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Why Google is the giving tree

By | November 11, 2009, 2:06 PM PST

Google is giving away a new programming language.

GO marries C, a compiled language programmers depend upon for PC applications, with Python, a dynamic offering commonly used to create Web pages.

It’s the best of both worlds, the company says, and comes to you from the same great minds who created Unix for Bell Labs “back in the day.”

It’s another great giveaway from the folks who give away your e-mail, a whole suite of applications, TV with clips of cats and squirrels, plus the best Internet search on the whole gosh darn planet.

What’s going on? Why is Google the giving tree?

It’s not because Google is planning on becoming a stump. In fact Google is not giving away any of its secret sauce. Not at all.

Google gives away software, tools and services because it is the low-cost provider of all these things. By several orders of magnitude.

Google used its early profits from search to build its own low-cost Internet.

  • Google owns its own fiber, thanks to purchases of dark fiber made at the dot-bomb’s bottom.
  • Google built server farms with low-cost PCs, separating the various functions of servers so they can be done more efficiently.
  • Google put solar panels on its buildings to lower its energy costs, a major factor in any Web host’s budget.
  • Google decentralized its operations so search results are found as close to the user as possible.
  • Google owns its own ad agency, and Web ad placement service, so it earns big profits on everyone else’s Web pages.

What’s the difference between paying .0001 cent for each online transaction or .000001 cent? It’s 100. When you can provide basic services for 100 times less than the competition, anything that increases demand for service plays to your advantage.

So Google pushed the Web’s move to video after its purchase of YouTube. Google offered use of its “cloud” to businesses so more business would move online. Google gives away tools to make it easier to innovate ever-neater resources, all free.

By growing demand for something that’s cheap for Google and expensive for rivals, Google does well for itself and does an enormous amount of good for everyone else.

Operations are Google’s secret sauce. It’s not software, not services, not its intellectual property. As Google grows while maintaining its cost advantage it creates a rising barrier to entry for everyone else who might choose to compete with it, in any area where it chooses to compete.

It’s not evil, unless you’re a competitor. It’s a true win-win between Google and the Internet community. Just remember this smart takeaway. For Google, the secret sauce is not in what you see, but in how it gets to you.

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Dana Blankenhorn

About Dana Blankenhorn

Dana Blankenhorn was a contributing editor for SmartPlanet from 2009 to 2010.

Dana Blankenhorn

Dana Blankenhorn

Contributing Editor, Technology

Dana Blankenhorn has written for the Chicago Tribune, Advertising Age's "NetMarketing" supplement and founded the Interactive Age Daily for CMP Media. He holds degrees from Rice and Northwestern universities. He is based in Atlanta.

Follow him on Twitter.

Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn has been a technology reporter since 1982, a business reporter since 1978, and a writer for as long as he can remember. His Schwab IRA has a few tech stocks in it, most notably some Intel and Applied Materials bought over 10 years ago. But the vast majority of his tiny fortune (emphasis on the word tiny) is invested in mutual funds. He presently writes for no one else but ZDNet, SmartPlanet and himself. But if you've got an opportunity let him know. If he takes the gig he"ll first add it to this disclosure page.

He writes for SmartPlanet and is not an employee of CBS.

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