My good friend ‘Bill’ at Nabble turned me on to Al and Laura Ries’ latest book, The Origin of Brands. The book cleverly uses Darwin’s famous treatise on evolution (The Origin of the Species) as the basis for discussing the evolution and divergence of brands.

The concept of divergence – the idea that a product category diverges into many different and new categories – is key to the book’s thesis. Take, for example, cars. In the beginning, there were Model Ts and nothing else. Today, we have SUVs, stationwagons, minivans, convertibles, luxury cars, sports cars, trucks, hybrids, and so on. What’s more, as a single category diverges into multiple new categories, it becomes difficult if not impossible for the market leader in the first category to continue to be the market leader in the multitude of new categories.

For example, Ford was the clear #1 car manufacturer at the time of the Model T. Today, however, different brands hold the lead in different categories – Minivans (Chrysler), Luxury (Mercedes Benz), Sports Cars (Porsche), Hybrids (Toyota), and so on down the line. Actually, I’m not sure what Ford does lead in these days, other than trucks (Ford F150) and perhaps economy sedans.

The problem many top brands encounter is a sense of hubris about the power of their brand, and how that brand can easily transition into diverging categories. This problem exists because people tend to associate a brand with a category. For example – when you think of tissue paper, you think of Kleenex. If Kleenex went into, say, paper towels – a logical extension from the company’s perspective – would they be successful? Probably not, simply because people can’t imagine a Kleenex paper towel being strong enough to clean up tough messes (similarly, Brawny would be ill-advised to start a line of tissue paper).

In some ways, being the market leader in a category can be more of a curse than a blessing. If consumers perceive your brand as the market leader in Product X, and Product X suddenly becomes replaced by Product Y, you are in trouble. Thus, AT&T is known as the leading landline phone company – trying to transition the AT&T brand to cell phones (or Internet, or cable, or whatever) will be difficult, simply because a lot of consumers won’t want to buy their cutting-edge cell phone from good ole’ Ma Bell.

So this brings us to the three biggest search engines – Google, Yahoo, and MSN. If you had to put each of these search engines into a category, what would it be? Here’s how I’d do it: Google is #1 at search, Yahoo is the #1 portal, and MSN isn’t #1 at anything.

What does being #1 mean? For Google, it means that it will be very difficult for any competitor to ever replace Google as the search engine. Yahoo and MSN can hire the best and brightest search engineers, but consumers will still think ‘Google’ when they need to do an Internet search. Similarly, Yahoo will always be the portal – the one-stop shop for everything from travel, finance, sports, news, and email. No doubt that Google and MSN will continue to chip away at Yahoo’s properties, but Yahoo will still be #1.

Then there’s MSN. MSN is the Kmart of search engines. Kmart is used in The Origin of Brands as an example of a company in the “muddled middle” – not particularly well-known for any one thing. When you think Walmart, you think “low prices.” When you think Target, you think “hip and fun shopping.” When you think Kmart, you think “low quality.”

Both Kmart and MSN have spent hundreds of millions of dollars trying to rebrand themselves – new color schemes, massive TV campaigns, re-orgs, and so on. At the end of the day, though, if you can’t create a category you can be #1 in, you are in trouble. I’m not saying that MSN is going to disappear (like Kmart actually will someday), but they need to be realistic about the growth of their business.

Google, on the other hand, needs to accept what it is and isn’t good at – or from a branding perspective, where they should and shouldn’t extend their brand. John Battelle has a great quote on his blog today from Rishad Tobaccowala about Google: “I think Google has overextended, like Napoleon opening a Russian front. I think they are a very amazing company that will take over nothing.”

Google is good at search – they’re good at it from a technical perspective and also from a financial perspective. They’ve done a very good job of extending this search technology into search-related products, like Google Desktop and Google News. Google’s forays into a myriad of other ideas, however, has been hit or miss. Consider Google Base, the ‘eBay killer.’ Will Google Base ever be considered “the marketplace to buy and sell your stuff” like eBay currently is? Of course not. For that matter, GTalk won’t replace Skype, and GBuy won’t replace PayPal.

By launching these non-search products – and not launching them particularly well – Google is rapidly diluting it’s brand. And in branding, you can’t be all things to all people – you end up like Kmart, no things to no people.

Similarly, Yahoo is never going to be the default search engine of choice for the masses. Sure, Yahoo should continue to develop search algorithms and interesting search applications. But should Yahoo spend millions of dollars branding their search engine as “the life engine”? No way.

And finally, what about poor MSN? Well, MSN can’t brand itself as a search engine (Google), a portal (Yahoo), or a marketplace (eBay). MSN is simply going to have to invent a new category – what that will be, I have no idea.

1 Comment

  1. Jay March 2nd, 2006

    So how did a lawyer get to be such a good marketer…especially one that isn’t currently practicing as an abulance chaser?

    One of your best posts imo.–>

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David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including Rentals.com (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.