The Google (NASDAQ:GOOG) train keeps coming. If you extrapolate from all the reporting, Google is going to out-Facebook Facebook, suck out all the ad revenue from newspapers, gradually reformat the telco business model, virtualize the earth at Second Life’s expense and take Microsoft (NASDAQ:MSFT) and Yahoo (YHOO) out. The stock price reached a new high Monday ($560.10), and if the above materializes, the price will hit $5,000 per share. It’s all a bit much.
While it’s hard to know what is going on inside Google, from the outside it looks like lots of smart people not focused on the past. The above average member of the Google tribe is not about world domination, creating the cult of Google–at least not overtly. They appear to be acting on an impulse to invent the future, and they mint patents as fast as they can.
It reminds me of Microsoft 15 or 20 years ago. Bill Gates would talk about his primary job as the hiring of super smart people and out-executing competitors on the technical and business fronts. He got a little carried away on the business front and after 30 years is too mired in a legacy of code and thinking to move as swiftly as the upstart Google.
It’s human nature to frame the tech industry as a series of interconnected battles between companies and larger than life figures. The game is technology and goal is to win, measured by Wall Street. Google vs. Microsoft, SAP (NYSE:SAP) vs. Oracle (NYSE:ORCL), MySpace vs. Facebook, Yahoo vs. Google, IBM (NYSE:IBM) vs. HP (NYSE:HPQ), Apple (NASDAQ:AAPL) vs. the PC industry, Apple vs. Sony (NYSE:SNE), salesforce.com (NYSE:CRM) vs. Microsoft, open source vs. the proprietary world, etc.
Google deserves a lot of the attention for its part in shifting the battleground–from client/server to on-demand and utility computing, and helping to move more whole industries into the digital age with irrefutably efficient and profitable economics.
But let’s be clear. To date, Google is about search and advertising. The company has its fingers in many other pies, but is more of a looming than dominant presence. On the other hand, if Google continues on its pace of innovation, it’s not unlikely that it will gain some more success in enterprises, telephony, hosting services, social networking, gaming, virtual worlds and other areas. Diversification is good.
Google may be able to manage infrastructure at massive scale, but managing thousands of employees and projects, as well as the expectations of billions of users, will be far more challenging. I doubt that Google will slow down Facebook, but it has the cash to YouTube it–pay $10 billion to keep Microsoft out of the game, although it doesn’t appear that Facebook is ready to capitulate. The dynamics of the industry will ensure that regulators are watching closely, which means Google will continue to hire more lobbyists.
Whatever transpires, existing industries, such as media, entertainment…and IT, are being reshaped. Google and its born-of-the-Web brethren are pushing into new territory, and thousands of fast growing and ambitious minnows are following in their wake. It’s transition time, and an addressable market of 6 billion people. It won’t go along smoothly but it will inexorably move forward.