May 22 2008 / by Alvis
Category: Business & Work Year: 2008 Month: May Rating: 4 Hot
Google lost
nearly 5% of its market value yesterday when Microsoft
announced that it will begin offering rebates to consumers who use
its Live Search
to discover and purchase products. The action marks the beginning
of a new phase in the online battle for our attention which will
gradually return more and more value to the user. 
It is significant and a bit surprising that Microsoft, a company
known for squeezing every last bit of value out of its dominant
position in operating systems, and not Google (which is using a
very similar tactic vs. Wikipedia by creating a competitor,
Knol, that returns ad
revenue to contributors)is leading the charge to return capital to
its users. Though I’m sure Google has similar options readily
available (having so much familiarity with revenue splitting via
its AdSense program and development
of Knol) this goes to show the company is confident in its ongoing
development of search and content to react to Microsoft’s moves and
let the market do the talking.
The Main Takeaway: As the value of human attention
allocation continues to rise and more competition essentially
commoditizes current web applications, we can expect that companies
will be forced to either 1) return value directly through revenue
share, 2) return value through a superior product and/or network,or
3) a combination of 1 and 2. We should expect these trends to
transform our web experience over the coming years as search
companies (Google, Microsoft, Yahoo, Fledglings), Semantic Web
Companies (Twine, Adaptive Blue), social media
(Digg, Reddit, Stumble Upon),
social networks (Facebook, MySpace, LinkedIn), prediction markets
(Predictify,
InTrade,
ZiiTrend),
social web browsers (Medium, Flock), etc. all try to garner human
participation.
Microsoft being forced into the value-added game is a strong
indication that the rise in value of attention allocation is quite
real.
Update: Some thorough and spot-on analysis of the
situation by Michael Arrington
here.
Comment Thread ()
