Ahhhhh! Save yourselves! Google is evil! We hear it time and time again; people erupting with concern over Google’s “evil” policies that play it fast and loose with our privacy. And who complains about Google and its evil policies more frequently and much louder than anyone else? Why, it’s Google’s competitors, of course.
Case in point: A new blog post published by one of Cyanogen’s investors on Monday.
For those unaware, Cyanogen is a company started by a bunch of Android hackers — that’s “hackers” in the good sense, not malicious hackers — who were out to offer users a more customizable version of Android. They succeeded, and then managed to turn their efforts into a business.
Now, that business has raised a new $80 million funding round.
Among the firms participating in this most recent round is Benchmark Capital, and partner Mitch Lasky commemorated the announcement with a blog post that explained why the world needs a separate version of Android that Google cannot control.
From Lasky’s post:
The Android juggernaut has a lot to do with Google’s innovative approach to licensing and their early commitment to open source. Open source distribution overcame the objections of the handset manufacturers and mobile operators who worried about OS lock-in, where Google might extract the highest-margin revenue from customers those operators and handset folks thought were theirs.
Android’s promise was that if a mobile operator felt threatened, they could compile their own non-Google Android from source, and run their own app store and cloud services. In practice, despite enormous investment by Samsung and others to offer alternative services, Android’s rise has been Google’s rise. Except, of course, in China, a market I’ll come back to discuss in a moment.
So why are we excited about the opportunity for a new, open Android operating system from Cyanogen? The answer has a lot to do with what is happening on top of the Android operating system: apps. Because, like Microsoft Windows and Apple OSX/iOS, Google both enables and competes with app developers who support its operating system, creating a fundamental tension in the market.
He goes on to explain that Google didn’t foresee the rise of apps, which detract from its own core services. Of course, the less people use Google services on Android devices, the less data Google collects and the less money it makes. As a result, Google is constantly tightening its grip on Android.
This is all well and good, but let’s not forget who this argument is coming from. Mitch Lasky is a venture capitalist. He works at one of several VCs that just invested $80 million into one of Google’s direct competitors. His job is to use other people’s money to make money, and he’s complaining about how Google makes money by giving services away for free and selling ads.
Putting that aside for a moment, this massive $80 million windfall wasn’t a donation to the Developers Against Evil fund, it was an investment. Cyanogen will eventually be under pressure to make money — lots of money — so that its investors see solid returns. It will be under pressure to grow its revenue and profit each quarter; this isn’t a free ride.
So, how is Cyanogen going to make all this money?
Long story short, if you want to buy into the hype and believe that Cyanogen is “the people’s OS” that will remain completely open and won’t eventually need to shift toward models that generate dollars from end users, good luck with that.
Every business needs to make money. This is true for everything from pizzerias and gadget retailers to insurance companies and banks. It’s also true for companies that make mobile platforms.
While Cyanogen might not use the same strategies as Google to make money (though there will eventually be some overlap, I promise), it will still need to make money, and the company’s original vision and user experience will be impacted as a result.