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Will Google Become Another Netscape? 299

Posted by Cliff from the history-may-or-may-not-repeat-itself dept.
kaluta asks: "The Economist has a typically clear and concise story about bringing Google to the stockmarket. Basically, is it going to be the next eBay or Amazon, or will it 'simply be the next overhyped share sale to make its founders rich only to wither away miserably, either for lack of a sustainably profitable business model, or, like Netscape, because it finds itself in the path of that mighty wrecker, Microsoft?' Cool picture too."
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Will Google Become Another Netscape? More

Will Google Become Another Netscape?

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  • Wh (Score:5, Insightful)

    by turg ( 19864 ) * <turg@winston.CHEETAHorg minus cat> on Friday October 31, 2003 @06:17PM (#7363124) Journal

    This quote from the article is the key issue I think. (The IPO is rumored to be for a total of $15 billion)

    Meta Group, a consultancy, reckons that the market for paid search and other contextual advertising will grow to $5 billion by 2006. This is Google's main market opportunity (although it also gets some revenues from licensing its search technology). Currently, Google is thought to make annual profits of about $150m.

    To be worth the rumoured $15 billion for longer than it takes a bubble to burst, it will need to raise its profitability substantially. That means matching such internet stars as eBay (market capitalisation $37 billion), but without the natural-monopoly advantages that have made eBay so dominant--the classic network effect of buyers and sellers knowing they do best by all trading in one place. For Google to stay permanently ahead of other search-engine technologies is almost impossible, since it takes so little--only a bright idea by another set of geeks--to lose the lead. In contrast to a portal such as Yahoo!, which also offers customers free e-mail and other services, a pure search engine is always but a click away from losing users.

    Google is doing great, but they can't expect to dominate internet searches any more than they do. In fact, their business plan should allow for their market share in that area to decrease significantly. Each time a the next great new SE comes along, it quickly takes a big bite out of the market as Google itself has done most recently. Where might they expand their business in the future? (And how much revenue and/or profit do they need to justify a $15 billion market cap, anyway? I know it's alot more than the profit numbers in the article).

    • Re:Wh (Score:5, Interesting)

      by s00p41337h4x0r ( 696697 ) on Friday October 31, 2003 @07:18PM (#7363654)
      For Google to stay permanently ahead of other search-engine technologies is almost impossible, since it takes so little--only a bright idea by another set of geeks--to lose the lead.

      Unconvincing. Search engines these days tailor their search results based on user input. The fact that Google is the market leader by such a large margin means that it has much more click-through data. It can use this advantage to return better tuned or more timely results. People's queries tell google what is currently interesting and important. [google.com] NeoSearchEngine X doesn't have that same advantage.

      They bought Blogger for the same reason. People hand Google information daily for which Your Friendly Marketting Division would kill.

      • Re:Wh (Score:5, Insightful)

        by gad_zuki! ( 70830 ) on Friday October 31, 2003 @11:36PM (#7365018)
        >Unconvincing.

        About as unconvcing as it for altavista, eh? Search engine tech isn't that complex and right now alltheweb.com is google's #1 competitor. Google is a powerful brand, but as we've seen with Netscape that doesn't mean much in the changing IT landscape.

        There are lots of google specific complaints. Like ranking blogs too high, ignoring words like 'who' and 'what' by default, pagerank isn't as hot as it used to be, etc.

        There's plenty of room for competition and google's seat as search engine leader is not guaranteed the same way Microsoft may not be the desktop OS leader in the next 5-10 years. Plausible but not guaranteed.
    • blink

      There are other search engines?

    • Netcape: bad example (Score:3, Insightful)

      by t0ny ( 590331 )
      or, like Netscape, because it finds itself in the path of that mighty wrecker, Microsoft?

      Netscape's problem wasnt MS. If they had put out a better product (more stable, mostly), they could have retained their lead. I personally switched because I was tired of Netscape crashing every five minutes, and taking all my other browser windows with it.

      Add to that its unwillingness to use many of the Windows-native APIs (printing is a good example), and you have a recipe for disaster. MS built those APIs for

  • As long as (Score:5, Insightful)

    by Pingular ( 670773 ) on Friday October 31, 2003 @06:18PM (#7363133)
    it still provides a good search engine with no ads it can't become another Netscape. If it becomes too bloated on the main search engine page it'll still be a good search engine. However, if they change the search engine code so much that it no longer functions efficiently and smoothly without problems (the way it does now), it may become a failure.
    • Exactly. What is the Economist saying?

      "Google is going public, just like another company once did! Are they that company?"

      Uh, why would they be Netscape?

    • Re:As long as (Score:5, Insightful)

      by turg ( 19864 ) * <turg@winston.CHEETAHorg minus cat> on Friday October 31, 2003 @06:41PM (#7363321) Journal
      it still provides a good search engine with no ads it can't become another Netscape. If it becomes too bloated on the main search engine page it'll still be a good search engine. However, if they change the search engine code so much that it no longer functions efficiently and smoothly without problems (the way it does now), it may become a failure.

