As Google has grown into the Goliath of Search, it has had an unerring knack for making right choices, from its initial simple and uncluttered web page design to its perfecting of the pay-for-ranking paid keyword model. While some of its initiatives have failed to gain tremendous traction (Gmail, for example), nothing could be said to be truly wrong-headed. Until now.
Google's move to charge for access to its API (application program interface) may well be a strategic mistake that opens an opportunity for its competitors. There is much speculation in the search community as to why Google has taken this step. An obvious reason is to bolster revenue. But Google is wildly profitable, and while, as a publicly traded company, there is pressure to show revenue growth that supports the sky high stock price, Google has always gone its own way in regard to Wall Street. Indeed, its "Dutch Auction" IPO flew in the face of Wall Street orthodoxy. Another stated reason is to reduce stress on the system. But surely Google has the resources to shore up the system and accommodate the frequency of calls against the API. There is also suspicion, particularly among tool vendors, that Google would be quite happy with a world in which advertisers and agencies used Google tools rather than those of third parties.
The API controversy comes at a time when Google, for perhaps the first time, is getting bad press. There has been a spate of articles that portrays the company as unchecked, voracious and on the verge of devouring whole sectors of the advertising business. How has Google, a company that once had a "little engine that could" quality that engendered affection from the media, morphed into a company that for many, despite its famed "don't be evil" motto, has replaced Microsoft as the metaphorically dreaded "evil empire? Mostly by pursuing a vision that puts it into inevitable conflict with vested interests from libraries and book publishers to ad reps and newspapers.
Claiming to be the "King of All Media" was just shtick for Howard Stern, but it seems to be part of the mission statement for Google. Its plans to be the clearing house for all the world's information puts it on a collision course with many vested interests. The current Google media backlash is what happens when not just large companies, but whole industries, perceive their oxen as about to be gored. There was once an adage in Washington D.C. that it was unwise for a politician to get into a fight with a newspaper because you "can never win a fight with a fella who buys printer's ink by the carload." While ultimately printer's ink may be supplanted by bits and bytes, in the near term the newspapers and publishers who feel most threatened by Google have considerable media throw weight to hurl at the search giant.
Meanwhile, the API issue has roiled the search world. Why, you may ask, shouldn't Google charge for pinging the API? Well, up to now, unlimited access to Google's API has been a great engine of growth for Google. After all, an open API encourages third parties to develop applications that do nothing but create new Google users and opportunities for Google to make money that they might have never thought of themselves. This "viral" use of the API has worked well for companies like eBay and Amazon. High traffic, after all, is a good thing (at least from a marketing perspective). Of course, the core DNA at Google is engineering and not marketing. And, no doubt, unlimited access to the API instills fear in the hearts of engineers who worry more about system performance than the good will of third parties.
In MIT's Technology Review, Charles Ferguson well articulated the intellectual underpinnings of the open API. He called it, "the New Age Theory," which runs as follows: "With the internet, we have entered a new and better era, one in which openness will triumph over narrow, proprietary self-interest. Because the internet is a vast commons, the greatest fortunes will be made by those who are most open."
Capping access to the API and instituting charges for heavy use may well be The Search Goliath's first stumble. It provides an avenue of opportunity for Yahoo! and Microsoft to trump Google in this area by offering more liberal access to their search APIs. And Bill Gates, for one, is not a competitor that one would want to offer an exposed flank. Just ask Netscape, Digital Research and other once impregnable (former) Microsoft competitors.
As noted, Google's famed motto is "Don't be evil". But surely, another prime directive for any company is "Don't be foolish." By limiting free access to the API, Google just might be violating the latter edict and providing running room for its competitors. For once, Goliath might have stumbled.
Bob Heyman is chief search officer at Mediasmith, Inc., and is the co-author of Net Results.2 (New Riders) and the Auction App (McGraw-Hill). He co-founded Cyberanutics (acquired by USWeb in 1997) where he is credited with pioneering Search Engine Optimization (SEO) and Search Engine Marketing (SEM). Heyman was also co-founder of CybeReps (acquired by Interep).
Mediasmith is a full service advertising media agency headquartered in San Francisco, California.