Here's the quickest possible summary of what Richard Skrenta argues in a recent blog post about Google's market power:
His essential insight seems unasailable to me:
To paraphrase an old comment about IBM, made during its 30 year dominance of the enterprise mainframe market, Google is not your competition, Google is the environment ... Google is the start page for the Internet ... The net isn't a directed graph. It's not a tree. It's a single point labeled G connected to 10 billion destination pages.
Now, not all of his conclusions are as certain, but I found the arguments mighty persuasive – basically, if you can't beat 'em, join 'em:
Online businesses which struggle against this new reality will pay opportunity costs both in online advertising revenue as well as product success.
Competitors such as Yahoo should quickly move to align themselves with this inevitability. Yahoo could add an extra $1.5B to their revenue overnight by conceding monetization to Google and becoming a distribution partner for Adwords, as Ask Jeeves did.
What does this mean for newspapers? As you know, five our our papers are now part of a beta test in which Google basically runs a bid/ask auction for print newspaper space. Early results, I am told, are positive.
What if Google was in charge of monetizing our online advertising?