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So here's a bit of compulsive behavior from me — coming out of the baby zone to post. I read this piece tonight on Om Malik's blog and thought it was a very interesting and bold set of predictions about Google's strategy and future.

Ultimately, it makes a set of assumptions about the company's planning and execution that I think are incorrect. But it's a really provocative set of ideas.

The most relevant idea for purposes of this blog and TKG's coverage is the "price deflator" concept and the way in which the Internet (though the piece is specifically about Google) is exerting downward pressure on all traditional business/media/publishing models. (The most obvious example is newspaper classifieds.)

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  1. Malik discusses a counterintuitive nature of Google's success, Google's uncanny ability to pursue profit in ways which seem to "swim against the tide". As Google seeks to continue such pursuits, its ad pricing models are undoubtedly designed to support ad price inflation. (A Search Engine Watch Forums thread on Adwords Smart Keyword Evaluation tool suggests Google is setting significantly higher minimum bids for advertisers seeking to enable disabled keywords.) How sustainable are Internet auction based models, with increasing minimum bid requirements, against the backdrop of decreasing rates elsewhere?

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