(FORBES) — The common explanation for the extraordinary breadth of Google services is that it helps the company target ads and that’s certainly part of the equation, advertising provides the revenue engine that drives the business. However, even more important are the thousands of experiments Google runs.
The massive breadth of Google services allows it to collect information on just about every human activity you can think of, from how we surf the Web to how we travel through a city and now, how we watch TV. It can then use the data to build simulations that help it determine how consumers are likely to act in the future, which allows Google to create better and better products.
Google has shown that it is not afraid to fail. However, in the new world of big data, failing fast and cheap is becoming too slow and expensive. Running thousands of simulations means that it can fail in the virtual world before if fails in the real one. With no marketing, inventory, or retooling costs, bits are vastly cheaper than atoms.