Lately I've been reading several blog posts and articles with the same tenor of this one by Sahar, which aptly point out: If you are doing business on the Internet, you should fear Google.
To Google's credit.. these guys are so smart. They have hired brilliant talent, they have a wonderful internal culture.. There is precious little to dislike. Strip away your human instinct for jealousy and look at the company for what it has accomplished. There is a wonderful dynamic that has occurred there. The renewed optimism about Web 2.0 and scores of Internet related talking points. Many of them can be traced back to the footsteps of one: Google.
How did this happen?.. How did Google seemingly run the length of the field unimpeded and best everyone? How did they take the crown of search and relegate all other comers to ashes? Well.. a lot of it happened for the same reason that I'm a big domain owner. Back in 2001/2 when everyone declared the Internet dead (and then went back to using it every day), Google decided to re-double it's efforts and focus on paid search ... I focused on grabbing expiring generic domain names, Google focused on improving their algorithm and building a sales force. Most of us where busy duct-taping our windows after 911 / the Anthrax attacks. Google hired every underpaid PhD without tenure while their former would-be competitors tried to sublet office space on Sandhill Road.
Google's early success can largely be traced to an echo of the Dot Com bust. When everyone had given up on Search, they made 'search' a priority and boot-strapped money back into the space that others where trying to flee.
The first moment of creating a reversal in a trend is when you recognize what it is that has occurred and you accept it. Accept the Google touch-down for what it is and give them their proppers. The fact that Google has done what they did, does not serve to change the foundational elements of the Internet or to reverse gravity. While they are to be complimented for capitalizing on a multi-year run as the rest of the world failed to recognize an opportunity, the whipsaw effect of competitors re-doubling efforts is going to magnify over the next several years. In many respects it has already begun -- fueled in a large part by Google's own success and market capitalization.
What makes Google strong is that they are open and free and that very strength is their potential undoing. Let me preface by saying that I do not wish to see Google undone. I occaisionally criticize them on my blog but it's constructive criticism. Nobody wants a friend or sibling who beats them up each day but nobody likes a fawning sycophant. I try to call the good and bad within Google as I see it -- much like their algorithm calls what it sees when it visits your website.
In the final analysis, Google is one of many sites on the Internet. They own Google.com .. You, I and countless others own everything else. Google gets a lot more return visits than many websites around the world because they deliver tangible value by displaying relevant search results. Based on unique visits however, Google is not that large. Several big domain name portfolio holders could quickly duplicate the reach of Google's daily UNIQUE IP visits. I capitalize the words 'unique' and 'reach' to avoid flooding my comment box with well meaning corrections. Google's ability to monetize that reach is limited. Serve too many ads, people get turned off and look for an upstart pure-play search engine; much like when the new classic-rock radio station rolls into town and everyone tunes in for uninterrupted Rolling Stones sets while the incumbent station nervously serves the morning talk-jocks.
Try to think of Google as a piston engine. One piston quickly serves relevant searches and information, constantly trying to improve on that characteristic (but makes relatively little money).. the other pistons are the salesmen and syndication arms that distribute Google's advertising system across every other website on the net. Those pistons success is largely governed by the first's uncanny ability to deliver rotations.
I would estimate that at least half (perhaps two-thirds/more) of Google's 'earnings' come from syndication across other websites on the net. Google keeps those sites in lock-step through the ability of their search engine (piston 1) to deliver accurate searches and act as a nucleus (starting point) on the net. Unbalance any piston and the engine begins to knock. Take away syndication partners and earnings go down... Take away relevance or result-speed and unseat the engine's ability to draw and retain users/advertisers. The latter is more complex than the former, which is why Google is likely focusing more effort on that.
Even today someone could create a juggernaut like Google - and in several ways. I manage a large network of domain names, so I am going to show you how to do it with domain-names. Five colleagues of mine and I control more than 10 million unique visits a day. 10 million unique IP visits a day (300 million people each month) visit websites controlled by six human beings... and I'm the little guy on the pole.