      The issue isn't the quality of the product. Even if you have the best product in the world, it's still possible for your stock to be overvalued. The rumored market cap of the IPO values Google at far more than what the their current value based on their current revenue/profit (as estimated by outsiders). If they want to not become another Netscape (in terms of business failure, not product quality) they'll need to grow the company by several times to match the value of the IPO. This means they need to get into new areas of business because they're already the king of Internet search, they can't dominate it much more than they do (no where to go but down -- I'm talking market share, not product quality). This too sounds like the road Netscape was on not so long ago.

  • Not another Netscape (Score:5, Insightful)

    by mao che minh ( 611166 ) on Friday October 31, 2003 @06:19PM (#7363137) Journal
    Google is so immensely popular, it is practically "a must" for most web surfers now. It is hard to imagine Google losing advertisers any time soon, and easy to see Google using its new money to pioneer further innovations. In the least, you would expect Google to expand more into other markets, with a portal like Yahoo, more appliances, or even web hosting (host on Google, get a bump in your search rating?).

    • Comment removed (Score:5, Insightful)

      by account_deleted ( 4530225 ) on Friday October 31, 2003 @06:21PM (#7363156)
      Comment removed based on user account deletion
      • google can never lost all of it's attraction as it has an invaluable amount of usenet information archived and allows easy posting/searching of newsgroups.

    • Re:Not another Netscape (Score:5, Insightful)

      by MisterFancypants ( 615129 ) on Friday October 31, 2003 @06:24PM (#7363191)
      Google is so immensely popular, it is practically "a must" for most web surfers now.

      I think Google is in a great position and will be around for a long time, but your basic argument isn't that sound based on history.

      Back in the 2.0 browser days, something like 98% of all browsers were Netscape. They were more popular as a browser than even the mighty Google is as a search engine, and were without a doubt considered "a must".

      Google's current popularity alone isn't enough to keep it on top, just like Netscape's wasn't. However, I do think Google will continue to thrive since unlike Netscape they aren't making business mistake after business mistake...

      • Re:Not another Netscape (Score:5, Insightful)

        by fupeg ( 653970 ) on Friday October 31, 2003 @06:54PM (#7363448)
        This is not a good comparison. During the "2.0 browser days" there were what, maybe a couple million people online worldwide? Many of those people were at colleges or were in technical fields. So the "dominance" of Netscape was really paper thin. Most households were not online and had no idea about Netscape (did they even have computers?) When the net took off, Microsoft had established IE and all those people buying new computers already found IE on the computer, as the only browser.

        Right now there are already hundreds of millions of people using Google. Maybe their percentage of the market is not as high as Netscape's was, but the number of people using it is much higher and it is known by everybody from kids to grandparents.

        If Microsoft were to kill Google now, it would be like if he they had waited until 1999 to come out with IE and then killed Netscape. Acutally it would be more like if they had waited until 1999, and Netscape had come out with Firebird in 1998... There's really no chance of them killing Google, unless Google does some really stupid things (very possible with them going public and having to constantly fret about "profit growth.") Integrating a search engine into Longhorn is a worthless measure, given that Longhorn won't be out until 2006. Coming out with a search engine of their own that is just as good as Google (which isn't going to happen because MS will always distort results [msn.com]) won't matter either because of Google being so established already. They have to come out with something that is better than Google. Maybe a search engine that weeds out things like porn, blogs, etc. ? Microsoft does not have a history of innovation, so this seems unlikely.
      • True, but then again the problem with Netscape was the same problem of many of the Dot-Bombs: they had their IPO before they had an established, successful business model.

        If I remember correctly, doesn't Google operate in the black? It seems to me that they already have an established, workable revenue stream whereas Netscape was never able to make money selling copies of their browser and webserver sales weren't hacking it either.
    • host on Google, get a bump in your search rating?

      That would go against Google's entire philosophy. They have always marketed their search as unbiased, and that would definately make the search biased. I don't think it would make people leave Google in droves, but it would probably make a lot of people more open to trying a different search engine.
    • Google is so immensely popular, it is practically "a must" for most web surfers now.
      You mean like Netscape used to be?

    • Re:Not another Netscape (Score:2, Insightful)

      by Anonymous Coward
      As popular as Google is, users will bail if (as the article says) a better prospect emerges. I was loyal to Yahoo! (searching used to mean "doing a Yahoo! search,") but switched for Google's better performance and design.

      I also used to love Hotmail and Webchat Broadcasting System until M$ and Disney destroyed them.

      There ain't nothing sacred. Not even Google.

    • Re:Not another Netscape (Score:5, Insightful)

      by timeOday ( 582209 ) on Friday October 31, 2003 @09:01PM (#7364341)
      In the least, you would expect Google to expand more into other markets, with a portal like Yahoo, more appliances, or even web hosting (host on Google, get a bump in your search rating?).
      This is the problem... a private company making a nice profit in a certain sized market goes public. Suddenly they have tons of money to spend on growing the business - somehow or other - even if they didn't really need the investment money in the first place. So they go off a spend a lot of money on a "Portal" or some other useless money waster that nobody wants (remember @home?) and pretty soon their bloated company can't be supported by their real business anymore. So they do desparate crap that ruins their core business and end up being bought out.

  • No IPO (Score:5, Insightful)

    by navyrain ( 171256 ) * on Friday October 31, 2003 @06:19PM (#7363140)
    I'd like to see google stay small and private. An IPO opens google up to stockholder pressures, and all sorts of not-good things. Besides, part of the appeal of google, at least for me, is that it is lean and has few ties, obligations, or partnerships with EvilCorportations.

