Google posts another superior
quarter. Its profits tripled and revenue was up 67%. Most significantly,
most surveys of search market share show Google extending its
lead over Yahoo and Microsoft. It's all the more remarkable given how fast the
company has been growing for the past four years. The first
time I interviewed Larry, Sergey and Eric was in early 2002 - back when the
company had about 300 people. Now it has more than 10,000. Most companies that
add 50 to 100 employees a week eventually become dysfunctional. Google shows
absolutely no sign of doing that.
There are no shortage of opinions of what Google's secret is, but here is one
that I haven't seen:
Contrary to the assertions that Google is clueless about media, Google has
indeed discovered that traffic on the web is all about content. It's just that
the company has changed the meaning of the word. Google doesn't produce
entertainment or news, or any of the things that people who grew up watching
television and reading newspapers think of as content. But if you think of
Google's pallet of online software as content, the company's power as a producer
comes clearly into view.
What's a search box? What's an online calendar? What's gmail? What's Google
reader? What's Picasa or Google Earth? They're all pieces of software running on
servers somewhere AND they are all content.
They attract a loyal audience
because they are entertaining or informative. Once there, Google shows them
advertising. The more people who come, the more advertising they see, and the more
money Google makes.
It's not advertising that we've grown up with. It
doesn't demand 15 or 30 seconds of our attention. But so what. Who said that was
a rule for all eternity. Good advertising is supposed to take a message about a product and
service and by distributing it, generating sales. There is no rule that says how long or how often the consumer must look at it. Google's advertising does that
in a very big way.
Indeed, thought of this way Google is the most efficient
producer of content on the planet: It's software is not only relatively cheap to
produce, it also double as a marketing expense. Can newspapers, magazines, networks, and advertising agencies say that?
Google doesn't have to tell the
world it has released a new product, it just does and through the magic of "the network as
computer" - as Sun co-founder Scott McNealy likes to say - everyone comes.
I think my Mom understood this intuitively when she bought Google stock at
$125 a share and then again at $195. I thought she was nuts and told her so and
since then have told her a dozen times to sell. But her view is that anything on
the Internet that captures so much of her attention, must be worth investing in.
I suspect you could have made the same comment about CBS, NBC and ABC 50 years
ago and gotten just as rich as my Mom has on Google. In otherwords - in case you are listening Mom - you were right and I was wrong - AGAIN!