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Noting some of the limitations of Microsoft's browser, Google set out to create its own browser that would not only outperform Internet Explorer but would also favor its own search engine (Martellaro). Google is in the process of expanding the Chrome brand into Chrome OS, an operating system designed to compete with Microsoft Windows but tailored towards the niche market of netbooks.
The most recent phase of Google's "moat" strategy is Google+, the company's new social media platform. Its direct competition is Facebook, a company whose product does not directly affect Google's search engine market but whose monopolistic hold on the social media sphere potentially cuts off Google from marketing and expansion opportunities. Google+ has a search engine-related feature that allows users to search shared content. It has been tremendously successful since its launch in June of this year; in the past five weeks, it has acquired over 10 million users and added $20 billion to Google's market value (Schonfeld).
Venture capitalist and business analyst Bill Gurley points out that most of these new initiatives from Google are not "products" themselves insofar as their primary purpose is not to make money for the company directly. They are free to consumers, and because they are mostly software-based, they require little labor and overhead beyond the development stage. Their main purpose is to lead consumers to the Google search engine, whose...
The strategy, Gurley claims, is to use these "very expensive and very aggressive "moats" to claim and control any barrier that lies between them and their consumers.
While the rapid expansion of Google into other technologies appears on the surface to be an aggressive and somewhat risky growth strategy, it is actually a keenly developed defensive strategy designed to protect Google's cash cow, its search engine and the advertisers to use it, from its most dangerous competitor, Microsoft, and -- more importantly -- the unknown competitors that inevitably lie on the horizon. So far, it seems to be working exactly as designed.
References
"Frequently Asked Questions." Google Investor Relations. Google. 30 July 2011. Web.
"Google Stock Quote." NASDAQ. NASDAQ.com. 30 July 2011. Web.
Gurley, Bill. "The Freight Train That Is Android." Above the Crowd. 30 July 2011. Web.
Martellaro, John. "Eric Schmidt Explains Google's Chrome Strategy." Mac Observer. 30 July 2011. Web.
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