September 10, 2008
Google Has a Birthday
In writing this editorial, we added a half-dozen Google searches to the 65 million that are made on the Internet search engine each hour around the world.
We could have clicked on ads that brought Google nearly $20 billion during the last four quarters. Tallying all those clicks, which advertisers pay for, amounts to some $2.2 million an hour and adds to Google's $142 billion market value (compared with Microsoft's $241 billion market value).
We mention Microsoft because Google has become the new Microsoft in terms of market dominance. Sunday was Google's 10th anniversary. It was founded by two Stanford University nerds Larry Page and Sergey Brin (who now are billionaire nerds). The duo, who are still in their 30s, transformed a graduate school research project into a faster, better search engine, dwarfing such search engines as Yahoo, Lycos and even the mighty Microsoft's program for searching the billions of facts, factoids and would-be facts on the vast network of computers known as the Internet. Try Googling "Google" and in seconds you'll find seemingly endless lists of results. You'll also find the ads that have made Google's founders rich and famous, much to Microsoft's dismay.
It wasn't that long ago that Microsoft was the bully on the hill. Because it bundled its browser (Internet Explorer) with its operating system (Windows), the wannabes and second-bests tied Bill Gates in legal knots, costing the company billions in legal fees and settlements. The company's founder, who is spending his billions on philanthropic projects around the world, became synonymous with the robber barons of yore, a spurious comparison in our view.
Gates has struggled for the past decade to develop a web portal and search engine. Google has more than 20 times the number of searches per hour than Microsoft; two-thirds of all Internet search are made with Google (a play on "googol" - in math, a 1 followed by 100 zeros). Now Google, with its 650 million users, is competing with the very essence of the Microsoft business model by developing its own web browser (Chrome) and web-based e-mail, word processing and other business applications that don't have "Microsoft" stamped on the box.
Even though Google's stock has fallen nearly 40 percent since November and government agencies are making noises about "monopoly," the future is anything but grim. Google owns the video-sharing site YouTube, the advertising service called DoubleClick, and its name is indelibly stamped on maps, e-mail and streaming news. While the company has cornered the market on finding information available on the Internet, it's also planning to digitize the billions of newspaper articles that were published over the past 250 years.
Google's company motto is "Don't be evil." It treats its employees to free lunches and the kinds of perks that have pretty much disappeared from American companies. Unfortunately, government regulators see "evil" in success, "monopoly" in market dominance and "regulation" where none is needed. In a free market, Davids can outsmart Goliaths, and everyone - consumers and investors - can wind up as winners. So, happy birthday, Google. You've come a long way in just 10 years. But watch your back.
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