Google just announced that they are actively testing a car that can drive itself. The New York Times has a few more details. So far, their automated Prius has logged over 140,000 with only minor human intervention. The last 1,000 miles have been 100% human action free. The only collision experienced was when someone else rear ended them at a red light.
So what does this mean for you and me? It means the day when we can just tell our vehicles where we want to go and then sit back and enjoy the ride are within the visible near future. It means I can safely study for that impending midterm or review that big presentation on the way to school or work. It means possibly automating public transit. It means traffic will automatically yield right-of-way to emergency vehicles when lives are on the line. It means hands free driving and calling. It means fewer accidents, less traffic, fewer tickets for lead-footers (you know who you are).
This is great for us, but what is in it for Google. How is Google going to make money or even recover R&D costs from this projects? I highly doubt that Google is going to start making cars. They aren't very likely to build automated navigation hardware to sell. It's even very likely they'll give the software away for free. What do they stand to benefit from the existence of such a technology?
Many people asked how Google intends to make money off Android, since it doesn't have ads and they don't charge for it. The fact of the matter is, they already have. They gave app developers the ability to include AdSense into their apps. And Google gets a cut of that add revenue. That cut had already paid for the development costs of Android. They made money off the project indirectly as opposed to directly. It's not a very common business strategy, but it seems too have worked for them. The same concept will apply to the automated navigation systems. If I had a car that would drive for me, I'd no longer be limited to just listening to the news or music. I wouldn't even be limited to listening. I could do anything I wanted. What do you do when you have 10-30 minutes on your hands and nothing pressing to do. I get on the internet. And where does Google make their money? On the internet. Selling add space to customers and showing it on their search results as well as through other people's sites via AdSense.
You've seen how bad traffic can get. Think about that as a potential untapped market. Assuming one out of every ten trips makes one search while they're driving/riding, Think of the revenue Google would make in one year. That would easily recoop any investment they make into this automation technology.
And think of the possibilities in data mining. Google will have position and real time traffic data from every car that has this kind of system installed. They will know exactly how fast traffic is moving at every junction. They will have greater data for ads based on your driving habits and detours. Think of the possibilities for Google with all that real time data.
There may not be any obviously direct positive results from this project, but that's not how Google works. They don't make money off anything directly. Even search and GMail. they don't make money off the email you're reading, or the search you just requested. They make money off on the side of the screen. They make money indirectly from all their products. That's just how Google rolls.
New York Times