The Key to Google's Success

I have been looking at many startups in the networking, internet video and internet advertising areas. It occurred to me when reading Google’s (GOOG) recent financial results, and while reviewing a few companies that want to build products to narrow advertising bands for service providers of cable, telco and wireless heritage, that this is what Google has accomplished. Google developed their proprietary search algorithms for data mining, but the real brilliance seems to be how they used search to narrow advertising bands to a single unit.

I have spoken with many service provider executives as well as venture capitalists and entrepreneurs and I have read countless blogs and papers on advertising revenues and the shift from old media to new media. I think it can all be summarized by the following: the companies with broad user bases, distribution ability through content applications (i.e. video, voice, gaming, search, etc) and who have the ability to narrow advertising bands to small units, ultimately a unit of one, are the revenue winners.

As always, thoughts and comments welcome, whether private or public.

Full Disclosure: I do not own shares of any of the companies mentioned in this post.

Comments

[borisb:]

yeah. google has been trending down since friday mornings high. the downtrend line broke today. but the bounce didnt start yet. maybe this thursday or friday. i assume 490s and a breakout attempt is coming given spectacular earnings report and lagging yahoo-microsoft. the question is how long will it take for the long inventory that bought in front of the earnings to work off. last quarter it took 8 days of closing the long inventory before a bounce began, so far this is 4 days. cant wait for 500s.

2007 Apr 25 08:55 PM