Google Video

With all the talk of Google taking on Microsoft, what may be overlooked is a slew of other companies who will lose large amounts of share to the company best known for sifting through the world’s information and categorizing it. For example the Wall Street Journal reported the company will allow users of its video search service to also download videos for a fee.

So while the media is transfixed on the looming fight between Google and Microsoft, the search leader turned left and took on Apple. Perhaps the media should be focusing more on the reality of the situation which is obviously Google vs. virtually everyone else.

This sentiment was echoed by Bill Gates as CNBC reported this morning that Gates thinks IBM is a much bigger competitor to Microsoft than Google. So it seems that even though Google and Microsoft will butt heads, Microsoft thinks (or wants us to think) that these two technology giants won’t compete head-on too often.

Google’s quest for new business models is supported by the massive number of Google users who will try just about anything the company comes up. It seems no one is safe, especially not Blockbuster or Netflix.

This video announcement which has been rumored for months also foreshadows a tooth and nail battle with cable companies and ILECs. If Google thought it was tough to compete with Microsoft, wait till they try to send video over lines owned by new and very fierce competitors. We are talking about a set of companies that have learned how to deal with politicians and the regulatory system with such aplomb that they will likely get the 2-tiered Internet they desire.

This dual-tier system is already being proposed and debated by the LECs and policy makers and it basically will mean you won’t be able to access enhanced services such as video from anyone other than the company providing you bandwidth. Want something beyond basic Internet applications like chat and web surfing? If so you will need to step up to a higher tier of service that will cost more. By the time you factor in the cost of getting Google Video you may as well stay with your broadband provider.

Of course that is how it may work in the US. There is no indication that this sort of system will become commonplace around the world.

In order to compete in this brave new world of video, Google will have to become a legal and lobbying force.

Google Pack

The company will also be bundling a slew of software and services known as Google Pack. The offerings in the bundle are basically everything that competes successfully with Microsoft… The Firefox browser, a version of Norton AntiVirus software from Symantec Corp., Adobe Systems Inc.’s Reader software, RealNetworks Inc.’s RealPlayer multimedia software, Trillian instant-messaging software from Cerulean Studios and Lavasoft AB’s Ad-Aware antispyware software. Google Pack will also include Google’s own desktop search software, Google Earth satellite imaging and maps software, Picasa photo-management software, Google Talk instant-messaging program, its Toolbar add-on for Web browsers and screen saver software.

This software suite makes it easier for users to get all of Google’s offering in one package and could come pre-installed on some computers. At the very least it will reduce the need for users to have to deal with disparate downloads.

Conclusion

Wall Street has complained repeatedly that virtually all Google revenue comes from search. Google Video could become the service that starts to diversify their earnings. For this reason Wall Street will be watching this announcement and potential success, very closely. Google has been a one-trick pony and needs to diversify rapidly to squelch the critics.

This new business model may be the toughest business the company has entered and Google may be in for the fight of its life. If the two-tier Internet system continues to gain traction, we can expect much public dialogue about whether broadband providers have the right to charge more for access to certain types of content. Perhaps the American consumer should be happiest today as now that Google wants to provide a competitive video service they are forced to fight alongside the average Joe meaning for an open and free Internet with no restrictions by broadband providers.