“Google, enormously successful in online advertising, might be casting an envious eye toward the $150 billion-per-year pay television market. Such a venture has the potential to turn today’s business of television advertising and distribution upside down.”
“Google’s negotiations with content creators could also give Google TV an advantage it has never enjoyed before, where the biggest weakness of the company’s potentially groundbreaking TV service was the lack of cooperation of content creators."
This situation highlights a tension here for Google that can be seen through the lens of trust. In an article I wrote several years ago on the Economics of Trust, I said that Google has historically invested in trust on four dimensions:
- “Competence – e.g., hiring high-powered superstar engineers and retaining them through expensive perks
- Longevity – e.g., obtaining access to capital through an IPO in 2004 and amassing billions in cash reserves
- Scope – e.g., “It’s best to do one thing really, really well”
- Benevolence – e.g., committing one percent of Google’s equity and profits to address global issues such as clean energy, global health and information access”
“Sustaining a trust strategy is particularly challenging for companies seeking growth….Google’s stated mission, to organize the world’s information, was originally viewed as a high-flying pipe dream, but companies that are in the business of selling information are no longer smiling. Google’s future growth may well be tied to the willingness of partners to cut through the red tape in negotiations and join coalitions. It remains to be seen what will happen as the company’s size and scope threatens former allies.”
For potential partners, it’s a balancing act. Google is a very attractive partner in the short run. But in the long run, it could be game over, i.e. “Google won’t screw me over – that is, unless and until they screw me over completely.”
For some of those partners, however, there is no other viable alternative. It’s like chemotherapy – they hope they can survive the cure. And at least it buys them time.