.

      Doesn't need to be flipboard, you can substitute any number of apps

      • ExGoogler

        Sorry but an app or even a bunch of apps replacing google search is nonsense. You tend to think a smartphone is like a MAC or PC in that it behaves like a smaller computer with a number of apps installed in it, but that is fundamentally and totally wrong, smartphone is much much more than a little computer. As Paul Buchcheit states, a smartphone can be thought of as a single node in a global all encompassing supercomputer. You need to think from the perspective of a normal user, not from the perspective of technorati like Vivek Wadhwa who have axes to grind. Google and Facebook have got a better idea of this than Apple which still thinks of a smartphone as nothing more than a smaller computer.

    • maddoguk69

      "If google made a technical decision, then they would have chosen h.264, which is commonly perceived as being technically superior to webM"

      Not true. It's perfectly possible to make a decision based on technical considerations without the aim being simply to choose the most advanced technology. Their criteria could have been based on which technology was easiest to develop for their own purposes without having to bother with other patent holders, for example.

      • WaltFrench

        Point taken. But there are soooo many ways that WebM is an immature long shot, while h.264 is ubiquitous, dirt cheap and enjoys support across the whole spectrum. I think you have to see this as being a “technical” decision in that it's an anti-consensus, “we can make this work by ourselves” choice.

        Unless it was a “hey, here's how we can really ding iPhone and put Android in the driver's seat” genius flash of insight that any grown-up organization would've discarded after examining all the plusses and minuses. The only way that is NOT true is if Google has come to realize the free pass they've gotten in the tech media on stupid, dishonest or blatantly self-serving claims (often, all of the above).

      • maddoguk69

        "I think you have to see this as being a “technical” decision in that it's an anti-consensus, “we can make this work by ourselves” choice. "

        At the risk of sounding argumentative, I still don't see how a technical decision can be implied simply through it being 'anti-consensus' as you put it. Surely, whether a decision is regarded as "technical" or "political" etc. simply refers to the category of criteria upon which it is being based or the agenda it is seeking to serve? Are you suggesting that a technical decision cannot arrive at any conclusion which benefits a majority?

        None of the above should take away from the fact that I think Google have made a lousy decision, and are being colossally disingenuous about it.

  • Rob Scott

    First, thanks again for elevating the discourse from open vs. closed, WebM vs. H.264 to ‘does this make sense strategically’.

    First: Will mobile computing allow browsing to remain the predominant interface for internet consumption?

    You make an example of Flipboard as an app that has turned “the entire browsing paradigm inside-out.” I first thought I could argue that even with Flipboard you still need someone somewhere to do some heavy lifting finding the interesting articles on the web and that the best tool for that is still the browser. I however quickly realised that is exactly the reason why you are right, that is, between smart algorithms that find and pull articles that are of interest to us and following influencers/curators (individuals/blogs/websites) that we already follow on twitter, facebook, google reader and rss there are very few instances where we need to venture out into the web to discover on our own interesting content, meaning apps will become more important than browsers in the near future.

    If the browser in mobile will soon be supplemented by apps like Flipboard, does it make sense then to be fighting about codecs? And the answer seems to be maybe. If Google through WebM/Flash frustrates iOS, they indirectly frustrate all the apps that compete with browsers; this is true at least until Apple support WebM/Flash or WebM fails (the most likely outcome).

    I however have to agree with you that this does not sound very strategic. Apps and Facebook are bigger threats to Google, video codecs not so much more so if the competition can adopt the codec at no cost as soon as it appear to be winning.

    Lastly, thanks for always bringing a different perspective to things. Like most my first thoughts were that Apple or Microsoft would need to create a YouTube equivalent so to neutralise the threat posed by this move by Google. I now think that is not important, because if Google decides to cut off iOS (and WP7) from youtube that will cost them more than it will cost Apple or Microsoft as i will lose an opportunity to sell ads against those users. Also Android devices right now supports H.264 not WebM, dropping H.264 for mobile devices will be bad for Android users too. And if Apple or Microsoft finally decides to compete with youtube that would be another unnecessary competition for Google because Google's entire business model is based on domination/ubiquity/inevitability. So why piss of Apple and Microsoft to a point where it might be necessary for them to compete with you on video ad revenues too?
    To your point, WebM does not solve nor neutralise the facebook threat nor the threat from apps.

