turn by turn

Posted on October 31, 2009
Filed Under computing | 3 Comments

There can be no doubt now that Google truly are the smartest people in the room. Though unlike Enron, they use their smarts in a way that isn’t just predicting future markets, its making them.  What has separated them from just about every contemporary player is their incredibly astute understanding of the power of metaphor and the manner in which we use metaphors to arrange knowledge.  Google Earth, wasn’t just some clever trick to amuse us.  It was a ploy.  They were training us to use maps because they knew, that a map was the ultimate metaphor.  This was why Fairfax was so freaked out when Google wanted to put real estate listings on Google maps, because they realised that this was the perfect way to look for real estate.  Yet this straightforward derivation is nothing compared to what they have in store with Android and their most recent offering of a free GPS based turn by turn navigation device.  Now the world as we know it is close to being completely digitised with a continuous and seamless interface between the real and the binary.  And it will be Google that arranges it.  The following article, though a little dry, takes you through some of the issues and describes the genius behind the move…. from Above the crowd

I like to think of myself as an aficionado of business disruption. After all, as a venture capitalist it is imperative to understand ways in which a smaller private company can gain the upper hand on a large incumbent. One of the most successful ways to do this is to change the rules of the game in such a way that the incumbent would need to abandon or destroy its core business in order to lay chase to your strategy. This thinking, which was eloquently chronicled in Clay Christiansen’s The Innovator’s Delimma, is the key premise behind recently successful business movements like SAAS (Software as a Service), open source software, and the much-discussed Freemium Internet model.  And while each of these disruptions are impressive in their own right, when I read this week that Google was including free turn-by-turn navigation directions with each and every Android mobile OS, I had an immediate feeling that I was witnessing a disruptive play of a magnitude heretofore unseen. Google has long had an interest in maps. Early in its history, the company added “Maps” as one of the coveted tab alternatives offered at the top of the screen above its famed search box. At that time, Google did what many others did to enter the mapping business – they licensed data from the two duopolists that ruled the mapping business – Tele Atlas and NavTeq. Over the years, as these two companies gained more and more power, and larger and larger market capitalizations, Google’s ambitions were growing too. Google wanted to spread its maps across the web, and to allow others to build on top of its mapping API.  The duopolists, recognizing a fox in the henhouse, were apprehensive to allow such activity.

In the summer of 2007, excitement regarding the criticality of map data (specifically turn-by-turn navigation data) reached a fever pitch.  On July 23, 2007, TomTom, the leading portable GPS device maker, agreed to buy Tele Atlas for US$2.7 billion. Shortly thereafter, on October 1, Nokia agreed to buy NavTeq for a cool US$8.1 billion. Meanwhile Google was still evolving its strategy and no longer wanted to be limited by the terms of its two contracts. As such, they informed Tele Atlas and NavTeq that they wanted to modify their license terms to allow more liberty with respect to syndication and proliferation. NavTeq balked, and in September of 2008 Google quietly dropped NavTeq, moving to just one partner for its core mapping data. Tele Atlas eventually agreed to the term modifications, but perhaps they should have sensed something bigger at play.

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