    • Re:No IPO (Score:3, Insightful)

      by ad0gg ( 594412 )
      Problem is their VCs want their money back plus profit, and the quickest way is to go public.
    • Well those people who pretend to like google will demand dividends (aka free money), and google will be forced to use more obtrusive advertising. Their hits will quickly vanish, and poof.
    • Right! Stockholders don't know a thing about optimizing a search engine, or UI usability. They just know that they spent money to own stock, and now they want MORE MONEY. There is no better way to ruin a company technically than by going public.

    • Re:No IPO (Score:5, Insightful)

      by swillden ( 191260 ) * <shawn-ds@willden.org> on Friday October 31, 2003 @10:40PM (#7364830) Journal

      I'd like to see google stay small and private. An IPO opens google up to stockholder pressures, and all sorts of not-good things. Besides, part of the appeal of google, at least for me, is that it is lean and has few ties, obligations, or partnerships with EvilCorportations.

      Stockholder pressures, EvilCorp ties, loss of purity, goodness and light...

      Bah. Typical /. silliness.

      What I'd like to know is... what is the *business* case for an IPO. Wads of cash for the founders and VC investors is not a business case. The purpose of an IPO is to raise cash that's needed for expansion. When a growing business finds itself in a position that if they only had $X million to invest, they could easily make $X*Y million, an IPO can be a good way to come up with the cash in order to generate the returns.

      What does Google need cash for? What are they going to spend it on, and, more importantly, how is that investment going to generate a return? It looks to me like Google dominates their space, has a great brand, and is turning a pretty profit. They don't have any obvious directions for expansion, and they're well-equipped to finance the growth needed to keep ahead of their industry out of profits.

      Unless they can provide a business case for an IPO, they're just hoping to create a bubble and extract a bunch of money from foolish investors. If they can pull it off, the current owners will make a lot of money, but such fraud is hardly the best way to build a sustainable business.

  • Google holds way too much power. MS buying them would taint the brand and encourage people to seek out alternatives, which have been busy narrowing the usability gap. Diversity in the search engine space would be a very welcome development.

    • Re:MS buying Google would be the best (Score:4, Insightful)

      by chmod_localhost ( 718125 ) on Friday October 31, 2003 @06:22PM (#7363171) Journal

      Geeks like Google because it doesn't try to do too much for them. Mundanes will probably like a super-powered MSN search because it will do everything for them. The best part is that there is room for both mindsets. Just as IE coming with windows does not prevent people from installing Mozilla or some other browser and using it nigh-exclusively (MSNM client, for example, still runs iexplore explicitly, rather than using the system's default browser) MSN search being the default will not stop you from using Google. Especially if you don't use IE. The fact that IE will be ever more closely tied to the OS in no way changes this.

      I don't use MSN search at all any more. Even on the rare occasion I'm using IE (usually at school) and I somehow end up with MSN search results, I don't even look at them any more, I just close them and visit google. Or retype my URL :)

    • Because it just may happen [nytimes.com]

      I personally have trust in Google for right now. As long as they don't violate that trust, I'll use them. If they do, I'll seek other alternatives. Google got its audience through word of mouth. They can also lose it through word of mouth.

      • Re:Be careful for what you wish for (Score:5, Interesting)

        by corebreech ( 469871 ) on Friday October 31, 2003 @06:33PM (#7363262) Journal
        I personally have trust in Google for right now.

        I have next to none. I have firsthand experience with how they treat objectionable content... they simply refuse to index it.

        I have a site that I haven't even bothered working on anymore because of this: holocaustnow.org. Shortly after it was first created, I was both indexed on Google and archived in the WayBackMachine [archive.org].

        Then, about three months later, I was dropped from both sites. Queries to both organizations went unanswered. Subsequent attempts to have the site re-indexed proved futile.

        It can't be an issue with the virtual hosting my service provider uses since Google had indexed it in the past.

        And why the WayBackMachine would ever deign to remove something it has already archived makes no sense to me whatsoever.

        So I am eagerly awaiting the day when Google falls. I see now that altavista is willing to index the site; this is giving me the incentive to come out with the badly needed version 2. The more diversity there is, the less likely the new Google's will try pulling shit like this.
        • Perhaps your hosting provider added a robots.txt file that prevents your site from being indexed?
          • The robots.txt file has to be located in the root directory, yes? I never created such a file, and re-checking now I see no such file exists.

            Can a hosting provider create a robots.txt file outside of my control?

            • Re:Be careful for what you wish for (Score:5, Informative)

              by Corgha ( 60478 ) on Friday October 31, 2003 @07:37PM (#7363794)
              Can a hosting provider create a robots.txt file outside of my control?

              Well, yeah, they can do whatever the hell they want (though some things might alienate their customers). Keep in mind that your hosting provider could also just have firewalled away the Google crawlers. They can also try to block them by User-Agent, but just I checked and they don't appear to be doing the latter. From the looks of it, they're not that competent, anyway.

              re-checking now I see no such file exists

              That's not what your web server says, according to the HTTP protocol it claims to be following.

              When I request http://www.holocaustnow.org/robots.txt, I get a 302 redirect to http://64.202.166.210/index.html, which returns 200 but says "Page Not Found" in the text (it should return 404 if it means to say "Page Not Found").

