Googlicious – More Google Expansion
Loren Baker August 30, 2004
Googlicious – Post IPO Google Expansion
The skeptics scoffed, the Securities Exchange Commission had a fit, and the company had to halve the number of shares of the initial public offering to set a price that valued the company at roughly 120 times earnings, extravagant even by dot.com era standards.
By the end of the day, Google had raised $1.7 billion as part of a floatation that valued the company at $23 billion. Not bad for an enterprise less than ten years old with voting control still in the hands of its founders. Why such exuberance on the part of investors in this post-exuberant era?
Consider: Google — in either its search or its news mode — has become the home page for millions of web users. Google has developed a profitable, minimalist, advertising model, AdSense, which places content relevant text advertising on literally millions of webpages. It bought Blogger, which gave the company a window into the exploding world of blog-based personal publishing. It is currently field-testing Gmail, a free e-mail service which offers a gigabyte of email storage space and complete search capacity to every user. The $23 billion market cap was about what Google has the potential to become: the dominant company of the next Internet.
In the 1990s Microsoft owned the desktop. Bill Gates and company looked at the world in 1982 and saw millions of PCs, each of which needed an operating system and software. A generation later Google is solely a creature of the Internet, a phenomenon that Gates failed to anticipate (fun experiment: compare the early version of his The Road Ahead with later editions).
For Google, computing is about one network with millions of users none of whom really are really wild about more software, as such. What they want and need is content and functionality. How they get it, whether from their own hard drive or a drive five thousand miles away doesn't matter. This opens up huge opportunities.
WITH THE SUCCESSFUL floatation and the experience Google has gained owning Blogger and getting ready to roll out Gmail, the company could take a step that would rewrite the future of the Internet. That is, the company might enter the browser market by either building a better browser, buying one of the several companies that make one, or cutting a deal with the Mozilla open source foundation, which took over the Netscape/AOL browser and is fast becoming the browser of choice for the computer literate.
In the 1990s owning the desktop was the cyber goal. Microsoft, with its martial marketing, won. Windows, awful as the early versions were, rolled over competing operating systems like the Marines through Najef. In Windows' wake Word, Excel, the horrors of Power Point and the various bug ridden versions of Internet Explorer infested PCs worldwide.
Nothing, it seemed, was big enough to take on Microsoft. Apple was relegated to the computing Galapagos where it grew into strange, wonderful, highly adapted forms with its own processors and software which did not provide the blue screen of death. Apple products dropped out of the main evolutionary path of the PC. Linux posed a challenge that remained mostly theoretical because it was so difficult for laymen to work.
But now broadband access is taking off in America. The latest Neilsen report puts broadband in 51 percent of Internet-using homes. Which means "owning the desktop" looks like an increasingly quaint goal when always-on Internet means computer users have no more time limits — either through limited time on dial-up services or the sometimes snail-like download speeds — on browsing.
A GOOGLE BROWSER, perhaps some version of the Mozilla browser Firefox, could be promoted by Blogger/Gmail and the Google search engine. That massive power of cross promotion would give a Google-endorsed browser a decent shot at carving into Microsoft's market share. It wouldn't hurt that Firefox is about twice as fast as the latest flavor of Explorer.
As broadband expands, browsers are poised to become far more than ways to surf the net. Google's acquisition and revamping of Blogger points the way. Instead of going through the hassle and expense of setting up an independent website, Blogger lets even a novice put up a professional looking web page complete with images.
Initially, the company sought to recoup its costs by putting sometimes cumbersome ads at the top of each blog. It recently decided that a better route would be more fully to integrate Blogger and the Google search engine. A small bar resides at the top of every blogger website (e.g., reviewing.blogspot.com) that has a search function for people to examine the archives of said website. The results display on a Google page, with a strip of sponsored ads that are triggered by search words. Also included in the strip is a randomized "next blog" button, which can make for hours of fascinating reading.
With a public rollout likely at the beginning of next year, Gmail is similarly integrated. To pay for the free gigabyte of space — more than anyone is likely to use for purely text messages in a lifetime — the service includes a strip of context sensitive ads, triggered by people who use keywords to search through their e-mail.
On their own, Gmail or Blogger may be interesting but inessential Internet services. However, imagine if the company were to offer an additional gig of storage space for off-site data backup and image/photo hosting. (At the rate Google buys hard drives, the space would cost about a quarter.) Stitch those offerings together with a Google browser which fully integrates blogging, Gmail, a personal photo album, instant messaging, a world class search engine, and off site data backup, and a future begins to open up. From a browser.
The final stroke for this new Google suite would be to offer the most frequently used consumer applications — word processing, spread sheets, bookkeeping, basic image editing — and, in time, voice-over Internet telephony, MP3s and movies on demand. What would be left for Microsoft to do? Even assuming it could keep the Windows quasi-monopoly in place, maintaining the skeletal structure of most PCs is not the stuff of billion dollar quarters.
Guest Columnist Jay Currie is an avid blogger and writer from Galiano Island, British Columbia. This article was originally published in the American Spectator and has been republished with permission from Jay.
How to Build a Link Analysis Dashboard with the Google Query Function in Google Sheets [Free Template]
Google's Baby Algorithms: How to Think About Them for SEO
How to Get Organic Traffic That Isn't From Google