“Real Estate” is precious
Take Retail – The competitive advantage is in owning real estate
Take Transportation – The competitive advantage is in owning the Oil “Real Estate”
Take Web 1.0 – The competitive advantage was in Operating System “Real Estate”
Take SaaS and Web 2.0 – The competitive advantage is in Browser “Real Estate”.
Of course, hindsight 20/20 – we see that Google is entering into the “real estate” game in a big way.
Take a few things that people do normally online.
1. They search
2. They communicate
3. They share
4. They manage their businesses (they use tools)
In the web 1.0 world, the “real estate” needed to do these things was the operating system.
In the web 2.0 and SaaS world, the “real estate” required to build a big empire is the browser. The power is slowly being taken away from the operating system. Google’s move to stake a big claim makes a lot of sense (for Google, for sure)
More from Google’s Official Blog here.
This is a very nice lesson about extending the value chain one step at a time. Not just Google, every business can design and execute on this. Of course, not at this scale but the thinking has to be the same. For a brilliant explanation of the concept, please refer to Adrian Slywotzky’s work. Overview can be found in this book “How to Grow When Markets Don’t”
All the best!