Don’t mess with Google (GOOG). No seriously, don’t do it. Since the company’s inception in 1998 they have seen and conquered many who have stood before them. Google wasn’t the first to enter the search engine game, but today they are the only ones worth talking about. Sure, Microsoft does have Bing but the only time that actually ever gets used is in product placement advertisements on 2nd-tier crime drama TV shows. In fact, the first unlimited bandwidth service engine AltaVista and the once popular Yahoo Search both got a 4 year head start before Google even launched. But over time, just like every other web, software, and data industry Google has destroyed, the tech giant eclipsed both of them.
In addition to the smaller search engines its flagship service has destroyed other victims of Google’s rise include MapQuest, which lost its dominance to Google Maps, HotMail, which has fallen out of favor for GMail and BlackBerry (BBRY) smartphone operating systems, which have largely been replaced by Google’s Android OS and Apple’s (AAPL)iOS. While Google has been tremendously successful in capturing data, selling targeted advertisements, and generally dominating the web they have had a few mishaps along the way. Most notably, Google acquired Motorola for $12.5 billion back in 2011 then sold the handset business to Chinese cell phone producer Leonova in January for less than $3 billion. But that’s not to say the deal was a complete wash, Google did get to keep the majority of Motorola’s patents which help to support the Android operating system.
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Next In Line
In Google’s latest cutthroat move they are targeting cloud data storage companies DropBox and Box ahead of what promised to be 2 of the hottest IPOs of the year. In a particularly ruthless move, Google slashed its Google Drive data storage prices last week. Google Drive now offers up to 15GB of cloud data storage for free. Those in need of additional storage can purchase 100GB for $1.99 per month or up to 10TB+ starting at $99.00 per month. For comparison, DropBox only offers 2GB per month for free and a 100GB monthly plan costs $9.99, 5 times as much as Google charges. Box has slightly more competitive pricing, they offer up to 10GB for free and they charge $5.00 for a 100GB monthly plan. The biggest problem for DropBox and Box is that right now cloud data storage is largely a commodity and it’s difficult for these smaller companies to compete with Google at scale. Sorry guys, Google sends their regards. Until other cloud data storage companies can find a way to differentiate their products in a meaningful way there’s really no sense in anyone paying for the smaller guys’ services when Google offers the same thing at a lower price.
How to do you think the price cut will affect Google’s revenue? Will the price cut generate additional business and possibly increase Google’s revenue or is Google just making a power play to keep DropBox and Box down by preventing them from generating the cash they need to compete on a larger scale.
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