    • ExGoogler

      suffice it to say, you don't understand Google and its motivations or looking at it from the perspective of Apple shareholders who are probably paranoid about Google. A company that is trying to digitize all available human books from all time viz a huge and monstrous undertaking is something special.

    • Davel

      Nice points

  • timnash

    If it had been obvious that Intel could solve the x86 CISC issues, Steve Jobs wouldn't have chosen the 68000 for the NeXt workstations before moving NeXt to x86. It seems to me that John Sculley is trying to distract attention from the marketing decisions under his control which he should have been qualified to make correctly – overpricing the Mac at launch, maintaining fat margins until Microsoft caught up and spending money on chasing the business market when it was under IBM's control. Apple would have been better off if he had stayed selling sugared water.

    • WaltFrench

      NeXt had a very different business model than Apple: essentially NO consumer business and no sales momentum behind it, just a charismatic leader and a notion of a hot OS. In that situation, you need to deliver results quickly. X86 did not notably surpass the 68K until well after NeXt would've had diddly and died had they gone with Intel.

      • timnash

        With NeXT the attempt was to produce a high performance – low cost (for the times) workstation. Given Intel's hunger for design wins, they probably offered NeXT a very attractive deal but x86 didn't look like the best way forward. Similarly at the time the RISC for Mac architecture decision was made RISC looked like the better bet, because of what Intel would need to do to catch up, particularly when Apple had waited years for Western Digital's 16 bit chip that would run Apple II software.

      • WaltFrench

        @timnash, I hadn't been aware of this WD/Apple ][ relationshiop. Fascinating.

        It's somewhat ironic because my home computer immediately preceding my buying one of the earliest Macs was the 16-bit, Western Digital “MicroEngine.” It derived from the CPU that WD built for the DEC PDP 11/03 minicomputer, but had a different set of actual instructions so involved no DEC intellectual property.

        And that instruction set was the UCSD's Pascal system that pretended to be a 16-bit computer on something like 40 different hobbyist, 8-bit computers of the era. By implementing the system directly in powerful, actual 16-bit hardware (actually, in “microcode”), WD had a barn-burner for sale. It ran Pascal something like 15X as fast as the 8-bit computers of its day, roughly 5X (!) as fast as the IBM PC that followed after it. I fiddled with writing other front-end languages for it; although the machine was built to run Pascal, there was nothing keeping it from doing well with other languages. Still, the poky, almost “toy” 8-bit implementations apparently convinced many that Pascal was inherently slow. When Apple's Mac documentation came out based entirely in Pascal, I was thrilled but many were dismayed.

        I wonder why WD failed to deliver on the Apple spec. The 6502-compatible front end (microcode) would have been very simple to have built as an alternative front-end to whatever main system Apple wanted; more likely Apple just wanted a bunch of 16-bit instructions grafted onto the existing 6502's 8-bit language. There must have been some over-reaching or half-thought-out, oops-can-we-add-this designs that made the project impossible for WD to have finished.

  • http://twitter.com/aegisdesign @aegisdesign

    I don't know where to start with Google.

    Technically they are wrong on every level and they will do harm to the HTML5 standard by not supporting H.264 in the <video> tag. The tag was there to solve the problem of non-standard video support in the way <img> has (mostly).

    Strategically, surely they know that the only outcome from this is going to be that web developers and content creators will encode once to H.264 and then serve either HTML5 H.264 <video> or Flash wrapped around the same H.264 video.

    Philosophically I can see where they're coming from but unless they give up WebM to an open standards body, indemnify creators from patent liability, convince Apple and Microsoft to support WebM and convince hardware manufacturers to support WebM decode then this is pointless.

    Really, it makes no sense at all.

    • ExGoogler

      yes to an Apple lover, Google makes no sense, giving away OS for free, allowing fragmentation, handing part of control over to carriers/OEM partners, it is understandable, sorry if it feels like a personal attack on you, but you are in no position to debate the merits of Google approach and by you I mean any person who passionately likes Apple. Any attempt to analyze Google by Apple fans comes across as delusional(sorry to be personal over here). They are blind to other business models and still think MAC v/s Windows phenomenon at play here with this time the winner being iOS platform rather than the generalist Android platform due to more number of apps and higher quality of apps in apple appstore compared to Android platform.

      • Davel

        I think you are not reading the valid criticisms correctly.

        If u read the comments we get that google is search and ads. Giving an OS for free works for them.

        Not being involved in their marketplace and longterm quality support of the OS are concerns for their partners.

