Grow with Google: in the final instalment of a three-part series on how to make money with Google, Stephen E Arnold says the search giant's fortunes are assured for years to come--and, with them, the revenue prospects for enterprising info-savvy organisations.
In 2010, Google began its rite of passage from youth to adulthood. Instead of wise elders in a smoke lodge, Google's journey involves lawyers. Viacom, the US Department of Justice and the EU are some of the players that control the passage. Not everyone makes it, and Google could be like the Masai youth who gets killed on his first lion hunt.
In my opinion, Google may suffer as legal eagles gnaw the company's entrails, but the business opportunities will exist for years. I want to disclose some of the findings from my years of research into Google's technology and business methods.
First, Google has left a legacy. What I mean is that even as a young company, Google showed the way for engineers and programmers. Instead of building islands of computing, Google constructed a cloud-based, distributed computing platform. Google engineers understood that Google was different and they built a platform that broke cleanly with the desktop and client/server approach to computing. Now that Google employees are leaving the company, the DNA of Google is spawning startups headed by these ex-Google people. These "xooglers" are building on the learning they acquired in their work at Google. Some fail like Mech Zoo. Others thrive and like ReMail, founded by a Google intern, get acquired by Google.
Second, Google's disruption creates opportunities. Examples vary from the legions of consultants who comment on Google's every move. Blogs and traditional trade publications cover Google's activities in excruciating detail. A good example is Google Blogoscoped, published by Philipp Lenssen, based in Germany. His blog covers Google's Oscar information and "killer features" on YouTube. Lenssen generates revenue from advertising and consulting.
Companies develop software to hook Google products and services into incumbent enterprise software and systems. If you navigate to Google's Solutions Marketplace, you will find a dashboard of products and services specifically tailored to the needs of an organisation wanting help in tapping into the information machine that Google has become.
Third, Google invests in companies that it finds interesting. Most of Google's investments are difficult to identify. One example is Meraki, a hardware and software company founded in 2007, that explains itself with the tagline "Wireless networks that simply work".
Some of Google's investments are outright acquisitions. Many are as difficult to spot as Google's investment targets. In 2006 Google acquired a company called Transformic Inc, which gave it both next-generation data management technology and some of the moving parts for high-profile Google services like Google Buzz (social networking) and Google Wave (ad hoc collaboration, content management and participant tracking). Like a snowball, Google continues to mash up technology, absorbing (as with its purchase of Aardvark) or discarding (as with its purchase of Dodgeball) what it needs to continue to grow.
These three points are useful in understanding that Google will have a "paying forward" impact on business opportunities. Whether you want to write a book about Google or become an expert in AdWords, the company provides a fertile environment for you or your organisation to generate revenue.
My research has revealed another aspect of Google, and I want to describe those findings before offering my view of the outlook for Google over the next 24 to 48 months.
I thought when I began digging into Google's technical papers and patent documents that the company was a one-trick pony. I discovered that Google was pulling together ideas that were often quite well known to specific research communities. What the company did was to winnow available technologies and glue them together in such a way as to make indexing and retrieving web content financially possible. Previous web search companies were constrained because their approach to plumbing (network architecture and computational methods) was too expensive to scale. By 2002 Google had cracked these tough nuts. The result was that Google had a general purpose and massively parallel supercomputer.
It was when Google deployed its advertising platform on its search and retrieval plumbing that I realised the company was truly revolutionary. Unlike search rivals Alta Vista, Excite and Yahoo, its platform would make it possible for Google to host as many applications as the PC operating system MS-DOS but deliver those solutions from the cloud--or as the term was back then, via the "information superhighway".
Google's founders, Sergey Brin and Larry Page, were not like the reclusive genius of Leonhard Euler or the tinkering Thomas Edison. Brin and Page were able to filter many possible technologies, identify the specific method needed to address the particular challenges facing Google, and hook these methods together into a system that could scale, process large volumes of data quickly, and allow programmers to snap components in and out. The change revolutionised computing because it made its hundreds of millions of users aware of what was in 1998 a different way to deliver services.
SCALING AND EFFICIENCY
In my research, I identified many antecedents to Google. These range from the IBM timesharing world to the Excite search service, whose founder ended up at Google. Google's focus on scaling and efficiency set it apart. In my opinion, Google threw petrol on the Linux campfire and created a competitive barrier that has so far prevented Microsoft, Yahoo and hundreds of other competitors from making much headway in search, online advertising and now such fields as programmable search engine systems and dataspace management.
Google does have weaknesses. Three warrant comment. First, the company has not so far been able to respond effectively to social media. Facebook, Twitter and a handful of other companies have outpaced it in this sector. Google's attempts to respond have produced more problems than solutions, with Google Buzz being added to the pile of lawsuits the company has to deal with.
Second, Google's core management team--Brin and Page along with Eric Schmidt--preside over a company that has more than 18,000 employees. In an effort to keep the freewheeling style, Google has sidestepped some traditional management controls. But as the Google Buzz fiasco makes clear, startup-type management processes may not be appropriate for a large, multibillion-dollar organisation. Management is a strength but also a weakness at Google. One series of mistakes could bring the Google rocketship back down to Earth.
Third, Google is challenging countries, not just companies. The business has entanglements in China, Germany and Italy. The recent conviction of three Google executives, including its chief legal officer, by an Italian court is an embarrassment. Google's high-handed approach to some of its dealings sets executives' teeth on edge at some of its rivals. Apple and Microsoft are particularly sensitive to Google. But adopting the same approach to sovereign states could have far more significant consequences.
There are three questions worth asking about Google. Where does the opportunity originate? Why will it persist? And isn't Google a risky bet to make?
Let me answer each of them.
First, Google's opportunities flow from the evolutionary, almost organic, nature of its technology. Over time, it creates more solutions. As solutions become hardened, each becomes a component that other Google engineers can use to build new solutions. As a result, Google seems likely to continue to create opportunities as a result of its technology even if the management policies of the company are curtailed by government action. Google will persist for years as a net disruptor. The insightful entrepreneur or savvy business development officer at another company can take advantage of these opportunities to build products, provide services or deliver informed professional services.
Second, Google's products and services have two effects. One is to provide engineers with examples of how Google's brand of technology creates opportunities. Google's push into education helps guarantee the Google influence will not wane any time soon. The other is that even if a product pushed out by Google fails (the ill-fated Web Accelerator, for example), incumbents and competitors have to take notice and respond. By triggering change, Google keeps the ecosystem moving with Darwin's blessing.
Third, Google may now be too big to fail. Say the US government trims Google's wings in the Google Books scanning project. Well, in the scheme of Google's activities, Books is just a small sprout in a very large ecosystem. Even should advertising revenues collapse, the company could institute fees for accessing its system; with a market share of web search in the 70-80% range, the company would surely survive.
And if just one of Google's initiatives in telecommunications, video or enterprise applications catches fire, then the company would have an opportunity to rebuild its revenue stream. More importantly, if those ad revenues continue to grow and one or more of Google's other initiatives begins to pump cash into the company, then its future is stellar.
My recommendation for entrepreneurs and businesses looking to grow new revenue is unchanged: surf on Google.
Stephen E Arnold is an IT consultant
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|Author:||Arnold, Stephen E|
|Publication:||Information World Review|
|Date:||Apr 1, 2010|
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