Thinking about Android as a Moat
Android is very successful. But the odd thing is that Google has made no sign that it wishes to cash in on Android’s popularity. What is going on? Fred Wilson clued me in, linking to a post by Bill Gurley. Here is a link to Fred’s post and here is a link to Bill’s post.
Bill argues that Google doesn’t want to make money with Android. Instead, Google wants to prevent any other mobile OS from interfering with access to Google search. Android is a “moat” surrounding the Google money making machine - ad revenue from search. It makes sense. And it gives one a more clear view of the value of Google’s crown jewels.
But as Google gets deeper and deeper into mobile OS development issues, it also will build more and more competences. It will bump into surprising ideas that can be monetized. Android will spin off business opportunities. Google may not be so interested now, but at some point, the cash flow from search will start to sputter and Google is likely to start fishing in its own moat. It will be fun to see how this plays out.