As I recently pointed out with my Webhealth.com experiment, you can quickly and easily create content using the Wiki format. That content (which is entirely real) will begin to get spidered by Search Engines. Now remember that the group collectively gets 10 million unique a day from people typing-in our domain names into their browser's address bar. These are not referrals from within Google which can be blocked.
- If every website featured a uniform wiki with paid-search listings and content, all those sites would begin to get indexed. Like a black-hole, those sites begin drawing eyeballs away from the search engine to our sites. If any given engine decided not to deliver relevant visitors to our sites it ultimately does not matter. The organic visitors would soon judge the search engine broken because these 'open engines' will be unable to locate the content that gets reinforced through 10 million daily type-in uniques. Google's algo simply focuses on what the people of our society (or those who shape its algo) want it to see. It can be steered -- not like a car can be steered down a winding stretch of PCH, but like a curler mopping in front of a rock as it makes its way down the ice. Millions of daily visits coming to a 'network' of websites serve to reinforce user intent. As we add accurate interlinked content, the traditional Yahoo/Google search engine has two alternatives: Serve an access point to the relevant sites that people demand through their search-box, or render itself useless and (eventually) be unseated by a competing engine as happened to Excite and Altavista.
Content really is king. In 2007 content can be reduplicated by millions instantly at little or no cost .. So in my opinion, certain kinds of distribution have really become content. Google becomes 'content' when it acts as the Web's search nucleus. Google.com is just one location/service or node on the web. It's easy to get lost in the smoke believing something else, but it is what it is. Domain names become content when they are generic, descriptive and typed into the browser address-bar by a user navigating to the content that the name describes. It is much harder to undo the trillions in collective branding that serves to drive the minimum din-level traffic to the .com juggernaut than it is to stop a 'top' like Google spinning at full speed.
So back to the names; utilize the organic traffic to generate revenue, then reinvest using the lever of arbitrage to purchase additional web-traffic from the very search engine at the center of the world. Channel those visits to a Jimmy Wales centric nucleus with paid search links of its own. When primed with the pump of organic type-in visits and relevant content, THAT is when the balance of power shifts from the engine. It only shifts under that one key-phrase, in that one vertical, but repeat over enough popular domain name key-phrases and the unraveling inertia snowballs. Before long, the wiki/domain world would be in a position to command its own advertisers, through its own platform.
The entire foundational industry (a vast portion of the visible Internet) could be quickly and easily purchased for under 5 billion dollars .. three years ago it was 3 billion. Compare that stipend to the market cap of GOOG and you see the value disconnect. Yahoo or Microsoft could buy the same "reach" as Google by buying these domain owners as well. The buying of domain names by a search-engine has historically been frowned on as weak or overly simplistic (it's too easy after all), so more likely the industry will be consolidated from within.
Rest assured something "will" happen though. I firmly believe that one day the disruptive technology described within this post will serve to either amplify the value of all domains names into the hundreds of billions, or it will serve to unwind Google's market capitalization. There is simply too large a disconnect between the value proposition that Google delivers and the unique characteristics (value proposition) of generic domain names for some harmonizing adjustment not to occur. In the end, Google.com is little more than the biggest type-in traffic domain-name on Earth. It achieves that through a wonderful search uitility offered there.
The entire world of web-navigation looks so incredibly simple from my chair. Those of you have read this far must surely be asking themselves; Why? If it's so simple, why not try to out-Google Google? Well some of it comes down to this post I made today. Why indeed. Why bother when your cup already overfloweth.. Many domain owners are content with revenues from Google or Yahoo so it's difficult to marshall the interests of all six parties to roll-out a uniform implementation. Still, as a Google stock holder -- keeping a disruptive technology at bay by keeping its masters disagreeable is no foundation for $450+ per share.
Some of us "are" just beginning to try. There are people who have had that 'moment of awakening'. Even I, a long time paid-search pure-play have been stirred by my latest Wiki exercise .. Everything is becoming much clearer.
As it relates to Google, I firmly believe, the only thing to fear, is fear itself and with the passage of several years we will mark this time in 2007 as the "Google fear" high water mark.