        I value the opinion of an x googler. U can provide a different perspective here. There is a lot of debate regarding who wins the platform war. The future is not clear.

        But pls do not be blind to the real strategic and technical concerns that google faces. Many posters here are not technical idiots.

      • asymco

        You don't know @aegisdesign enough to call him an Apple lover. Please refrain from personal name calling.

      • http://twitter.com/aegisdesign @aegisdesign

        No, it doesn't feel like a personal attack on me at all so no need to apologise. I've exactly four Apple products, an iMac which I'd get rid of if desktop Linux wasn't so awful, an old G4 PowerMac the kids use, an SE/30 (nostalgia reasons) and a Time Capsule I don't trust with my backups. IME the Mac has gone downhill since about OSX 10.3 getting slower and less reliable but still I don't think anyone has quite beat the UI and I'm used to it and have time invested in it. I've got zero non-Mac products – not even an iPod.

        The issue is web standards not iOS v Android or Mac v Windows. I'm a web developer and run a hosting company. I'd have said I was quite well placed to argue over the merits of Google's strategy and how it will affect the web.

        It actually has no affect on Android or iOS since both of them support H.264 currently so I'm not sure why you went off on your little tirade.

  • lrd

    After Apple announces that it's sold another 7 Million iPADs this Tuesday and the Galaxy Tablet slowly becomes yesterday news and two-for-one specials start appearing, it won't matter what Google adopts.

    Developers will develop for the platform that makes them money.

    iPADs, iPhones, iPOD Touches make them money. Just look at Angry Birds. Their putting there $ on iOS because it makes them $ period.

    • WaltFrench

      The AB story is interesting and bears continued watching. On Android, the developer says they need to go for the ad-supported model, and the technical challenges are different than on Apple. No decent-sized developer in a competitive marketplace can afford to ignore a big opportunity, even if it presents some different challenges than their other opportunities.

      My first post is to say that I think this free and open meme is powerful, just as Tea Party rhetoric is powerful, even though both are almost as incomprehensible to me—as @aegisdesign above you finds Google's move. However, there IS a kernel of insight here.

      Besides making money, developers are worried about being put on a leash, and Apple has stupidly allowed Google & Adobe to paint the iOS world as arbitrary and subject to what side of the bed Jobs gets up on.

      This is not just irrational, either. Buzzing around the web these days is the challenge: if you have a choice of making exactly $150K per year (inflation adjusted) for the rest of your life, versus taking a coin-flip that will determine whether you make do on $30K or live large on $1MM, would you take the coin flip? Most will not. As economists have long realized, the simple "higher expected outcome" ($515K) versus $150K is not enough to induce most people to take a 50% chance at lifelong poverty. So no, you probably make more money on iOS but you DO have the risk of building an app, then waiting weeks before it's rejected, and having other apps leap into the opportunity before you can correct your sins. This is the FUD that Google spreads and they do so because it resonates. I assess it as BS and FUD, but, and think others would easily enough, but the fear sure seems to be voiced.

      • http://twitter.com/judsontwit @judsontwit

        The counterpoint here is that Android and iOS do not mutually exclusive revenue models [ads vs. direct payment].

        If we agree that iOS supports direct payment, then iOS actually supports a superset of Android app revenue models.

        That is, there is *nothing* about ad-driven revenue that is exclusive to Android. If an ad-supported Angry Birds makes cash on Android, then an ad-supported Angry Birds and a for-pay Angry Birds will make even *more* cash on iOS.

        Again, ad-revenue is not exclusive to Android. It would work on any platform that supports Admob, The Deck, iAd, or whatever.

        By that logic, the best single platform is still iOS.

      • ExGoogler

        ubiquity(Android platform apps) v/s scarcity(iOS platform apps), ubiquity will win in the end, success of google and facebook shows that. Apple apps will tend towards zero cost price in the medium and long term.

      • dchu220

        Hey ExGoogler. Please stay active on this site. I like hearing your point of view.

        As price pressures. I agree that commodity apps will continue to feel extreme price pressures moving towards zero. But not all apps will be commodity apps. Not all pain points can be solved with a simple native app. Throw a server into the mix and the cost of supporting an app goes up. I'm not sure that Ad-support will be able to cover those costs since the trend for mobile ads is also likely to trend down.

        As for ubiquity VS scarcity. Ubiquity doesn't always win. That's a narrow view like 'open always wins.'. Those are simply strategies. Each has different business models and consumer segments. The Mac VS PC is an example. Both companies are making boatloads of money.