              That is silly, and non-standards-compliant behavior, and the resulting page is totally unparsable as a robots.txt file. Basically your web hosting provider is saying to the robot that robots.txt does exist, but it's over there, and its a big blob of incomprehensible HTML.

              Now, of course, I don't know for sure, but I wouldn't be surprised if well-behaved robots (i.e. not grub) found this behavior to be confusing, and decided therefore not to index the site just to be safe and avoid stepping on any toes.
              • Damn.

                So the scenario is this... my hosting provider once upon a time returns a 404 on robots.txt, Google says "OK, I can index the site", and so it does. And I see that it's indexed it, and all is right in the world.

                Then my piece-of-shit hosting provider decides to redirect everything that doesn't exist to their piece-of-shit "page not found" page, and Google says "fuck this."

                But because I'm a dumbass and I don't know what's going on, and because this happens at almost the same time as the WayBackMachin

        • Re:Be careful for what you wish for (Score:3, Funny)

          by Anonymous Coward
          I`ve just been to your site. Here`s a choice quote -

          Can we be certain that marijuana is the cure for cancer? No, but we can't say it isn't either

          Erm, yes we can. You`ve restored my faith in Google. Keep saving up for that brain transplant pal.
    • Google holds no power. It's a search engine you can choose to use, or choose not to use. Until it is the ONLY search engine out there, it has no power at all. Where, pray tell, is the power of Yahoo! Or Dogpile? Or any of the other search engines out there?
      • That's like saying The New York Times or Fox News holds no power because we can go elsewhere for our news.

        Of course they hold power. They can control what millions of people read and see.

        Just like Google.

        Maybe you were referring to absolute power?
    • I find it hugely ironic that you suggest MS's purchase of Google would be good for diversity in search engine technologies. MS would use Google's strength to cement themselves in the front position of yet another technology, helping to maintain the already existing monopoly held in other areas.
      • I agree, MS buying Google would enhance MS's power.

        The enormous power wielded by the search engine makes me willing to make that trade though, if it sees Google become weaker as a result.

        You have to read reply posted earlier [slashdot.org] to see where I'm coming from.

        Then consider that the ability to censor results is but one aspect of the power they wield. As has been reported here before [slashdot.org], Google has all kinds of opportunities to exploit their very unique position, and to our detriment.

  • The Irony (Score:5, Funny)

    by Shadow Wrought ( 586631 ) <shadow.wrought@g ... minus herbivore> on Friday October 31, 2003 @06:19PM (#7363147) Homepage Journal
    Ah yes, a search engine company attempting to "find" itself. Maybe they could just goo... never mind.
    • Hmm...

      "Did you mean: microsoft"

      "To google yourself, you must look within, sayeth the Oracle (c)"
    • Interesting you would mention that. (finding itself) I wonder how long will it be before a major class action lawsuit is taken against google for mining too much information. See I'm all for openess, but at the same time I'm all for privacy (catch22). (I believe nothing should be held secretive, but at the right time I'm a pro privacy buff.)

      So the other day I was bored and googled my parents (who don't use comps) and was amused to find information about them. This is kind of sad considering that, not every

  • I Don't Think Microsoft Is This Issue (Score:5, Insightful)

    by Anonymous Coward on Friday October 31, 2003 @06:19PM (#7363150)
    The real problem is it being overvalued.

    From what I've read they're going to generate anywhere from 20 to 45 billion during the IPO. How can a company that relies on ad revenue and provides only a search engine (albeit a very good one) be worth that much?

    • Re:I Don't Think Microsoft Is This Issue (Score:5, Insightful)

      by Blimey85 ( 609949 ) on Friday October 31, 2003 @09:24PM (#7364457)
      That's not all they offer. They have deals with other companies in which they lease their results as well as the technology behind those results. An IPO price usually isn't way off the mark.. ok, it's off the mark some, but not this much so I think there is a lot we don't know about Google or we're not seeing the forest for the trees. We know that Google has their search page. They have several actually. Web search, news group search, image search, etc. They also have enterprise products like their search appliance [google.com].

      They are also actively researching and developing new and innovative technologies and expanding their existing technologies. It's not like they are sitting around doing nothing. "Hey, we've got a pretty good search engine... lets sit around and get drunk now.. our work is done." It's not like that at all.

      The reality is that the greater Google's technologies and services become, the faster and harder they work on newer and more exciting innovations. I don't see them like most companies. To me it seems like the people who are employed by Google love their jobs and the more they accomplish, the more motivated they become. Don't think of Google being in 5 years what it is today. It will grow exponentially and continue to impress and amaze us like it has done. Google isn't Yahoo, Netscape, or any of the other thousands of companies who have at one time dominated but let it all slip away. They are like MS. They are in the lead and that's not going to change.

