Beware the horse buggy carriage owners’ view on innovation: Why the FTC should approve the Google – Admob deal

ford edison firestone.jpg

Here is a question:

Supposing in the early 1900s (when Henry Ford and others created the automobile industry), you went to the horse buggy carriage owners and asked them their views on ‘innovation’

What would they say?

Better fodder for their horses(will make the horse run faster and would get their customers to their destination quicker); Better carriages; even more humane treatment for the horses ..

BUT .. what would they NOT say? More automobiles ..

Why not?

Because that innovation(automobiles) is outside their field of reference and indeed a very threat to their existence.

Fast forward a century later ..

The Googles and the Apples of the world are the real innovators.

Yet, the mindset of the horse buggy owners prevails ..

The telecoms industry is full of vendors and consultants who are geared towards maintaining the status quo at the expense of the customer and of innovation. When viewed in this perspective, as many analysts have pointed out – the Google – Admob deal is good for the industry since the presence of a strong second player(Apple) demonstrates the vibrancy of the industry.

Mobile advertising is a nascent industry and there are plenty of mobile networks to go around and as moconews says Despite Google and Apple throwing millions of dollars at the market, this year eMarketer estimates that mobile advertising revenues in the U.S. will not even come close to breaking $1 billion. For this market to finally take off, it needs leadership, and enough scale to spur confidence in the advertising and publishing industries.

There are many players like Millennial Media, Greystripe and Jumptap and even relatively smaller / non USA player like Opera have acquired an ad network

So, competition exists

I agree with Ryan Radia of Forbes

The case against Google is a prime example of this fallacy in action. We know consumers have benefited tremendously from Google’s innovations in search and other digital markets, yet these benefits come largely in the form of qualitatively superior products, rather than incremental price reductions. Antitrust proceedings simply cannot gauge the impact of these innovations on consumer welfare. Government intervention would harm the very consumer interests the FTC is supposed to protect.

And the most important thing is – let us not forget the spirit of the pioneers, the entrepreneurs, the capitalists and the disruptors like Henry Ford.

Let us accept innovation from outside the traditional domains and recognize that these players are the foundation of new industries and wealth.

Blocking the Google – Admob deal will be a victory for the horse buggy types ..at the expense of the consumer and innovation ..

Image: Henry Ford, Thomas Edison and Harvey Firestone from the wikipedia entry for henry ford

Disclaimer: I have no commercial relationships with either Google or Admob. However, with a blog like OpenGardens, I am intellectually biased towards Open systems and benefits to the customer