That’s the verdict from Colleen Scollans, the director of online sales for Oxford University Press who estimates that a million customers have used Google to view 12,000 of her titles and that sales growth has been "significant."

Not everyone is convinced.

Beyond the hue and cry from some publishers, others don’t concede any magic to Google Book Search. Penguin, for example, says Amazon is a more useful partner, citing a 7 percent increase in sales for books included in Amazon’s "Search Inside" tool. HarperCollins is among those who are building their own digital vaults.

But the nightmare scenarios of the-end-of-publishing-as-we-know-it don’t seem likely to play out.

• Springer Science + Business reports a Long Tail effect from Google Book Search with viewings of 99 percent of its 30,000 titles and growing backlist sales.
• Osprey press found 40 percent of Google Book Search click-throughs went to Amazon and 30 percent went directly to the Osprey site in the first half of 2006.
• Walter de Gruyter/Mouton-De Gruyter’s encyclopedia of fairy tales has been viewed 471 times in Google Book Search, with a 44 percent click-through to buy the book. About 25 percent of 1206 viewers clicked through to purchase Principles of Visual Anthropology.
• Hendrik teNeues said a new marketing campaign and inclusion in Google’s Book Search doubled his company’s online sales of coffee-table books.

"Everyone involved agrees," writes the Washington Post’s Bob Thompson, "that search helps people discover books they want. Everyone also agrees that in an ideal world, once those books are found, there’d be a quick way for the finders to pay to access the actual text — all of it or just part of it, whatever they need." Indeed, early results suggest there’s a win\win in searchable online texts. To which we say, "Hasten the day."

In 1976, Mohammad Yunus, then a young economics professor in Bangladesh, lent $27 to a group of poor craftsman in a village. Appalled at their economic bondage due to predatory lending, his small gift liberated a whole village. That one act of generosity grew into the Grameen Bank which has lent more that $5.1 billion dollars to 5.3 million of the world’s poor. For many who would think that financing the poor is bad business, consider this, Grameen’s customers have demonstrated a 99% repayment rate and 96% of Grameen’s customers are women, often excluded from economic resources in poor countries.

Yunus’ initial act has now spawned a movement 30 years later with 3,200 microcredit institutions around the world serving 92 million clients.

And for his pioneering work he has been awarded the Nobel Peace Prize.

And Yunus continues to innovate with a project called Struggling Members Program that serves 55,000 beggars. Grameen is also involved in projects to provide village cell phones, solar energy, inexpensive baby formula, low cost eye-care and rural hospitals.

Think about this! These are businesses, not NGO’s, government programs, or not-for-profits.

This phenomena of developing profitable businesses that really serve the world’s poor (and I mean serve them, not take advantage of them) has been documented in C.K. Prahalad’s The Fortune at the Bottom of the Pyramid. Prahalad presents breathtaking innovations in everything from $20 per night Western-style business class hotel rooms in markets where the typical rate is US$250-300 to cardiac care, eye care, and prosthetic devices of world class quality at costs 30, 50, and even 300 times less than the comparable in the U.S. To repeat, these are world class quality, not shabby shoddy makeshift solutions.

For example, Aravind Eye Care is the world’s largest provider of cataract surgery, performing 240,000 surgeries in 2004 and treated 1.6 million outpatients. Their stated goal is to “wipe out needless blindness.” (For you Jim Collins fans, this is quite a BHAG!) They treated more than 60% of their patients for free…and still operated profitably!

In a recent article, The Innovation Sandbox, Prahalad describes the thinking process that has led to such breakthroughs. He points out that you must begin with a simple premise that the poor deserve the same quality of care the rich get. A second premise is that you must rethink the entire business model. Adapting or fine-tuning existing models will not work because of the limiting assumptions behind the models.

The innovative process itself is then defined by four rigorous conditions. Each of these is a severe constraint, any of which would be a severe challenge to a business. However, it is the very fact of dealing with the constraints that unleashes the creativity. Most businesses try to innovate out of what they have, not out of what they don’t have. This closes down opportunities for breakthrough thinking. Remember the old adage that necessity is the mother of invention!

The four conditions outlined by Prahalad, which must be simultaneously met, are:

1. The innovation must result in a product or service of world-class quality.
2. The innovation must achieve a significant price reduction – at least 90 percent off the cost of a comparable product or service in the West.
3. The innovation must be scalable: It must be able to be produced, marketed, and used in many locales and circumstances.
4. The innovation must be affordable at the bottom of the economic pyramid, reaching people with the lowest levels of income in any given society.

The constraints have generated business models that break with much of conventional wisdom about how businesses operate. Too often in business we abandon an effort because we don’t think we have the resources. This type of thinking is determined to find a way in spite of the lack of traditional resources.

