Very interesting read on Tech Crunch by Ali Partovi on the search industry’s search for respectability in the late 1990s. In some ways, video is exactly where search was: big media companies are comfortable making a lot of money from both search and display (I wrote about this in my last Media Post article, comparing it to the innovator’s dilemma). Read this paragraph and replace search with video and it reads like a contemporary article:
In the days before Google, Yahoo was the dominant search company – they had the vast majority of all search query traffic and seemed completely invincible. The other top search drivers were Excite, Altavista, Netscape, MSN, and AOL. All, including Yahoo, were victims of what Graham calls “easy money.” Thanks to the dot-com bubble, it was so easy to make money selling banner ads (to VC-backed dot-com startups) that everybody was distracted from the real opportunity in search — even when it was presented to them plainly.
While the big guys were collectively ignoring search, a few startups were acutely aware of its strategic importance:
Anyway… where video is without a doubt very different from search is that even those who had initially invested about search stopped caring: Yahoo! let Google power its search, AltaVista became a portal, etc. In the video wars, it’s the opposite: everyone keeps investing money, regardless of whether they’re in Technology, Advertising, Distribution… meanwhile, overall, the one area that seems relatively under-invested appears to be Content. I touched on this in my article on Tech Crunch this past weekend on how you need to be #1 or #2 to compete in Technology, Advertising, Distribution - which is what we’re now seeing in search with Google and Microsoft.
Today, I would say video isn’t where search was in the late 1990s or even 2000-2001. With the industry generating over $1 billion in video ad sales last year and this year people expecting over 50% growth, I think we’re on the precipice of blowing up.
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