  • IPO=Death? (Score:5, Interesting)

    by chmod_localhost ( 718125 ) on Friday October 31, 2003 @06:20PM (#7363152) Journal
    It actually depends on the expectations of the shareholders, if an IPO leads to the death of a company. Normally a company is expected to be worth a certain multiple of its earnings (or better, the cashflow, because cashflow is difficult to forge). A normal multiple would be 10, which gives me a 10% return rate (I buy the company for 100 and get 10 out of it every year). If google has USD 100 Mio of earnings, it's worth would be USD 1000 Mio, if valued this way. This of course would be a fair value, because it enables them to pay their investors an annual dividend of 10% of the stock price, even without any growth. In this scenario, they could stay in their search-engine-business, something they can (obviously) handle successful. The problem is, google will not aim at a valuation of one billion, they will aim at a valuation that is about ten times higher. And that means, they will have to grow a lot in a short time, something that will propably kill them.

    • Re:IPO=Death? (Score:4, Interesting)

      by tarzan353 ( 246515 ) on Friday October 31, 2003 @06:24PM (#7363195)
      By becoming public, google loses the ability to continue with constant steady growth and innovative R&D. These things will invariably lead to short sighted planning by the management to "make the numbers" for the next quarter, 6 months, or year. "Growth" will be expected year after year - the innovative ideas that have made google so successful will give way.

      No, I won't bid on a share. I would hope that the IPO never happens, as google is still a quality company. I would hate to see that all change.
      • how does going public make them lose that ability?

        they don't HAVE TO do business(and arrange things) just to make the numbers look good(doing business in that fashion is not good in the long term).

        they can just use the ipo as a way to raise money for investments(which is what selling stock is for...).

    • This is the worst example of amateur economics I've seen in awhile. The most common measure of how expensive a stock is, is its price-to-earnings ration (P/E). The historical P/E for the S&P 500 (the 500 most valuable companies at any time) is about 20 [systemsandforecasts.com], but has generally increased over time (more people can buy stock, thus more demand, higher premium.) For tech companies, with their high growth potential, the value is usually more like 25-35. Yahoo's P/E is currently at 130, eBay's is 92, Intel's is 48
  • .... and contact Archive.org [archive.org]

  • Mod up the coward!!! (Score:5, Insightful)

    by Anonymous Coward on Friday October 31, 2003 @06:21PM (#7363160)
    Google is now more than a business: it is a cultural phenomenon. But where will it be in a few years?

    IF THE ultimate measure of impact is to have one's name become a new verb in the world's main languages, Google has reason to be proud. When they founded the company five years ago, Sergey Brin and Larry Page, friends at Stanford University, chose a word play on "googol"--the number 1 followed by 100 zeros--because their ambition was to organise the information overload of the internet in a transparent and superior way. These days, singles "google" suitors before agreeing to a date, housewives "google" recipes before cooking, and patients "google" their ailments before visiting doctors. Dave Gorman, a comedian, even has a popular show, the "Googlewhack Adventure"--a Googlewhack being what happens when two words are entered into Google and it comes back with exactly one match.

    As search engines go, in other words, Google has clearly been a runaway success. Not only is its own site the most popular for search on the web, but it also powers the search engines of major portals, such as Yahoo! and AOL. All told, 75% of referrals to websites now originate from Google's algorithms. That is power.

    For some time now, Google's board (which includes two of Silicon Valley's best-known venture capitalists, John Doerr of Kleiner Perkins Caufield & Byers and Michael Moritz of Sequoia Capital) has been deliberating how to translate that power into money. They appear to have decided to bring Google to the stockmarket next spring. Bankers have been overheard estimating Google's value at $15 billion or more. That could make Google Silicon Valley's first hot IPO since the dotcom bust, and perhaps its biggest ever.
    Will Google go public?
    Feb 21st 2002

    That alone is enough to have some sceptics whispering "Netscape". Now that the worst of the dotcom hangover is clearing, they wonder, will Google become one of the few valuable internet survivors, joining Amazon and above all eBay? Or will it simply be the next overhyped share sale to make its founders rich only to wither away miserably, either for lack of a sustainably profitable business model, or, like Netscape, because it finds itself in the path of that mighty wrecker, Microsoft?

    The search for profits

    Google, naturally, is determined to avoid Netscape's fate at all costs. This was why it made Eric Schmidt its chief executive in 2001. Mr Schmidt was 46 at the time--Messrs Brin and Page were in their twenties--and was the boss of Novell, a software firm decimated by Microsoft but given another lease of life under his leadership. He seemed suitably "adult" to turn Google into a money-making machine.

    Mr Schmidt understood that the key to monetising all those customer searches (now 200m a day) was to place small, unobtrusive and highly relevant text advertisements alongside Google's search results. Advertisers like this system because they pay only if web surfers actually click on their links. And consumers either do not mind, or even learn to love these commercial links for their relevance, just as they appreciate the Yellow Pages.

    Google did not pioneer this "paid search" advertising. That honour falls to Overture, a Californian firm bought this year by Yahoo! which still has about half of the $2 billion-or-so market. Nor did Google's founders readily embrace the concept. Mr Page was once heard to say at a trade show that commercial exploitation was "bastardising" the search industry. Mr Schmidt made the concept uncontroversial at Google, thereby helping paid search to become the fastest growing part of the advertising industry today.

    The next step is to take this approach to advertising from the results pages of search engines and on to other web pages. Increasingly, web publishers--from hobby bloggers to small businesses--allow firms such as Google to crawl through the content of their pages and place relevant text advertisements in the right margin. Once page visitors click on the links, the webmasters share
  • Although 'The Economist' can be thought provoking [good thing] its economic analysis is trash [bad thing] - articles brush over facts, present dodgy one sided (and often politically biased) analysis and present conclusions as fact. So draw your own opinions from the article but do not take anything from The Economist served on a plate.