Will these innovations spread to other parts of the world and even begin to move up the economic pyramid? They are in fact spreading, as can be seen in the example of microcredit. And as to whether it will move upstream, I see some hope for that based on Clay Christensen’s work on disruptive innovation. (The Innovator’s Dilemma). Christensen has shown that disruption to existing businesses and industries does not come from the likely competitors but from businesses that are not even on the competitive radar because they are focused on underserved or unserved customers. These are customers that are ignored or abandoned by the business models of the incumbents. These innovators, over time move upstream and eventually overtake the incumbents, not because of new technology but because of new business models. I can see a day when health care may be more affordable to middle America because of the innovations in India.

These pioneers in South Asia don’t see the poor as a problem, but as a responsibility and an opportunity. For those of us in business trying to operate from a biblical perspective, Mohammad Yunus, Grameen Bank, Aravind Eye Care, and their brethren ought to inspire and challenge us. The challenges in our world are our opportunities to innovate and serve the poor, the needy, the underserved, the unserved all around us. In the West, we tend to think that success means going up the ladder. Maybe we need to stop climbing, and start descending.

Thanks, and congratulations, again, Professor Yunus.

With competition for market share becoming more intense, and expectations for returns and growth becoming fiercer, companies are making surprising moves to gain a greater share of their customers. Some of these are agile giants that have been around, moving past their less agile and less imaginative competitors. Others are new generation firms unencumbered by business dogma that says, “You can’t do that.”

Home Depot, the nation’s second largest retailer is making bold moves to expand it sales to the professional market which makes up 30% of its annual $82 billion total. A new program, named Home Depot Business ToolBox, treats its loyal customers as if they were employees. These small business owners and contractors can now have their payroll, credit-card processing, and personnel paperwork done through Home Depot. They can also receive mobile phone and shipping services. But most notably they can sign up for health insurance through Home Depot. Initially 12,000 customers have signed up to take advantage of insurance at Home Depot’s affordable group rates. Did any insurance or business service providers think that they would be competing with Home Depot?

H&R Block Inc. will now offer its 19 million tax customers a full service bank using its 12,500 tax offices. It hopes to get 1 million of its tax customers to open banking accounts to which their refunds are directly deposited. The average tax refund for H&R Block clients is $2,400 and their customer survey notes that 3 million of its clients do not have a checking or savings account. Did banks see this coming?

Even Wal-Mart is launching a credit card and moving into financial services. You can already cash payroll checks, transfer money, and buy money orders for low fees. This provides lower-income people opportunities they never had before. Did financial services companies see this possibility?

And consider the acquisition of internet phone company, Skype, by Ebay. Now that’s a move that the telecom’s didn’t see coming. We’ve gone from “What’s a Skype?” to “Uh-oh!”

I see at least three themes in the strategic moves described above. The first is a strategy to move beyond increasing market share (which is eventually captured) to increasing share of the customer. The second, now that companies have created a scale of operations that effectively organizes what were once fragmented markets, is the effective delivery of affordable services to lower income people. And third is the use of the Internet to democratize, even to the point of free, the availability of services previously controlled by near monopolies. Free phone calls to anywhere in the world. Think about that!

What are the lessons for us?

One, we have to think more and more about how to serve our best customers, delivering more and more real value. If we don’t they will leave.

Second, we can no longer hide in local markets. We can only compete with the Wal-Marts, the Home Depots, and the eBays through unique services and strategies that differentiate us. Or we have to align with them. We can complain, but we can’t hide.

Third, margin will be squeezed out of the value chain. Unless you provide unique value you will be disintermediated. We must study and acknowledge what is happening in order to effectively respond.

Fourth, the Internet, by providing the possibility of democratizing services, will spawn a whole new generation of business models. What were Ebay and Skype ten years ago? These services are accessible to us in ways that will enable us to innovate.

This is no time for strategic complacency or inaction. It is a time for greater focus on our customers and on innovation. It will be a time of testing for our normally inflexible cultures and assumptions. And I think a biblical worldview is of great advantage in this time because it encourages a focus on people, fosters a creative and value creating servant spirit, and emphasizes the ability of individuals and small bands of people to make a difference. The trends above, though threatening to some, seem also to be opportunities to serve people in ways that have previously been unthinkable.

After years of resistance and complaining, the music labels decided to monetize the flow of downloaded music — but not until the iTunes Store showed them how to do it. iTunes isn’t the only distribution model but it remains the most lucrative at this point by giving customers what they want in a way that lets everyone get paid.

Well, almost everyone. Downloading cuts retailers out of the loop and the last few years saw a strong downward pressure on the size and salaries of music company executive teams.

Still, no one is talking about the death of the music industry like they were for a while. The business is forever changed — there’s no doubt about that — but neither dead nor dying.