      • Davel

        I would say iOS is not scarce. Also in the ad world quality counts. So the question is what is the relative value of each click?

  • Wilhelm Reuch

    Well, perhaps Apple should buy a search engine after all. These days I use Blekko.com all the time. Very low in spam compared to Google.

  • Andrew

    "The reason is that Flash will live or die on the basis of whether the business model is sustainable. "

    While this statement was made in counterpoint to the question of Google's business model based on infrastructure, I don't think enough of us really understand exactly what Adobe's "business model" is regarding Flash.

    We can see that as a software publisher, Adobe makes money from selling content creation software such as Adobe Photoshop. As a holder of intellectual property, Adobe makes money from licensing IP such as print technology and fonts. However, in the case of Flash, Adobe gives away the Flash client software, and while it sells Flash Professional content creation software, it also bundles this with its Creative Suite. As far as I am aware Adobe does not gain revenue from content distribution, so it looks like Flash may be a "loss leader" for Adobe, especially when it has to provide support in terms of security updates on a weekly basis.

    In other words, if a combination of HTML5 and H264 by themselves can allow consumers to see the content, and if Adobe's Creative Suite can allow content creators to create the content, and Adobe to profit from that, what is the business case for Flash in terms of its financial benefit directly to Adobe, rather than to others?

    • http://twitter.com/fictionalui @fictionalui

      Well, Flash Professional still helps selling Creative Suites on his own and it's also sold standalone; then there's the Flash Builder Professional tool which is only available standalone (it's only bundled with the CS Master Collection, in the less capable Standard version).

      Anyway there's much much more than the basic authoring tool for Adobe to make money from Flash.

      Flash ubiquity sells a pletora of pricey server and deployment tools – Flash Media Server Enterprise/Interactive/Streaming and Deployment; Flash Media Playback; Flash Remoting MX; Flash Access; Flash Media Live Encoder; HTTP Dynamic Streaming…

      Adobe also has a consulting and support business for enterprise Flash solutions, and then there's the huge army of developers to which they sell formation offers, certifications, conferences, books, online courses…

      Finally, Adobe's elearning and enterprise collaboration tools offer is all based on Flash technology.

    • Hamranhansenhansen

      Adobe sells the only practical Flash authoring tool for $599 per seat. They want every website to buy a copy of the Flash authoring tool in order to publish video, or have to hire a developer who buys the Flash authoring tool. HTML tools are free and available from many, many vendors. It's the same MPEG-4 H.264 video either way, but Adobe makes a lot more money when you have to build your own video player with Flash instead of just putting in a video tag.

    • WaltFrench

      Previous replies are very helpful but allow me to minimize the cost of supporting Flash.

      In the PC world, they have to have reasonable support on a couple of browsers on a couple of versions of Windows. They additionally provide support for the Mac, which has been modestly crummy, and a challenge due to Macs having made many more changes in its graphics support over the past ten years.

      Today's world presents a dozen smartphone OS versions, many running a half dozen or more CPUs with different GPU support and different screen drivers is a whole nuther game, and is the likely reason that Flash exists ONLY on some fraction of Android phones, and the quality/speed/power usage is rather less than could be had with more careful software tuning or better exploitation of the graphics chips in every phone.

      This is the support issue you can see, and the answer has been that Adobe has attempted to get Google, their Open Screen effort and/or anybody else to pick up the costs of Flash. Apparently their efforts to sweet-talk Jobs into a deal didn't go that well, but in truth, Open Screen has been plugging away for 18 months with no visible results. (As an aside, I would love to hear the Playbook/Flash story.)

      Adobe is not yet ready to create WebM, so this move seems tactical for Adobe. (It cannot have been made without their awareness.) It will put a bit more risk into developing the h.264 and <video> workflow that would compete with Adobe's tools until Adobe can build yet another codec or two into Flash.

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  • Sergio

    It's not just the mobile threat that Google tries to counteract, Google must have been loosing ground in the desktop too. While still king of 'utility search' (precise, technical, chore-ish everyday queries), I wonder how much 'casual search' has been lost to Facebook/Twitter/etc. While in the early/mid 2000s the friend/colleague telling you "have you see this yet? Google it!" was prevalent, now that role has been largely taken over by social media (and apps). Not sure whether this is easily quantifiable, but I'm sure Google has taken notice.

