How Google Can Eat Amazon’s Lunch

I can’t believe I’m going to do this, but I’m going to do it.

Yesterday, Dave Winer ranted about how blogs have become an ecosystem of recycled conversations about an original thought that happened long ago. Even so, I am going to talk about a post that Dave Winer wrote this weekend.

No, not that post, the one about the pig in Walnut Creek. Winer stops at a traffic light and a pig tells him (I know, that part makes no sense to me either — if you get it, please fill me in) that Google is going to move into the kinds of web services on which Amazon built its amazing turnaround. Only for free.

Maybe this talking pig thing is some uncharted territory in deep backgrounding, or maybe it’s a very useful hallucination. Either way, Winer is really onto something. And if Google wants to secure its dominance of all things Internet, even in the face of flat clickthrough rates or a brain drain, it had better find that pig — fast.

The real juice of the idea isn’t in the post itself, but in something that Winer went in and wrote in the comments.

“Google until they came up with their text ads had no business model other than VC, and they managed to take over an industry with that approach. I don’t see why Amazon charges me for my use of AWS… I’d use their services for new things if there was no cost to it. I think perhaps that’s what Google is thinking, acquisitions. How much would it be worth it to them to buy companies without having to transition their technology to their cloud? I think if that’s how they’re thinking they’re smart to approach it that way. “

When I read that, my mind flashed back to an interview I conducted last year with an executive at Amazon’s web services. In the interview I speculated aloud that what Amazon was doing was a lot like what corporate VC arms like Intel Capital do — invest in startups with which they will work — or buy — later on. Only instead of using hard cash, they were using infrastructure. Very shrewd, I said.

The executive’s response was that Amazon was not doing that at all, and that it would never do that with web services. I thought but didn’t say: Well, if you don’t do it someone else will.

Now some pig is saying that Google is doing it. As valued Google workers pack up their desks and launch new startups, this is the single best strategy for Google to bring them back into the fold. And it’s a great way to pull the rug out from under Amazon, strategy-wise and profit-wise.

While not exactly an original thought, it may be something for blog superdelegates to chew on.