Now the film industry is where the music business was, making it ridiculously difficult and expensive to download high quality digital movies legally, even as hackers and pirates demonstrate how easy and cheap it really is.

"The studios continue to show an amazing proficiency for finding reasons not to sell or rent digital downloads in ways that customers might value, all for the sake of protecting their existing retail channels," The Post’s Pegoraro writes. "Hollywood’s attitude has been ‘movie downloads on our terms.’"

Hollywood’s terms have included pricing content without regard to the delivery medium, a practice that makes consumers scratch their heads at best; at worst it makes them angry. Meanwhile the studios cut a deal with rental houses that undercuts the foundation of the house. What Blockbuster began and Netflix extended, Amazon and Apple are now finishing. There is very little reason for most people to own DVD movies today. In about a minute, there may be no reason whatsoever.

Just to get it out of the way, Yahoo Video, Google Video, YouTube and MySpace videos are all in the same service category. They post uploaded video, primarily from users, and you get what you get. Some video are downloads and some are streaming Flash movies. The quality and content are all over the map. Users police the site and report inappropriate and illegal content . . . or not, and the services remove it per their end user license agreements. YouTube currently rules the class. Stay tuned.

Into the middle of that model, which has yet to generate much money for anyone, NBC Universal has introduced NBBC — the National Broadband Company. NBBC is an aggregating syndicate delivering video from willing content licensors to willing online distributors. Along the way, they attach advertisers (Banking giant JPMorgan Chase and the ubiquitous Procter and Gamble were the first to sign on).

NBC Universal Television Group President and Chief Operating Officer Randy Falco told AdAge that the infamous "Lazy Sunday" incident — in which a Saturday Night Live sketch was watched by five millions viewers on YouTube before NBC Universal demanded it be taken down — was a lesson that need not be repeated. "We have no issue with YouTube. If we have a valuable piece of content you won’t find it in the marketplace not being monetized," Mr Falco said. NBC affiliates and partners are cut in on the NBBC deal. NBC’s partners include Forbes, Newsweek, A&E, About, Vibe, Fox’s IGN Entertainment, CBS’s CSTV, CNet, HowStuffWorks and Artists Den. 230 NBC affiliates own a third of the new enterprise (in exchange for local news and sports content).

Back to the main thread. The first week of August 2006, Amazon entered the downloadable video market with Unbox, selling and renting television shows and theatrical releases to Windows XP users with Microsoft’s PlaysForSure digital rights management software on their PCs. Most rentals time out in a month. The purchase option includes two versions of the movie — one for PCs and one for handheld players — which can be stored on two computers and two handhelds as long as they are PlaysForSure compliant.

The second week of August 2006, Apple expanded the iTunes Store, adding theatrical films to the 220 television shows on the site. Beginning with 75 movies from four Walt Disney Company studios, Apple promised to add new titles and studios as part of it’s weekly new release pattern (on the music side, Steve Jobs cited Nielsen Soundscan data confirming that 88 percent of legal music downloads in the US are currently sold by iTunes).

Mr Jobs, whose Pixar studios The Walt Disney Company bought in January 2006, shared the spotlight at the launch with Disney Chief Robert Iger. Mr Iger said:

We’re here today to take the next step, to make a step in what we believe is going to be a natural progression of moving media from traditional platforms to new platforms.

…

Now we’re making movies available on this new service, on this new platform, giving people basically more opportunities to buy movies, more places to watch those movies.

The new platform Iger spoke of delivers a single video file playable on two authorized computers and two iPods. In Q1 2007 Apple will deliver a tiny box, code-named "iTV," which wirelessly transmits that same file (along with iTunes TV shows, podcasts, music and iPhoto still slide shows) from Macs or PCs to standard and hi-def television sets. The iTV box retails at US $299.

It appears that Apple will continue playing the role of game changer by creating fluid synergies between technologies and art forms. For Rob Pegoraro, it is inevitable that the studios will follow:

Essentially, the Internet at large determines how movies reach customers, and studios need to figure out how to fit a cash register into that pattern — that is, by charging for quality and convenience that you can’t get with a peer-to-peer service’s random selection.

Media companies who join Apple in delivering on that challenge will capture the next round of consumer attention and the profits and brand equity that go with it.

The question for the rest of us non-media-company types seems straightforward:

Are we holding on to business models that cannot survive because they are being rendered obsolete by people paying better attention to our customers than we are?

It was not music companies that came up with iTunes, nor (though one could argue that Steve Jobs wears two hats in this drama) is it film studios that are inventing new opportunities to get movies from Hollywood to our homes efficiently and cost-effectively. Will it take outsiders to open the next opportunity in your industry or will you and your colleagues and competitors get there first?