By being what the Web was supposed to be, the Olympics show us why Google, Yahoo! and others are losing.
NEW YORK (MainStreet) -- The Olympics are supposed to show the world how to be the best. This time it showed the Web how to be its best.
If you think about it, the Olympics are what the Web was supposed to be: a near-magical reweaving of otherwise meaningless rituals and ideas into a thing of unequaled value. Forget about high-end opening ceremony tickets that London paper The Telegraph says ran 4,500 pounds each. Or the intense -- and utterly fair -- debate about whether hosting the games helps or harms host cities.
The cold hard cash this event throws off is staggering in comparison with digital brands.
A five-ring value engine
Just take a look at Page 6 of the International Olympic Committee's Marketing Fact File report. For this year, the IOC claimed $3.9 billion in broadcast revenue and about $1 billion in so-called international marketing sponsorship dollars. Let's conservatively estimate another $2 billion in domestic sponsorships, tickets sales and other dollars. We don't know those figures yet, but those are in line with previous Olympics. That grosses up to a cool, round-number $7 billion or so of inbound cash.
Besides being roughly $2 billion more than what Facebook(:FB) and Twitter make in a year -- combined -- the Olympics creates this avalanche of value in just two weeks! That's eight times what search engine giant Google(:GOOG) takes in during the same period.
Therefore it is no accident that the basic lawlessness and disorder of online digital brands such as Google are carefully controlled. There are strict rules about what content can and cannot be distributed. And to my eye, the digital Olympics Village is strictly off-limits to the otherwise ubiquitous Google. Yes, Google-owned YouTube "powers" the software used by NBCOlympics.com to stream video. And it is easy to think that viewers choosing from hundreds of events featuring thousands of athletes would need the virtual handholding of a search brand.
But remarkably, the brand "Google" is locked out of the Olympics.
Why? You don't need it. Finding my virtual seat at these games turned out to be a snap. To get my beloved sailing feeds, all I needed to do was use my Optimum cable-TV identity to prove I was a paying customer, go to the list of online videos and scan through basketball, boxing and equestrian events to find the sailing page. Then I watched all day long. And came back daily for two weeks.
No gold for Google
The thing is, the more I lived without Google at the games, the more I realized I could live without Google not at the games. Sure, from time to time there are things for which I needed Google, Yahoo!(:YHOO) or DuckDuckGo. But we all have our news feeds, sports feeds and trusted brands for shopping. And who needs help finding Wikipedia?
And I'm not the only one noticing Google is not as critical as it once was. Operating and net margins have been falling for several quarters. And the company is beginning to whisper that it cannot win on all fronts like it did back in the day. In a blog post called Giving you a better Google, managers said they were cutting back on about 50 products.
"To make a difference," the post said, "we need to carefully consider what to focus on, and make hard decisions about what we won't pursue,"
Compare such sobering words to the nothing-but-winning Olympics. Rugby and golf will be added to the 2016 games. Tiger Woods playing for gold will do nothing but turbo-charge that tired sport. And the list of organized leagues that can gain from some five-ring love is staggering: karate, sport climbing and, most tantalizing of all, auto racing.
Think what General Motors(:GM) would pay to be part of a gold medal won in a Chevy Malibu.
The Web is a game for losers
What the flame of the London 2012 Olympics illuminates for us is there is not much business sport in the basic organs of the Web. The secret to turning lots of small things into a big digital thing is just this simple -- and difficult: Invest in one-of-kind of content, strictly limit who has access to it, present it in a clear and organized way and market the heck out of it to get everyone to pay for it. Then stand back and let reality do the work.
Hoping to cut a corner on this process is a race for fools where nobody gets gold.