By Guy Hervier
After its first ten years, Microsoft had achieved revenue of 140 millions of dollars, compared to Google’s 21.7 billion dollars. Ten years after it started, Google had achieved revenue eighty times higher than that of Microsoft even after including a 3% annual inflation rate. Over the fiscal year 2008, 97 % of Google’s revenue comes from advertising, with 68 % from Google’s sites and 32 % from its partner sites.
It’s fair to call Google a tremendous success, one of the greatest stories in economic history. Google’s mission statement is noble but also disquieting, “Our mission is to organize the world’s information and make it universally accessible and useful”. The comparison with Microsoft owning a de facto monopoly on the workstation becomes interesting, but Google is on a completely different scale. Google is building a monopoly on the access to information. Things can only get worse as Google continues with its astounding success.
The American administration gets involved. After IBM, AT&T, Microsoft and Intel, Google is now in the crosshairs of the American administration. Among the many ongoing Class-Action Lawsuits, the agreement between the Internet giant and the Authors Guild and the Association of American Publishers is the most controversial. It states that Google will hand out 125 million dollars for the possibility of providing access on the Internet to works with expired copyright, those in the process of being printed, but possibly to works that aren’t available in paper format but that are still under copyright. The Department of Justice (DoJ) sent a formal request of information to Google, and to the editors that signed the agreement regarding the online publication of books.
Competition is one click away. Faced with the administration’s growing interest, Google has launched a “charm offensive”. One of Google’s strongest and often-repeated arguments is that competition to its search engine is only “one click away” and that all a competitor needs to take over is a new technology. That is what happened to AltaVista, Lycos, and others. And the new competition from Microsoft’s new search engine Bing gives Google some credit. Unlike what happens with other markets, Google’s users are not locked in, they consent to their fate.
Google Inside. Google is magnificent tool, with many side projects born from the minds of the company’s talented engineers. It is also a black box with its non-transparent ad auction system and profiling of private user data. According to Google, advertisers pay for what a click is worth. But as they have little visibility over what goes on, they pay what Google charges them. If Google is to avoid the current antitrust concerns, an option might be to provide more transparency to customers and regulators.
Guy Hervier, is Editor in Chief, ITRmanager, a leading publication for IT managers.
