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We'd like to thank everyone who has participated in the discussion this week, and close by asking for some speculation on Google's evolution. Right now, the company's resources and aspirations seem boundless, and obviously it will continue to be an important force for the foreseeable future, but the Googleverse can't maintain a constant rate of expansion forever. What do you see Google growing into as it and its markets mature? What forces, external and internal, will it bump up against? Will it ever find itself with a "founder's dilemma"? And finally, what's one thing that most people don't understand about Google that they really should?
I've been fairly critical of Google - I think its hubris is at best grating and at worst dangerous - but, like most people, I'm also in awe of the company. Sergey Brin and Larry Page built a better mousetrap, and the world indeed has beaten a path to their door. I personally owe Google a debt of gratitude. In writing my book <em>Does IT Matter?</em> a couple of years ago, I relied heavily on Google in doing research - I could never have written the book as quickly without Google. So: thanks, guys.
But if Google has reaped a great and well-deserved bounty from creating a superior search engine, it has also been lucky. It happened on its ad-driven business model just as the advertising world began an epochal shift of dollars over to the net, and the dominant position of its search service and related ad-serving service has meant that it has taken in the lion's share of the spending. Moreover, it's been able to run its AdWords and AdSense services as black boxes, hiding to a large extent the way it divvies up the money that comes in. Advertisers and publishers haven't complained much because their choices have been constrained. In the end, though, markets abhor both black boxes and oversized profits.
Competition, from Yahoo and Microsoft as well as others, can be expected to reduce the profits that flow to the owners of Internet ad-serving mechanisms, while also making pricing more transparent. Moreover, advertising is a cyclical business, and at some point we'll see a stemming of the flood of advertising dollars to the web. Combine greater competition with advertising cyclicality, and you end up with a Google that operates with a considerably lower profit margin than it enjoys today. Then add in the company's free-spending culture, and, well, you've got a problem.
So when will that point arrive? That's the hundred-billion-dollar question, and I wish I had the answer. But keep an eye on what happens with Google's lucrative relationship with AOL as its search provider. That could be the canary in the coal mine.
Google has a number of challenges. Some are within Google's span of control; others are external factors where Google has limited ability to affect these factors. The internal challenges may be the biggest ones for Google. I certainly don't envy Google management as the team comes to grip with might be called "brain scarcity." Google is the heir to Bell Labs. There are many smart, even brilliant, people at Google. The challenge is to get more of them, keep them working in a productive manner, and maintain the high level of engineering that has characterized the company's first nine years. Google is in the midst of building out its products and infrastructure. Its need for people is prodigious. Can Google keep the quality of the minds up as it adds more bodies? Can Google find the caliber of professionals it needs to respond to its market?
Second, can Google maintain its culture as it grows? Once companies reach a certain size, the "old ways" have to give way to "new ways." Unfortunately some of the "new ways" change a flexible, fast moving enterprise into a less flexible, slower moving operation. That transition points creates an opportunity for what a Kung Fu master might identify as the "moment to strike." Can Google maintain its alertness and its defenses as its expands? Will those with knowledge of how to deal Google a death blow be able to strike a killing blow? If Google is focused on internal issues, Google management may not be looking for a killing thrust.
In terms of external forces, there are several over which Google has limited control. First, lawyers. The Denver class action suit over the allegation that Google engages in some type of advertiser deception seems to be losing steam. However, other legal challenges remain and new ones can arise. A single judge, stunned with too many television trials, could shut Google down or at least try to shut Google down. The law is a wonderful and magical discipline strangely disconnected from many issues vital to an enterprise.
Second, technology. Google has engineered an underappreciated and little understood technological marvel. I borrowed Google's own word "Googleplex" to refer to the company's infrastructure. If a glitch surfaces that cannot be quickly resolved, Google's blazing speed and stunning performance could crash and take the system offline. Once down, Google's competitors will increase their assault. A technology problem could be the undoing of Google. So far, Google has handled outages, spikes, and hacker assaults. The newness of Google's system may harbor an unknown, fatal flaw. If such a flaw surfaces, Google may not be able to overcome the problem and the external attack a glitch will invite.
Third, the market. For the last few years, search engine optimization has dominated many people's thinking about search. What if that confidence in online advertising drops? What if a new angle for getting messages to customers emerges from the dorm rooms in Bangalore or Budapest? The "Internet" has thrown some monkey wrenches into smooth running operations before. Could it happen again? Absolutely. The problem is known when, what will emerge, and how it will impact folks such as Google.
