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Google needs to start rewarding its customers

WHY is Google winning? And what does it tell us about the future?A fortnight ago, Rupert Murdoch told Australian Sky that he would stop Google from indexing all of his content, preventing it from becoming a one-stop aggregator. <br /><br />Murdoch has been saying for a while that he wants to stop his newspapers haemorrhaging cash by charging for online content. He is right to wage the paid content battle &ndash; but there is a bigger battleground. <br /><br />Today everything in business is structured around networks. Everything which was linear is now network-oriented, and the winners are those companies who can align the economics with the ecosystem. That can be a start-up or an established player with vision.<br /><br />Google&rsquo;s innovation was its business model &ndash; not its search technology. Alta Vista was the better search engine, and Yahoo the more dominant one, but Google developed the business model that home-grown Espotting had pioneered.&nbsp;&nbsp;&nbsp;&nbsp; <br /><br />That twist of fate gave it a clever ruse to be in control without looking in control, to establish massive network effects not by organising the world&rsquo;s information, as it claims, but by organising the economics of the world&rsquo;s information.<br /><br />That&rsquo;s why Google is winning. <br /><br />However, it is vulnerable in one very important area. It says it is helping consumers. But the consumer has been boondoggled into feeling good because someone else &ndash; Google &ndash; is allowing them to search the web for free. <br /><br />But nothing is ultimately free. The way you pay might be hidden &ndash; but that just delays the payday.<br /><br />When the consumer wakes up and realises the value of the personal information they give away in the process of browsing and searching the internet, then Google could find itself in trouble.<br /><br />Consumers &ndash; like every other kind of content creator &ndash; will want a cut of the value of their personal information, and will shift to a new search engine that offers them one. <br /><br />Obongo was the first start-up to try to help the consumer, and it was sold to TimeWarner in 2000. Jellyfish, eventually acquired by Microsoft, and Phorm, a contextual search engine, failed.&nbsp; But there are always failures before a breakthrough. Eventually, an entrepreneur will find the answer by design, stumbling or theft.<br /><br />Currently, it&rsquo;s laughable to think of Google being defeated, but it does have an Achilles heel. If it doesn&rsquo;t include the consumer in its business plan, by giving them a cut of the value created by their personal information, then someone will. And that new party will rise to dominance. Every traditional media firm out there &ndash; including Rupert Murdoch&rsquo;s News Corp &ndash; could play that role and befriend the consumer. But few understand how to do so.&nbsp; <br /><br />Julie Meyer is chief executive of Ariadne Capital