    It seems to me that Google is in this Alice-like situation where it has to run faster to stay in the same place, hence Chrome, Android, the codec decision… Clearly this is not sustainable, you can't keep investing ever-increasing resources just to maintain the same level of relevance/market share.

    • ExGoogler

      facebook/twitter is in no position to steal away google's search share, only bing has the power to steal it away, but bing is still shoddy. Most of the apps are just glorified bookmarks(apart from the native games) that are just placeholders for the webcontent. Besides most people would still do a google search if they want to know about 'brisbane floods' for example, that way they can know information from more than one source. I think you don't understand that search is not a 'social' activity or a simple 'app' thing, two friends might discuss things on facebook/twitter, but to resolve that discussion they go to google search to confirm their arguments or come to a conclusion.
      Besides comscore tells us explicit transactional searching is increasing all the time even in the US supposedly under the spell of facebook and under the spell of 'apps'. I don't work at google anymore, but to expect people to search less due to facebook/twitter/app phenomenon is nonsense. Searching is going to increase, not decrease, maybe bing might get better, but I doubt it.

    • ExGoogler

      google is in the danger of turning into microsoft, all though they seem to be aware of this and are working at ways to avoid that like EIR, autonomous business units etc

  • Priit

    Apple should write H.264 plugin for Chrome, case closed.

  • Hamranhansenhansen

    I don't think this is really about WebM versus H.264, I think it is about YouTube versus H.264. The harder it is to publish video online, the more reason to use YouTube, which abstracts away the codec with its unique multicodec architecture. If I can just upload the H.264 from my camera or video editor to a Web server and put a video tag in my HTML and it works everywhere, then why do I need YouTube? But if I have to also program a FlashPlayer video player, or transcode a second version in WebM, and deal with browser incompatibilities, then YouTube looks better and better.

    So strategically, Google's choice of video codec is YouTube. H.264 is *absolutely not* being removed from there because they want YouTube to have universal playback. They just don't want the non-YouTube video publisher to have universal playback. So Chrome will disable HTML access to the user's H.264 hardware, which is built into every GPU from the past 5 years, including in mobiles.

    • http://twitter.com/aegisdesign @aegisdesign

      Good argument.

      YouTube took all the hard work out of publishing video online, however, people use YouTube mostly for free bandwidth, speedy content delivery and social discovery even if they have their own website to stick code in.

  • WaltFrench

    Amazingly not one post yet about television, feature-length movies and their convergence onto the intertubes.

    The unstated but most obvious mismatch that Horace highlights is that this move isolates Google from every one of the producers, distributors, ad agencies and ISPs. The networks' total cold shoulder to GoogleTV shows that they don't trust Google; this move gives them less reason to partner with Google in the future.

    Google has done reasonably well partnering with Adobe and the Live Free or Die software types, so maybe this is payback to them. But along Horace's line, they are the unlikeliest of partners for future growth.

    Whatever short-term advantage Google thinks it is getting, I take this as a watershed in their growth being circumscribed by a range of other firms who so transparently tries to undercut their existing businesses.

    • Davel

      I think the tv guys blocked google tv for the very reason that google seeks to replace their revenue. Google is trying to do what it always does. Make money off someone elses content. They can do this by offering value. Ie search to find it or ads to sell it.

      The tv guys already make tons of money. They have free tv – google model b4 the net- and cable. Why do they want to give it for free to google? I think google was overstepping here. To make google tv work, they have to offer the content guys something they want.

  • http://twitter.com/judsontwit @judsontwit

    The problem is that a business model is company-wide.

    That is, if Google the company has a solid business model, that gives them certain leeway to support products that do not have a good opportunity for monetization.

    I think the same may be true with Adobe's Flash – the business model is not with the product itself. Adobe's high-margin products, ad and video-playback lock-in, support the distribution, not any consumer-facing advantage of Flash itself.

    • dchu220

      To sum it up, a lot of companies don't mind breaking even or loosing a little on certain products and service if it helps them sell their primary product.

      Examples: Google Services, iTunes, Flash

  • DaveMTL

    So in summary: H.264 is here to stay due to all the video already in H.264, blueray usage and all. However Google wants to force us to use their CODEC in lieu of H.264 if possible and to only access h.264 through Flash for reasons of DRM and ad support.
    So the question is: how long do we need to wait to see what the H.264 committee will do in response? and how Apple will react to this in order to protect iOs?

