By Carl HoweAs we're waiting for Google (GOOG) to report earnings today, I got to thinking about how my perception of the company has changed over the years. When I first started using Google as a researcher and Web hosting manager at Bolt Beranek and Newman (BBN) in 1995, I thought Google was just a really nice Stanford project to find Internet data. Yet, day by day over the past 12 years, Google has continued to build more projects and services that are as much a part of the Internet life as breathing. Today, I think there's a much better way to think about Google, both as a technology and a business:
Google is THE barometer of the Internet. It's like a one-stock index fund -- you buy Google, and you buy the entire Internet economy.
Think about it. Google now does more than half of all Internet searches daily and gains market share daily. Google's AdSense business is what offsets the costs of creating millions of new Web pages every day. Google's AdWords business allows small businesses to reach millions of new Internet customers through an advertising medium that is an order of magnitude more efficient than any other. Google News gives anyone access to nearly any news story written within minutes world-wide. Google's YouTube has become the video portal of our culture. And the list of services goes on and on.
Now if Google just provided great services, that wouldn't make it the barometer of the Internet -- it would just be a piece of it. But now do this thought experiment: Considering all the services Google provides -- search, indexing, analytics, sitesearch, ads, maps, Google Earth, print advertising, etc. -- if Google were to disappear tomorrow, what would happen to the Internet? I just did a quick survey of 12 random Web sites (thanks randomwebsite.com), and 25% of them had source code that linked to some Google service. Other data says that 75% of all traffic to Web sites comes from Google search; being dropped from Google's index can be like having your business phone disconnected -- it almost puts you out of business. Google, like it or not, has become the indispensable Internet OS, routing everyone to where they want to go.
So will Google blow out earnings today? I'll bet they will. Why? Because the Internet is growing bigger every day -- and that means Google is getting bigger and more important every day too. How big is that? I don't know, but wait a sec; I'll Google it and find out.
Full disclosure: the author has no position in Google at the time of writing.