Google Teeter Tottering?
January 25, 2010
I don’t want to make a big deal of the Google financial results that produced a decrease in Google’s share price. I don’t want to mention the alleged eclipsing of Google by Facebook in traffic in December 2009. I don’t want to comment on the decision of Messrs. Brin and Page to sell off their shares, effectively giving up their toe lock on Googzilla. I don’t want to point to the dust up between Google and the nation state of China, an outfit with a field work directorate and real weapons, not algorithms. I don’t want to point to the legal hassles in the US with the cranky Viacom. I don’t want to comment on the legal issues in Italy. I don’t want to mention the quite enchanting notion of the French tax authorities dinging Google for some Euros. I don’t want to point out that Google has sprawled across most business services where computer efficiency disrupts existing business models unintentionally. That’s a lot of “don’ts”. If Google were on a teeter totter, the perch seems precarious. What if the kids just jump off?
I want to make three observations.
Last week in Europe (a country with lots of consonants in its name) there was some idle chatter about the backlash that is building against Google. Cheery logo and nifty mouse pads aside, Google is giving some of the folks with whom I spoke nightmares. One recent example is revealed in “German Media Tag-Teaming Against Google ‘Monopoly’”. Read the original for the scoop, but the headline makes the point. Big outfits have to link up to have a shot—note a single shot—at dealing with things Googley.
Second, the abrogation of control makes clear that the Google has morphed beyond the original vision of organizing the world’s information. What has become clear is that non-logical factors are looming ever larger. The abrogation of control is a hint that the “logic” of the original Google may not be enough. The prudent punt I suppose. This decision is important because it means that in a few years, Google will operate like the “old” GM or General Electric, and we know how that model works.
Third, the disruption caused by Google is gaining momentum. A pull out of Google or even the dissolution of Google itself cannot bring back the pre-Google world. I argued this point in The Google Legacy in 2004 (published in 2005). I remember one Harvard grad pointing out that a six year old company doesn’t have a legacy. I pointed out that I may live in Harrod’s Creek, but I did not just fall off the turnip truck. His failure to understand what Google’s technical shaping of the DEC AltaVista insight and the injections of cleverness from research computing would mean. I think that fellow is now a Wal*Mart greeter. Investment banking and blue chip consulting jobs are not what they once were I understand.
Add up these three factors, and we have a road map for what’s ahead in the next three to five years:
- Geo-political actions as a result of technology. Forget cyber warfare. That’s just the visible stuff.
- Massive disruptions of existing business methods and models. The fate of the traditional publishing sector is just the beginning of even more significant dislocations.
- The emergence of those weird distributions where a handful of entities control 90 percent or more of the resources.
Google will remain a player, but it will be further marginalized in some important sectors. To find out which sectors, you will have to wait until I complete my next Google monograph. Exciting stuff.
Stephen E Arnold, January 24, 2010
A freebie. I suppose this is a write up that promotes my new Google study. It won’t be a “Sergey and Larry eat pizza” type monograph. I may even give it away free. I will report this to one of my five publishers if any remain in business by the time I complete the writing.
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