In summary, I am glad my hands on management days are behind me. I don't have the energy to tackle this many challenges in today's Wild West business setting. Better to sit tight in Harrod's Creek and watch the locals shoot squirrels with their automatic weapons.
Stephen Arnold, Harrod’s Creek, Kentucky, December 9, 2005 0900 Eastern time
Challenges
- Retaining and motivating talent. The stock can’t continue to appreciate forever, if the stock price takes a dive, how are they going to retain and motivate talent when perhaps as much as 30%-50% of their employees have options under water?
- Product discovery: Marketing can’t be done by five links on one homepage. If 95% of users never click deeper into the Google site, how are they going to expose the hundreds of new products they’re developing every year?
- They’ve missed the boat on social networking and viral communities. Orkut is a complete strikeout (unless you’re Brazilian). MySpace and Facebook are growing like weeds. Flickr got snapped up by Yahoo.
- Google’s Schizophrenia: Their DNA is built around secrecy, yet their mission statement professes to make the world transparent. These two lobes of the Google brain are fundamentally at odds with each other. A company that states they want to make the world's information universally accessible shouldn’t blacklist media organizations.
Founders Dilemma?
I absolutely do not think that Google will face a founder’s dilemma. I believe that Larry and Sergey will be the Bill Gates of our generation. They have a brilliant combination of technical and business savvy along with the confidence to challenge conventional paradigms. Moreover, they have an insatiable curiosity an absurd focus on creating utility for users.
The one thing that most people don’t understand about Google?—-That people at Google work harder than 99% of the companies in the Valley.
Again, speaking as an info professional: >>>And finally, what's one thing that most people don't understand about Google that they really should?>>>
That Google is just one of many companies doing good work in search and info retrieval. I often wonder a world when Google was THE ONLY OPTION to assist the user in finding info.
It's scary. Many options and competition are a good thing. Also, we've seen the mass media here in the US becoming so concerned with its consolidation. In some ways, at least to me, it reminds me of Google's mindshare (not marketshare). One company. Forget building the technology, just getting people to try it, is as much of a challenge as Google building it.
Google is just one of many tools. Some free, some fee-based. It's all about using the correct tool at the correct time. This is why teaching info retrieval skills and critical info skills and beginning at a young age, is so crucial. One issue, is that part of Google's mindshare is the educators themselves.
Be daring, try new services, new databases, learn what they can do, what they provide. In terms of general plain old web search, spend a day or a week using MSN, Yahoo, Exalad, Clusty, Jeeves, etc and see what happens. You might even be impressed.
Also, be daring and look for specialty databases (like SimplyHired and Topix) and see what extra value they offer the searcher.
And finally, and once again, look at what your library offers WITHOUT having to even leave your home of office.
Examples from the San Jose Public Library: Not only books but also professional research assistance 24x7. Perhaps the most important thing. http://www.sjlibrary.org/services/reference/
Downloadable ebooks and audiobooks http://www.sjlibrary.org/research/ebooks/index.htm Folks, check NetLibrary. Techies check Safari. Both full text, full image books. No limits on how much you can read.
While much of this conversation has focused on Google as a company, I look at Google through the eyes of a researcher trying to find answers. Google changed the market for online information by making the world of HTML content more easily accessible and enabling mashups such as maps and addresses, which were difficult to do in a different technical environment. But there's a universe of information that's not accessible, premium content, and the content in databases as well...as Gary documents so very well at www.ResourceShelf.com. Then go over and look at http://www.Docuticker.com/ to see the variety of reports being generated by our tax money and non-profit organizations.
I see two challenges finding this content in Google, and reasons to move to other resources. The first is that general search engine technology is still in its infancy for retrieving relevant information. (Vertical search works very well for this problem!) Books and reports don't have PageRank, but are authoritative sources. There are some brilliant minds working on this aspect of retrieval, so this area should improve. It's startling how different the search results can be in different search engines.
The second challenge is much more intractible, and that is rights management which has always been messy (even worse than water rights), and has become more so in the digital age. Steve has mentioned that legal issues could have a significant impact on Google. I have to second that....the engineering mentality and brashness of youth doesn't recognize that content producers own their intellectual property and have the right to determine usage. Granting permission is a fundamental aspect of content management, and Google has to grow up to understand the implications of that. They could find themselves with Microsoft sized legal bills, and court mandated changes to their business..........
The thing people need to know and remember about Google is that this company is in its infancy, and its ambitious founders, Sergey Brin and Larry Page, are just getting started.
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