Tougher Road Ahead for Google?
June 30, 2005 10:06 AM   Subscribe

Next Act Won't Be as Easy as the First. Gates once conceded: "Google is still perfect, the bubble is floating and they can do everything. You should buy their stock at any price.” And just this week they affirmed this statement with their release of Google Earth, showing the world that their scope is beyond just websites. But is google growing too ambitious? is this desire to "search all of the world's information" signaling doom?
posted by merc (22 comments total)
Meh, their "release" of Google Earth involved taking Keyhole and making part of it free. It's a really neat application, but it's a product that was mature when they acquired the company that made it, so it's hardly indicative of future performance.
posted by mendel at 10:16 AM on June 30, 2005

posted by Divine_Wino at 10:22 AM on June 30, 2005

posted by evilelvis at 10:24 AM on June 30, 2005

posted by keswick at 10:27 AM on June 30, 2005

No. Yes. Maybe.

Hell... they're making money. No.
posted by insomnia_lj at 10:31 AM on June 30, 2005

Doom? Which version?
posted by OmieWise at 10:36 AM on June 30, 2005

Link doesn't work with Mozilla, FYI.

Favorite quote: "We have yet to see a business proposition that recognizes what content providers bring to the table." Heh, I'll say. If the "content providers" had ever been serious about bringing something worthwhile to this particular table, they would have invented their own on-line video search six years ago, and the whole issue would be moot.

There were similar worries when Google started caching the web space, but when it turned out to be beneficial for pretty much everyone, all but a crazy few stopped objecting. This could easily go the same way.
posted by Western Infidels at 10:38 AM on June 30, 2005

Doom for who? Google is wisely spending the billions of dollars they received from their IPO to expand their empire. They are at least tripling their employee force and all those brilliant minds are going to create a buttload of cool stuff. This is just the beginning.

The best thing about Google is their APIs which opens up their data to innovation even from outside the company.
posted by spock at 10:46 AM on June 30, 2005

What I would question here is whether or not to invest "at any price." It's a stupid question. You should only ever adopt a buy-low strategy. Is Google's stock price really set to go up?

Their stock price is wildly inflated and the rate at which they are spawning new "products"--a rate well beyond any company's capacity to manage profit models and marketing--belies the fact that they have an overabundance of bored software engineers, each of whom is highly paid... the assumption that they have a handle on all of it is groundless.

Doom? No. They'll be around another 10 years at least, easily. $400 a share? I doubt it. I think it's more likely they'll go back to their support level at $180, if anything.
posted by nervousfritz at 10:48 AM on June 30, 2005

I think Google is going to kick Microsoft's ass in many important way when it comes to the web.

How? By not only having brilliant people, but also by being able to attract and bring on board a lot of the world's best web applications, as they are matured and developed.

Google's strategy involves not only creating new, powerful applications, but also aqcuiring other web-based applications too. Microsoft can develop a lot, but they could never hope to outdevelop, outinnovate, and outgrow all of the small web-based applications out there.

Google has a buttload of money to spend, and for many of these web-based apps, the idea of a Google acquisition is viewed very favorably. Hell, as we've seen in the Blogger acquisition, most users *liked* the idea of their blog service being bought by Google.

... and you just can't say that with Microsoft. Owners of web-based applications would be hesitant to sell their users to MS, and MS would be hesitant to buy, because they know that many of the users they would be buying such apps for would jump ship. They also know that such an acquisition would increase noise about MS being a monopoly.

So no... no doom imminent. Google is still perfect, the bubble is floating and they can do everything. They won't be perfect for ever, I suspect, but they're certainly going to have to do a lot to tarnish their reputation in order to be seen as less perfect than Microsoft.

Microsoft seems to know this, btw, which would explain why they're trying their best to come off as the good guys, and why they're releasing their work on RSS using Creative Commons licences.

As Creative Commons says: Some rights reserved. (i.e. all the important ones.)
posted by insomnia_lj at 10:52 AM on June 30, 2005

Google makes like 99% of their profits from Google Ads and Adsense. When Google's stock was being sold for the first time, I was of the opinion that it couldn't do anything BUT go down because other search engines were (and still are) ramping up their efforts and providing competing ad services. So I was of the opinion that since most everyone already used and knew of Google at that point, if the competition heated up, they can only lose users, and their stock could only go one way... down. I've watched them release a lot of geek-friendly technology and tools, but I bet many of which will never earn Google a dime. I'm interested to see where they go, I heard about their possible competition with PayPal, that they then toned down the impact of a lot. Sites like Ebay and Paypal are marvelous businesses, because once the site is set up, which isn't that hard, they make a killing on their respective fees, whether it be Ebay's commission or Paypal's transaction fees. If Google has a lot of bored programmers sitting around, I don't think they could lose money competing in either of those areas.
posted by banished at 11:14 AM on June 30, 2005

