Search Engines and Stephen Wolfram

Nowadays we all have experience of what a search engine is and how much useful it is. What is sometimes not that clear is the Strategy model they are based upon.

The main service they provide is the search for documents based on keywords. They all provide such a service, meaning Google, Yahoo, and the like, but with some differences.
Yahoo – when Google stepped in – was at its fullest, implementing the concept of “portal”, that is search for documents plus news, e-commerce, finance news, anything that could be brought at the attention of the user through this communication vehicle.
On converse, Google started offering a search engine that could be quicker and more reliable while providing results. What could really hit of Google was that the search engine home page was really bare and the first question “how do they make money out of it ?” could sound quite natural.
Then – after some time – something changed. The increase of speed and the greater accuracy of Google search results brought more advertising in, users started to know that advertising on Google could work better and took advantage of it. Advertising brought at the Google management attention that the more the content is present in Google – emails, blogs (like this one), Earth maps, even documents written directly through a software as a service model given by Google for free and the more effective the advertising could be (and the higher the revenue could be as well).
So, if it is still true that a bare home page is what we get typing www.google.com, it is also true that a universe of services built by Google itself or acquired through merge and acquisition actions – like YouTube – with the main purpose to bring always more content in – and then feed ads investment – are now available to users.
The Strategy pursued by Google is then simply this: feed the contents, search for contents, ads on contents.
Any of these three key processes sustain/fit with each other, implementing one of the cornerstones of Competitive Strategy. Looking at it we might also think that if operational effectiveness should be already in place, then the barrier for possible newcomers could become higher and higher as the time goes by…

So what Stephen Wolfram has to do with this?
Stephen Wolfram is a scientist – someone who got the PhD in theoretical physics at the Caltech at the age of 20 – and has contributed so far with many publications, many important results and – as an entrepreneur – being the founder and CEO of Wolfram Research, developing the software platform Mathematica.
This month Stephen Wolfram is going to launch the WolframAlpha.com computational knowledge engine.
The terms “computational knowledge” puts in evidence Wolfram’s scientific background so that – practically – the questions “what is it about?” and yet “how does he make money out of it” again come up quite naturally.
Apparently, it is another bare page which enables the search for documents but – as we can understand from outside – with two important differences:

1. Searches are made in English natural language, not just typing keywords
2. Answers are not lists of documents but a structured solution to the question posed by the user

I haven’t seen it in action so far, but the consequences of such a service may be easily spotted: the more final users will get accustomed to receive human like answers – supported by content, graphs and the like – the more the content will be provided by those who want to advertise their own interests in a way they could emerge as the preferred answer (or part of it). One thing is to get easy ads that may – or may not – get your attention, another is to get a “solution” where the ads are not just a possibility but the answer.
This kind of service will not just take advantage of content already available through other search engines, but will definitely be feeded by a “new kind of content” – more presentable and structured – and this new Company, as the critical mass gets reached, will design new ways to self sustain the service interest.
The Strategy pursued by WolframAlpha will probably be this (a variant of Google’s): search for any content, assemble the solution, ads on solutions and feed the solutions.
This sort of dynamic Wikipedia is going to change the rules of the game and this is always the worst possible risk within the Market arena when playing the Game of Competition.
Whenever Wolfram should make this Company public, just keep an eye on it…

Theoretical Strategies

In the previous article, the term Strategy has been defined – and refined – three times. Let's now see how we can make an effective use of it. The first definition, pretty academic and clearly referred to Porter’s classical statement has been followed by two concrete definitions, which underlie a methodology while facing with Strategy analysis:

Strategy = Strategy Design and Analysis + Strategy Implementation (a.k.a. Business Plan)
&
Strategy = Strategy Map + Business Plan

The development of a Business Plan is an activity which requires – on average – a huge effort and is substantially the financial proof that a Strategy might work. Without this insight, the Strategy Design and Analysis – possibly through a Strategy Map – may be considered as a Theoretical Strategy.

Are Theoretical Strategies useful ?
But in this case, which is the usefulness of defining a Strategy without any Business Plan? The answer to this question is quite profound and might be summarized in the following two rules:

1. If a Theoretical Strategy works, then the Strategy obtained adding the Business Plan might work
2. If a Theoretical Strategy does not work, then the Strategy designed along with the associated Business Plan will not work

The feasibility of a Theoretical Strategy is a necessary but not sufficient condition to have a Strategy really work.
Therefore these two statements make a Theoretical Strategy an interesting and useful tool, since it allows to provide an insight for any possible Company acting within a Market, foretelling whether the Company is inherently destined to fail or has good chances to play its game and succeed.
It also allows to define Theoretical Strategies that might be adopted within a specific industry depending on how far the various Companies – that are part of the examined industry – are from the designed Strategy.
A Theoretical Strategy is not a best practice: best practices bring different Companies to behave similarly while the objective pursued by designing and adopting a Strategy consists on being different by competitors.

The “best practice” approach has been the Trojan Horse used by Consulting Companies for a couple of decades, claiming that a best practice may reduce risks: unfortunately this brings all Companies in a vertical Market to converge on the same arena, competing with the same offering in the same way. As a clear example you may have a look at the way Telco Companies are substantially interchangeable…