    • Although economists can be thought provoking [good thing] their economic analysis is often trash [bad thing] - economists brush over facts, present dodgy one sided (and often politically biased) analysis and present conclusions as fact. So draw your own opinions but do not take anything from economists served on a plate.

      I say this because most economists are statist keynesian trained seals.

    • I completely agree. I usually like the Economist, because it does not work under the assumption that its readers are stupid (which is true for most popular printed publications nowadays).

      However there are several issues, most having to deal with international investment and banking, where the Economist is so biased it can not be trusted at all.

  • Why don't we ask google? (Score:5, Interesting)

    by XaXXon ( 202882 ) <xaxxon&gmail,com> on Friday October 31, 2003 @06:24PM (#7363185) Homepage
    define google [google.com] -- look at the top listing where it says: Web Definition.

    Google has a couple neat things I never knew about like definitions..
    define linux [google.com]
    define irc [google.com]

    It also has a calculator and unit converter:
    1.21 GW / 88 mph [google.com]

    1 parsec in lightyears [google.com]

  • Universal access Google vs Private access (Score:3, Insightful)

    by luckylindy ( 719051 ) on Friday October 31, 2003 @06:25PM (#7363198) Journal
    I think that it is inevitable that Google will be swallowed up by MS for the simple reason that Google has a terrific hardware/software search asset and MS has 50 Billion Dollars. This will cause other services companies such as AOL and Apple to devise cluster computing farms of their own to provide internet search and data computing services. After Google gets swallowed another of the many search engines in the market will try to become top dog but the internet will become more and more of a .NET internet and everyone else comes third. Eventually their will be a MS/Intel internet and everyone else. Somewhere along there I will no longer have much interest in using the internet anymore as it will resemble the great wasteland of repeating garbage that now describes television and radio.
  • that Google will become another Netscape is if Microsoft abuses their desktop monopoly to force them out of business.

    The real question here is if the DOJ will make MS allow other search engines to be used in Windows in place of MSN sort of like what they are supposed to be doing with web browsers, etc. in Windows right now.

  • I doubt it... (Score:2, Interesting)

    by wrinkledshirt ( 228541 )
    My own two cents on why it won't happen.

    Microsoft hasn't been a big enough fast-follower to take over Google's stranglehold. Microsoft was quick enough to get a browser out there while the internet was still in the process of popularizing itself.

    Given that you can get search results from Microsoft's website content quicker through Google than through Microsoft's own search engine, I think it's too late for them to edge Google out short of buying it.
    • I agree. I feel that this situation is much more akin to the MS Money/Intuit battle. MS tried to buy Intuit because it was the cheaper way of getting a leading Money Management program. They failed in their bid to purchase them, and still Quicken is the defacto standard ahead of MS Money many years after the fact. If MS fails in purchasing Google (they will unless the manage some insane hostile bid), the same story will repeat itself, they are too far behind to develop something that will compete.

  • I could have told you that! (Score:4, Funny)

    by batura ( 651273 ) on Friday October 31, 2003 @06:27PM (#7363207)
    Paraphrase: "Its going to be a success or failure"

    No shit, Sherlock

  • Netscape vs Intuit or AOL... (Score:3)

    by namespan ( 225296 ) <namespan.elitemail@org> on Friday October 31, 2003 @06:27PM (#7363216) Journal
    If you're going to frame this as an "on the one hand" and "on the other hand" situation, Netscape vs Ebay or Amazon is wrong. It should either be:

    Webvan/Dr. Koop vs Ebay or Amazon (web companies with viable models vs web companies w/o viable models)

    or

    Netscape vs Intuit (people who got in the path of Microsoft and were destroyed vs people who got in the path of Microsoft and did just fine)

    The two axes are totally orthogonal -- all kinds of combinations are possible.

    I think it's safe to say that Google has a viable basic model: provide high-quality search, sell placed ads. It works. So the questions should really be: are they going to make stupid mistakes while being crushed by pressure from Microsoft, like Netscape, or are they going to keep their lead, like Intuit, who's resisted all attempts to be destroyed by MS?

    My prediction: if the smart people stay running it, they'll stay ahead of MS. This is where the IPO comes in: in a public company, majority shareholders can take control and replace the smart folks with someone else who they think will do the job more like they'd like it. And it's easy to see what could happen then...

  • Google's business model is like eBay (Score:5, Interesting)

    by Baric ( 681935 ) on Friday October 31, 2003 @06:29PM (#7363233)
    One reason eBay survived the dot-com crash was because their particular business model thrived on a large, centralized system. This creates significant entry barriers for other auction websites.

    Google is the same way and they are expanding the breadth of their content like Amazon. If you want to find something on the web, newsgroups or news, you go to Google first.

    I don't see how anyone else can easily overcome the economies of scale that Google has already attained.

    Is Howard Dean's candidacy doomed? [dailykos.com]

    • 1) Buy them
      2) Purposedly make some dumb decisions.
      3) Close them down as "unprofitable".

