Today Google announced its acquisition of cloud-based photo editing site Picnik. Supposedly one of the fastest growing photo sites on the web, Picnik's powerful editing software is currently the default editor for the massive Flickr image repository. But this is likely to change as Google folds the technology into its own competing photo sharing product, Picasa. Makes sense. Except some may look at the acquisition and wonder why Google is competing in the photo space at all? After all, 97% of its revenues come from search. One good reason comes to mind: for all its competitive advantages, Google always has to worry about about customer captivity. In search, defection (and ad dollars) are always just one click away. By increasingly tying customers into their integrated product suite through adjacent offerings such as Gmail and Picasa, they hope to raise switching costs. Furthermore, these adjacent offerings are also invaluable sources of personal user information - and as the idea of social search becomes a reality that could make Facebook a real competitor in the search arena, this information could be critical to Google's ongoing success.
F. Patrick Busse
Marketing & the Internet
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