Western Infidels, what I find so interesting about Google Earth is the fact that it is a content model. They're not just organizing and searching here, they're providing the content. This sheds a different light on merc's question: can google achieve their "mission" without having to own the content? It looks like they may not be able to pull it off.
posted by rush at 11:58 AM on June 30, 2005

Their stock price is wildly inflated

I read (well, glanced at) a report somewhere lately that said their stock is probably worth about $50/share. I don't remember the exact number, think it was less. But $50 is about what I came up with when I added up the numbers back when it was trading around $180. Every few months, I get to thinking maybe it's time to go short GOOG. But I haven't done so yet, and each time I've been glad I didn't. I still think the time is coming soon, but not yet.
posted by sfenders at 12:17 PM on June 30, 2005

Google's maps are overrated, despite the admittedly neat satellite option. I recently drove from Mobile, Ala. to Augusta, Ga. (long story), in about seven-and-a-half to eight hours-- only speeding a little (rarely over 73) and stopping twice along the way, for probably around 30-40 minutes total. There was also the usual clogged traffic on I-20 east of Atlanta. Google maps, however, had it that the trip would take more than ten hours!!

Lesson: Google is pretty great, but it can't do all. (And I've tired of getting wacky, ideologically-driven blog postings in news searches too!)
posted by raysmj at 12:36 PM on June 30, 2005

rush: ...what I find so interesting about Google Earth is the fact that it is a content model. ...can google achieve their "mission" without having to own the content?

Hmm. That's true, and that is a departure from Google's older (web-indexing) activities.

What I expect, though, is that the content owners will find that indexed content sells better. This is sort of related to the "long tail" idea for IP. Old content may sell (slowly) for a long time - but it will be handicapped if no one can find what they're looking for. Imagine how many story reprints the New York Times would sell if they didn't have an index.

If the bulk of the content owners stood firm against indexing of this kind, the venture would be on very shaky ground. But it sounds like Google has got solid rights to index at least some shows. Maybe the content owners will see that searchable, indexed content that is easy to find is also easy to buy.
posted by Western Infidels at 1:02 PM on June 30, 2005

Google does search better than any alternative I've heard of. However, their other technologies just aren't living up to that.

My site still uses Adwords because I'm too busy to find an alternative right now, but AFAIC that program really doesn't live up to the hype. Not only do the ads displayed contradict the content on the page most of the time (although I accept that this is probably due to my usually writing against things), but I can wait for weeks between the time I write a new article (which takes up the vast majority of the front page on my site) and the time at which the ads get updated.

I tried using Google's feedback forms to ask why that was, but it took them over two weeks before my request for support was even acknowledged -- and by the time the issue was addressed by Google staff the problem had solved itself.

Of course Adwords is only one technology, but every "new thing" that Google now features seems to have been more or less straightly purchased from another entity as a finished product already.

Anyway, that's why, while I used to be a big Google cheerleader, I'm now more of a skeptic.
posted by clevershark at 2:45 PM on June 30, 2005

Oops, I guess that's "Adsense" and not "Adwords", but I'm sure everyone knows what I meant.
posted by clevershark at 2:46 PM on June 30, 2005

posted by analogue at 2:49 PM on June 30, 2005

Google's strategy involves not only creating new, powerful applications, but also aqcuiring other web-based applications too.

That's not why they're so universally loved. The real "strategy" is the nearly open-door policy they have with their toys. Just one example (there are hundreds): Google Maps. They could have obfuscated the url, they could have used session id's... but no. They made it dead-simple to experiment with. Microsoft would never, not in a million years do something like that.
posted by Civil_Disobedient at 4:15 PM on June 30, 2005

people wildly underestimate microsoft's intellectual resources, compared to google. yes, they make pretty web pages. but microsoft pays the kind of people who make things like haskell. we're talking seriously smart computer scientists, not just calling a server from javascript.

you'd think people here would be smart enough to look behind the hype and branding a little. there's more to computing than the latest xml based doodah. microsoft goes much deeper than google.
posted by andrew cooke at 9:21 PM on June 30, 2005

andrew cooke: as well as the branding - the UI and the design overall. But you're right, MS is undoubtedly a smart company full of smart people, you don't take over the PC world without having some nous. But I don't get it - why is their stuff so ugly, why so pedantic and difficult?

But I do think that google has found that its smart enough to be stupid enough to go for the easy route on some things - which MS might not have figured out.
posted by blindsam at 10:43 AM on July 1, 2005

we're talking seriously smart computer scientists,

Bill Gates understands the importance of IQ. To be as big as Microsoft and still to innovate at all is a miracle (ask IBM).
posted by bobbyelliott at 2:41 PM on July 1, 2005

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