      Imagine Google putting pop-up ads, requiring registration and agreement to send spam to your home address, puting multiple (50+) "paid hits" on top, requiring you to install spyware (now googlebar is optional ;), allowing The One OS, would you keep using it? And with MS buying it, it would sound a probable thing to happen.
    • No, eBay has the advantatge of network effects--I want to go to the auction site which everyone else uses, but I don't really care if I use the same search engine that everyone else does, as long as it works.
    • I don't see how anyone else can easily overcome the economies of scale that Google has already attained.

      Economics of scale for Google? You mean when there are more searches they are cheaper?

      Google is the same way and they are expanding the breadth of their content like Amazon.

      They are expanding the Web? Or do you mean the river?

      You must be smoking some good stuff, man.

  • Google search: Apple (Score:5, Funny)

    by RigMonkey ( 700122 ) on Friday October 31, 2003 @06:31PM (#7363243)
    Your search - Apple - did not match any documents.
    No pages were found containing "Apple".

    Did you mean "Microsoft"?

  • Being in MS's sights (Score:3, Redundant)

    by Rathian ( 187923 ) on Friday October 31, 2003 @06:33PM (#7363263)
    Depending on how Google plays it, they could still do quite well.

    Netscape lost their position because MS not only integrated IE into the OS, but also because Netscape 3-4.x series was unmanageable spaghetti code, resulting in an inferior product. IE during that time made matters worse because it was improving in leaps and bounds. Sadly if only that last part were still true...

    If Google wants to keep the crown against the likes of MS, they are going to have to fight hard, fight well, and never rest on their laurels. They're also likely going to have to play some hardball with MS too - keep in mind MS has not only the OS and browser, but also content sites such as MSNBC and a number of others.

    Either way Google folks, best of luck to you!
  • As I read slashdot inside of epiphany, a variation of Mozilla, grandson of Netscape I ponder. A Google implosion that would result in the code being freely distributed and a 1,000 Google's across the net. You could even have a personal Google on your computer.

    Dateline 2007: Girlfriend and you having a fight about something. She goes over to the computer and searchs for something you've carefully erased but the cache is still there! (*)&(*&#@$!

    Note: this is "funny" not "troll" and no, personally
    • How about a "-1 Uninformed" instead
      • Umm, how is it Uninformed? I believe I gave a fairly acurate description of what epiphany was and I thought I made it fairly clear in the post that it was intended as a joke? I even stated at the end of the post that I didn't want to see google IPO as I consider them too great an asset. Its a post on slashdot to be funny, not my Doctoral Thesis.

  • Less is more (Score:5, Insightful)

    by Shazow ( 263582 ) <{andrey.petrov} {at} {shazow.net}> on Friday October 31, 2003 @06:39PM (#7363304) Homepage
    In contrast to a portal such as Yahoo!, which also offers customers free e-mail and other services, a pure search engine is always but a click away from losing users.
    I don't know about everyone else but the main reason I use Google instead of the dozens of other search engines is because it gives me what I need. Nothing more, nothing less.

    If I wanted free email, I go get free email. If I want to play java games, I go play java games. If I want to read news, I go read news. If I want to search the net, I search google. :D

    It's simple, plain, and to the point. Sure, it has a bunch of features-in-testing that are full of maybe less than useful, but it still keeps the Search Engine aspect of Google a priority.

    A logo, text input box and a couple of buttons is all it takes.

    I will keep using Google unless it starts cluttering itself up with too many useless features on its front page.

    - shazow

    • Re:Less is more (Score:3, Interesting)

      by bluGill ( 862 )

      Better yet, google has added features without adding clutter. I use google groups once in a while. They have a bunch of other things you can search too. All without losing focus adding things like email that have nothing to do with their buisness.

      I'm not google locked. I switched to Google long after most people when I could no longer take the lack of results from Alta-vista. I would have swtiched soon, but all my bookmarks were there, and I'm lazy. If google starts doing baddly I'll switch to some

    • Tough words. Do you have anything even resembling an alternative?

  • How do people hold out for so long? (Score:4, Insightful)

    by swb ( 14022 ) on Friday October 31, 2003 @06:43PM (#7363337)
    ...when they're making the kind of money even Google makes? The two founders of Google must be making several million dollars a year (if Google's profits of $150M a year are accurate).

    I'd collect $10-20 and then go find something *interesting* to do. I'm sure running google would be interesting, but there's a whole huge world out there to be enjoyed, and $20M would make it very interesting indeed.
    • It's all about the IPO. That's where a company raises cash. There is a lot less info about a new company that is just opening up its books (as much as required by the SEC) so it's like attaching a random multiplier to its value. Let's call this multiplier The Hype Multiplier (THM.) THM was >> 1 from 1997-2000, but was close to 0 from 2001-2003. It would have been stupid for Google to go public during that time, because they would have raised less cash than they "should" have. Now THM > 1 once again

  • Do you really think Amazon is comparable to eBay? (Score:4, Interesting)

    by unassimilatible ( 225662 ) on Friday October 31, 2003 @06:44PM (#7363343) Journal
    is it going to be the next eBay or Amazon

    eBay has been a resounding financial success from day one, just incredible. You can't say that about Amazon, whose foray into profitability is somewhat recent, and nowhere near eBay's margins.