  • Edwin

    It is clearly long past time that technology companies stop making decisions about technology. In fact, Google should clearly realize that all is lost, Apple has won and they should just sell themselves off for scrap.

    If I create an awesome H.264 player, I can be vulnerable to big royalty payments. If I create a great WebM player, I will never pay anyone royalties. That be a trivial difference to the asymco but not to a developer. Oh, and Flash is ubiquitous, Apple decided that "the best web experience" was one where a good chunk of the web just failed on iOS devices. Google, in pursuing royalty free technologies like WebM and Flash ( as a Flash dev, I will never have to pay royalties to Adobe for my Flash app sales), at least has a good work-around for interim support of H.264 that will hardly inconvenience anyone.

    • http://twitter.com/judsontwit @judsontwit

      Whether you create a hardware or a software product, you always have to consider the American patent ecosystem.

      You're not creating the chips and circuits from scratch. Codec aside — with some exceptions for simple programming tools, no one invents anything in a vacuum.

      You build on and improve on known knowledge, no matter what you do. And if MPEGLA produces evidence that WebM uses some of the same patented algorithms that H264 uses, then an inventor will either bargain or pay for it.

      You didn't invent WebM or H264. Either one you pick, you have to depend upon the graciousness of either MPEGLA or the Open Source community to let you build something with their technology.

    • Kizedek

      You create an awesome video player, full stop. You will probably use Flash or HTML. One of those relies on a proprietary technology that is old and sluggish and gets poor support and progress on anything but the desktop PC platform. Guess which one.

      Platforms are progressing and proliferating at a great rate these days, and Flash can't keep up. The codecs are incidental: they are underlying, integrated technologies. One has great hardware ending and decoding support, and it is more advanced and has legs for mobile computing. Guess which one.

      This isn't giving in to Apple, this is taking a step backwards. Everyone loses in the long run. This is like if MS were to have said suddenly that IE doesn't support JPEG images. PNGs? Forget about it. It's crazy. But hey, web developers can be sure that everyone can still see GIFs, isn't that awesome?

      • Kizedek

        Sorry, should have read: "…this is not, not giving into Apple, this is a step backwards." (and "encoding" in the second paragraph")

    • Davel

      Until very recently flash was non existent on mobile. Apple is dissing adobe for very real technical and strategic reasons. Adobe is not a saint here. Both companies went public with the disagreement because adobe wasnt able to get apple to buy their sauce.

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  • Enturkes

    Hello,

    I know this is slightly off topic, but I would really recommend reading the license agreements and use rights for the mpeg/h264 shenanigans. I am sure that for the vast majority of readers they will find it very surprising. While I am not here to take sides specifically the end cost for producing content in mpeg la formats is that your liable for expensive fee’s. While they have ‘waived’ the fee’s for some time there is no guarantee that those changes will be long lasting. At the end of the day providing a format that allows for your users to freely create and distribute their content is going to hopefully (insert idealogy here) important going forward. Anyone that is serious about content creation is either paying large licensing fee’s to mpeg-la or should be and that in itself is a major problem to the developing world. The debate is still out as to if webm etc actually infringe on any patents etc, I believe that it is likely given the current state of the patent system, it’s time for things to get interesting.

  • anders

    I think it would be neat to find some strategic vision in the Google plans of late. It spells out Google's condition: ailing, reactionary, out of touch.

    This is a fascinating piece of work. Google's decline shows how vision trumps technology. And it is still asking the wrong questions: what new browser web service can we distribute? With billions of iOS apps, the web browser and the free app model is dead.

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  • http://twitter.com/Talk2Tony The Real Estate Pro

    All this is a very thoughtful analysis , however I believe it misses the point completely, The writer and commentaries are looking thru the wrong microscope. This is a war, strategy is the only factor.1) If adobe had worked on flash as Steve had implored them to do and create a vehicle ready for the iPhone adobe would have been fine. The truth is they were lazy and they paid the cost.2) Google cares nothing about technology their only goal is harness eyeballs, they correctly perceived that Apples app model would threaten their adv. base and built arguments to counter the move. Googles business is to gain information period, all the software platforms, software is there for one purpose, when their software has mined all the data it can , the vehicle will be shutdown.Google is not in the software business they are in the information business their effort to create software is not to change the world but rather to use extraordinary profit margins to create advertising campaigns (disguised as software) to mine information to supply its beast. Thats why they do it for free!