Googling on Google

In a previous post, I was quoting Joseph Licklider’s statement “people tend to overestimate what can be done in one year and to underestimate what can be done in five or ten years.” Let’s choose Google as an example. On the word of “Googled: The End of the World As We Know It” by Ken Auletta, in 2000, Google had $19.1 million in revenue, and a $14.7 million loss. Last year, Google had $24 billion in revenue, and net income of $6.5 billion. Moreover, according to BusinessWeek, Google served up 23 million searches per day. Now, it’s over 300 million searches per day, as said by comScore. In less than ten years, Google has become the paradigm of how a technology company is transforming complete sectors. To that extent, I use the business case “Google: Organizing Information on the Web” written by Prof. Sandra Sieber and Prof. Josep Valor in the Management Development Program (PDD) that I lecture at IESE.

Last time I gave a Google session was four weeks ago in a PDD in Santiago de Compostela. This weekend, I will have again a Google session in a PDD in Madrid. Therefore, it is a good time to google on Google to take into account the latest developments. Using Google News, I got today 32,865 entries on Google generated only in the past month. Some of the entries refer to picturesque news. For instance, the lawsuit against Google filed by Lauren Rosenberg on June 1st, seeking more than $100,000 when she was injured by a motorist while following an online  route, claiming Google Inc. supplied unsafe directions. However, the majority of these entries reflect the speed of change in the Information and Communication Technologies (ICT) sector. Let’s review four of this news:

The World is Flat”  According to comScore, Google amounted for the 64,4% of the US search market. A year ago, Google had 65% of this market. For the last decade, Google has consistently gained a point of search share a month. However, for the last 12 months Google’s search share has flatlined. This means that Google could lose the main revenue growth engine, which is based on search products (i.e., AdWords).

The Tyranny of Choice”  After Google, the second most popular engine is YouTube, which is celebrating its 5-year anniversary reaching two billion videos viewed daily. Some analysts forecast that YouTube could reach this year break even point after five years of heavy losses mainly derived from bandwidth and storage costs. One of the key factors to monetize for YouTube audience is showing its video offering in the living room. Google TV initiative (see the previous post) is framed in this strategy.

Paradoxically, one of the main challenges is that an average user spends 15 minutes in YouTube compared to the 5 hours a day spent in front of the TV. To that extent, YouTube will launched in the Fall YouTube Leanback, or an attempt to turn YouTube into a passive-consumption experience. YouTube Leanback will show an endless stream of YouTube videos, eliminating the “decision” points at the end of each short video or a new video searchs, which constitutes a potential abandonment of the site.

Google’s leading position in the ICT sector translates into a constant scrutiny by different Government Agencies. Google recently acknowledged that it had systematically collected private data since 2006 (e.g., household WiFi addresses and record of sites viewed through those WiFi stations) while building Google’s Street View, which is a technology featured in Google Maps and Google Earth that provides panoramic views from various positions along many streets in the world. Google stated that the data collection was the result of a programming error. However, this incident erodes Google’s mantra “Don’t be evil” and has opened new inquiries on privacy in Germany, Spain, France and the Czech Republic.

Stormy Weather”  “Google is the next Microsoft” is heard more often than not. Just incase,  Google has banned Microsoft Windows from internal use. The official explanation behind that decision was that security vulnerabilities of Windows caused the China hacking incident last January. However, it is more likely that constitutes another cloud battle between Microsoft and Google (see previous post), which includes the MS announcement of a free web version of MS Office 2010 (Office Web Apps) competing with Google Docs. Meanwhile, Google is already conducting “test flights” of Chrome OS (see previous post) to secure its entry point to Internet and into the Google cloud in particular.

Last week, a student said “facebook is the next Google”. Let’s wait at least four more weeks, before we replace Google… In the mean time, let’s keep googling on Google.