JG etc.

I remember reading about Coke and Pepsi wanting to put ads in space and how they sort of did by sponsoring some space expeditions. I thought how sad it was that maybe one day we will look to the sky and see ads.

That got me thinking about Microsoft’s latest earning results and their new capex(capital expenditures) plans they have to compete with Google. A lot of people seem to be thinking all this money is being thrown against Google to build a better search engine. Well the new flash there is a search engine is a commodity. In fact, you can buy one on eBay as we speak, and I’m guessing it works great. Google is much bigger than a search engine, it is a global brand, in less than 10 years they have become one of the most recognizable brands in the world. So much for not messing with your logo.

With Microsoft’s announcement to increase capex and even Google saying there going to increase capex, this is not to make a better search algorithm. This is too build out the real OS, no not Windows Vista, but their WebOS. For Microsoft it is one, like Googles, that is filled with applications that not only play nicely with each other but also support all a user’s suite of tools, profiling information, and all the storage they could ever want. Our life is online, the PC is nothing more than a utililty to access the grid. All your life that you need online, could be stored locally, but it makes more sense that it’s stored on the Grid. I truly believe that, I think that Google and Sun have been thinking that, and as usual, Microsoft is just late to the party. Maybe if this was a few years ago, Microsoft concedes the desktop OS to the open source community and only concentrates on creating a WebOS. Only problem here is Microsoft has six channels of revenues, but only two are really profitable. Windows and Office(not the ‘Live’ products), and I’m sure that MSN and XBOX will turn a profit at some time. The problem with these hugely profitable channels and what Microsoft knows, is that they are, like their commercials showed, dinosaurs and commodities.

So getting back to my original point, ads in space. With all this capex being put out there by the big guys, where is the ROI? Er, that is where it gets kind of sad. Think of Google’s applications, when is the last time they gave you saw a new product that did what they say there mission is, organize the world’s information? What Google has given you is a better opportunity to put your life online, to be a part of the grid. And how is Google and now Microsoft going to get there money back to pay for this huge investment? Not software licenses, ads in space of course.

Think about what Google has in AdWords/AdSense, the largest media network in the world. Search revenue in the relative sense will continue to slow, but that doesn’t mean Google’s revenue will slow. What is the most popular business model among Web 2.0? Adsense! Google has ads for everything from a search engine to blogs to fu***** parked domains. Then start thinking about Google’s Pages project, Google Wifi, Google Earth, Google Print, etc. Google has one goal and that is too put an ad on every virtual space in the world, galaxy, universe? (talking interplanetary protocol here) How big is that business model? It is undefinable($^n), it is crazy, but so far it is working.

Google is like a modern day Lewis and Clark, they are just creating tools that allow others to travel and make “imprints” in space, much like L&C ventured west and discovered new territories, that allowed others to follow. I wonder if Lewis and Clark would have sold billboards throughout all the land that they were settling if they knew how much money they could have made….. Google sees the value in stamping virtual space, Miscrosoft has the money and people to build out an infrastructure; put Yahoo in this category as well.

Ballmer last week:

Only two to three companies can really deliver the infrastructure that’s required to keep pace with consumer demand and advertisers’ needs.

Ads in space is a much bigger deal than a bottle of coke on the side of a spaceship…….