Attack of the clones

Okay, I’m in – Microsoft and Yahoo should clone the Google API. And tear down the query limits. And pay people for the traffic they send to their applications. It’s just good business sense – if you want to kneecap the market leader, you have to reduce switching costs to zero.

Over the next few years, I expect more and more brawls over the cost of switching from one service to another. Market leaders will want to keep switching costs high through data exclusivity and control; market upstarts will try to bring switching costs down through open formats and APIs. Gulliver attacked by Lilliputians – and these days there’s a lot of Lilliputians. The smartest market leaders will be farsighted enough to become market makers – just like Google’s done with its AdWords program. Then the Lilliputians will be happy, and they’ll be able to stay Gullivers.