  • Yahoo not a "sure thing" as a rival (Score:4, Insightful)

    by Rikardon ( 116190 ) on Friday October 31, 2003 @06:48PM (#7363382)

    From the article:

    Yahoo! now has under its own roof all the elements of the business model that made Google such a success. It cannot be long before Yahoo! turns from a lucrative customer of Google's into a powerful rival.

    Yes, except the one element that matters most: the relevance of the search results it returns. It's what makes Google's paid AdWords useful instead of annoying: at Google, even the ad results are (usually) relevant! If Yahoo can't match Google's relevance, people will still have a better experience going to Google. No matter that Yahoo has a competitive "pay to place relevant ads" service.

    Actually, they'll probably have to do significantly better than Google. Teoma, as someone pointed out here yesterday(?), is nearly as good as Google at returning relevant results, yet it remains a niche player because "almost as good" or even "just as good" doesn't give people a compelling reason to switch.


  • is it going to be the next eBay or Amazon, or will it 'simply be the next overhyped share sale to make its founders rich only to wither away miserably, either for lack of a sustainably profitable business model, or, like Netscape, because it finds itself in the path of that mighty wrecker, Microsoft?'


    So, either Google will be successful in the long term... or it won't. ;)
  • If you're interested, parallel article [business2.com] from business 2.0, from a month or so ago.
  • Even before Deja was acquired by Google I was willing to pay a subscription fee for access. Deja's (now Google's) technical USENET/newsgroup archives alone are invaluable and will only grow in value as time goes on. So part of their new business model can be a subscription system.

  • Profitable business model? (Score:5, Insightful)

    by localghost ( 659616 ) <dleblanc@gmail.com> on Friday October 31, 2003 @07:39PM (#7363811)
    How about the Google text ads? A lot of sites, slashdot being one of them, run these ads. Instead of a banner, you get 3-4 text ads that use Google magic (tm) to make them relevant to the content of the page. These are the only ads I ever click on, since these are the only ads that ever have anything to do with that I'm doing. As far as I know, Google is the only company that provides context sensitive ads. Running ads that people will actually click on seems like a very good way to make money. Plus Google also provides fee services to large companies, and they keep adding new stuff all the time. As long as Google remains as innovative as they have been, they'll last a very long time.

  • mmmm... Thats a tough call... (Score:4, Interesting)

    by greymond ( 539980 ) on Friday October 31, 2003 @08:32PM (#7364180) Homepage Journal
    Netscape has a long and sad story, a company that once made the worlds number 1 browser and supported a lot of (at the time) cool features, made a mail program, and also a html wysiwyg editor. Then MS decided to improve IE. Then MS include IE in Windows. Then MS decided to make IE part of Windows and at the same time Netscape decided to stop improving Netscape to compete and now IE is really the number one browser for Windows and Apple machines (although Safari is coming along nicely on the Apple side) Now Netscape is just kinda like a lost cause a portal without any of the subscribers companies lie Yahoo have.

    Google on the other hand doens't make a browser. They are a search engine with a minimalistic interface and a tons of great abilities and scalability to their service. MS doesn't really compete YET - i'm sure they do have plans too since they want to rule the world. Still Google makes it's money from 1) companies buying ad space and 2) companies buying it's technology to use for inhouse - Netscape sold a browser, which eventually wasn't worth $20

    Will Google's search software continue to be worth whatever their price is? MS, IBM, Oracle, all make DB's and compete, but they aren't going to put eachother out of business because IBM and Oracle continue to make a better product - if Oracle decided not to update after 10g after 4 years they would be gone - a victim to whatever MS and IBM had come out with.

    (yes Netscape did update, but they didn't have the stability, features, or function with websites that IE now has...

  • Money is a weakness (in this context) (Score:3, Interesting)

    by Pflipp ( 130638 ) on Friday October 31, 2003 @08:38PM (#7364217)
    Funny how Microsoft has the potential of crushing and/ or "embrace, extend and take over" anything that's worth big bucks, but that it has no power over el-cheapo stuff, which is probably also the reason why M$ has to use the "anti-capitalistic behaviour" dogma too often.

    "Free as in GNU" is just an extreme example, however, as shareware is just as uncruncheable to Big Mic. The secret is the money required to run the battle. M$ has an awful lot of money to burn, but that's nothing compared to being able to run the battle without any money at all, if needed.

    I can't imagine Google not requiring an awful lot of money to run. Think about it: while webhosts still bills at the Mbit and Mbyte, Google seems to have no problem to store a complete, indexed local copy of just about the entire 'net. I mean, for crying out loud, why shouldn't we all just host our website in Google's cache? (Hey, that's not a bad idea at all :-)

    Anyway, now maybe if we're able to P2Pize/ SETIze google, so that every search is traded for some caching and calculation power (or something like that), maybe we can reduce the total cost of running the best indexer in the world to a number too low for Microsoft to catch and crunch. Just imagine the costs of maintenance to be reduced to paying a webhost and do some volunteer programming :-)

  • Anyone remember Altavista? (Score:3, Insightful)

    by ducomputergeek ( 595742 ) on Saturday November 01, 2003 @12:48AM (#7365241)
    Back in the late 1990's Altavista was king of the search engine. Then Google came along a replaced it as king of the hill. I don't even remember if Altavista is still around, but the point is, it won't take much to replace it.

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