Commentary
Has Google Strung Its Pearls Of Innovation Too Tightly?
- by Laurie Sullivan , Staff Writer @lauriesullivan, January 7, 2010
Similar to the way a delicate strand of pearls too tightly strung on a strand can buckle and appear out of place, Google may have begun to piece together too many services. Each pearl in the analogy aims to represent another service, from Google Content Network to Nexus One, all strung together by an advertising model (the string.) If the pearls get strung too tightly on the strand, they tend to become crowded and lose their beauty and potential.
Calling it a final offer, Google announced new terms Thursday for the acquisition of video-compression software company On2 Technologies in hopes of swaying reluctant shareholders to bite. But the company may have bigger problems to tackle -- linked to the name of its new phone, Nexus One.
The pending On2 acquisition came under fire in mid-2009 when shareholders became unhappy with Google's $106.5 million offer. On2 postponed shareholder meetings to consider the offer and provide more time to shareholders who might go for the deal, according to a recent United States Securities and Exchange Commission filing.
While On2's board has approved the sale to Google, the company's shareholders will have an option to vote on the acquisition at the Feb. 17 meeting. The agreement to amend the merger has been revised by both Google and On2.
"Under the revised terms, each outstanding share of On2 common stock will receive 0.0010 of a share of Google Class A Common Stock for each share of On2 common stock, as previously announced by On2 and Google, plus an additional $0.15 per share in cash consideration," according to a statement made public Thursday.
It's clear why Google wants On2's technology for encoding and decoding video data, since the company earlier this week unveiled Nexus One and a Web site to sell other Android-related devices. The new phone has a video camera with a flash and options to upload content directly to YouTube.
The Consumer Electronics Association (CEA) estimates wireless handsets will become the primary driver for revenue this year when it comes to electronics. Smartphones continue to lead the way, generating nearly $17 billion in shipment revenue and more than 52 million unit sales in 2010, according to the CEA, which estimates smartphones contribute more than 30% of total wireless phone shipments.
Google's new phone may have caught the attention this week of media and consumers, but Wired reports the family of sci-fi artist Philip K. Dick alleges the search giant lifted the device's name straight from a Dick novel without asking permission.
Dick's estate says the "Nexus" name originates from the novel "Do Androids Dream of Electric Sheep," which later became "Blade Runner." In that story, a private detective is tracking down a rogue android, a Nexus 6 model. If the word "android" sounds familiar, you can pretty much guess that this is not the first encounter Google has had with the Dick family.
The family, according to Wired, claims Google's use of the word presents a trademark violation, and sent the Mountain View, Calif., search giant a letter Wednesday demanding it stop using the Nexus name.
As Google continues to add services tied to advertising and search, you would think it would pay more attention to trademarks and learn from the issues created by using the name Android -- or, at the very least, have enough lawyers on hand to secure the rights before using the name.
Laurie Sullivan is a writer and editor for MediaPost. You can reach Laurie at lauriesullivan@gmail.com.
Laurie, Do we know for certain whether or not Mr. Dick's estate actually holds rights to the names "android" and "nexus"? Just because terms are used in a copyrighted work, does not mean that the artist is granted exclusive use of the term. Especially where common terms are involved, a major test of infringement has to do with confusion in the marketplac;, i.e. will consumers mistake Google's Nexus One phone with Mr. Dick's work, "Do Androids Dream of Electric Sheep"? My guess is that most would not. What might be interesting is if an internal Google document were to surface that referenced Mr. Dick's book as inspiration for both Googles OS and phone...that might be a different story.
I agree with you Dave. But it would be interesting to know about the person(s) who had a hand in naming the products and their thoughts on Dick's work. I'm also interested to know what advertisers think about Google entering new markets. Will the company lose focus on search and advertising, the string that holds all the beads together, or do people just consider it part of Google's evolution as a company?
The effect of Google's tactics and strategy on their core business sounds like the basis for a great in-depth article Laurie. With 70, 80, 90% of the search market tied-up though, I think Google could coast for quite a while before it had any effect on them.
As a long-time Google user, I am somewhat disallusioned by the fact that Capitalism seems to have replaced Idealism as Mountain View's guiding principal. And perhaps that's normal as companies grow and become less centralized but it does represent a change (however imperceptible) from what made Google Google. Whether it ultimately has any effect on Google's bottom line, only time will tell.
The other factor to consider is what's out there to replace Google? What would motivate users and advertisers to go elsewhere? Either Google does something to drive them away or a new, game-changing technology is brought on-line (by someone that Google doesn't own or buy!) that revolutionizes the way we interact with the web...just as Google did 11 years ago.