The world's welcome to the googleconomy

Jason Lee Miller of WebProNews’ haunting greeting, “Welcome to the Googleconomy” seems to be the only way I can concisely express what will happen to the average consumer because of Google. No matter if you’re apprehensive, supportive, or ambivalent about Google, it seems undeniable that the company is at the centre of an unsettling revolution in the computing industry that ends, for all firms, with one question: whose business will Google affect next?

Most people know Google as the quickest and easiest way to find information on the web. The URL is easy to remember and the user interface is a clean and simple empty box in which you type what you’re looking for – be it a keyword, question, or quote. Invariably, Google almost instantly returns to you millions upon millions of sites containing your entry, all sorted by relevance. Even the word “Google” has become a part of our vernacular. How many times have you asked your friend a question and their response been “Just Google it”? ‘Search’ and ‘Google’ have become synonymous.

Some of the reasons for Google's ascendancy are its unbeatable speed, its seemingly endless hoard of websites, and its lack of obnoxious advertisements and a bandwidth-devouring interface. The simple clarity of the interface was especially important before high speed Internet access became a staple less than five years ago (anybody remember dial-up?). In fact, Google towers over its search engine competitors because it firstly caches all (and I mean ALL) of the data it has on record; it has over 3 times more websites cached than its closest competitor; and (this is where the whole “ingenuity” aspect first enters our story) defines words in its Google-lexicon not just by standard dictionary definition but actually by how people on the web are using them to search for queries.

Yet, it was only about 19 months ago that Google first branched out from its cozy search-engine hole and released “Gmail”. The idea was simple but revolutionary: people should not have to delete their e-mails. With this in mind, Google gave their online email service subscribers an unprecedented gigabyte of free space, while other services like Yahoo!© and Hotmail© gave at most one hundred megabytes of free space to their users. Furthermore, one could only get a Google account via invitation from someone who already had one, creating a fun sense of community amongst those who had it. Since Gmail’s introduction, Google has poured out what can only be called an absolute profusion of products and services, many unknown to the average user.

As an exasperated Steve Lohr, technology writer for the New York Times, puts it “The company's current lineup of offerings includes: software for searching personal computer files; an e-mail service; maps; satellite images; instant messaging; blogging tools; a service for posting and sharing digital photos; and specialized searches for news, video, shopping and local information. Google's most controversial venture, Google Print, is a project to copy and catalog millions of books; it faces lawsuits by some publishers and authors who say it violates copyright law.” This outpouring of (mostly) useful tools to the public can now easily be tracked: just check Google's corporate news site. You will see a trend: Google releasing some new product, service, or software almost every week for the past few months, with no signs of abatement.

Curious about the motivation behind all this, I went to the search-giant's corporate site to investigate their operation’s aims. On the page entitled “Corporate Overview” their mission statement stood clearly for the world to see:

“Google's mission is to organize the world's information and make it universally accessible and useful.”

After reading that, I was immediately puzzled as to how Google’s actions and ends are possibly related. The conclusion I came up with is that it really is that simple. Google can make billions of dollars, attract millions of Internet users, and strike fear into the hearts of many of the world's most powerful corporations simply by making more information available, faster and organized.

“Information is power. Google knows that. It also knows that information is money, lots of it” says Jason Lee Miller of WebProNews. Even Wal-Mart isn’t beyond the reach of the web behemoth. Jim Breyer, a member of Wal-Mart’s Board, recently claimed “We watch Google very closely at Wal-Mart.” What Wal-Mart fears is the instant-price-information potential that Google’s indexing holds. As Steve Lohr puts, “Search engines, combined with other technologies, have the potential to drive comparison shopping down to the shelf-by-shelf level.”

Here's the deal, plain and simple. Google is showing unprecedented growth. They have begun to offer dozens of services, all aimed at giving them the greatest amount of relevant information for which Internet users are searching. Google Local now gives you maps and driving directions to every location in America along with business listings with geographic markers in any region. Froogle does your comparison shopping with the click of a button. Google Images can help you find a picture of almost anything, and Google News can find the best article about it. Even Dartmouth is breaking in to the Google scene by partnering with the company to add sources to their Google Scholar database of academic articles. Of course, the most controversial project of the pioneering corporation is for every book ever written to be posted for public viewing via Google Print on the web. Yet all these diverse services share one common denominator: they will give anyone with internet access a wealth of knowledge concerning almost anything they want. This fact makes corporate America most nervous.

A well-known lesson for merchandise vendors (big or small) is that the most dangerous consumer is an educated one. If you have always gone to Radio Shack to fulfill your electronic needs, Radio Shack is not worried about losing your money. However, if you do a little research, and find out that that DVD player is $20 cheaper across town at Bob's Entertainment Depot, say goodbye to Radio Shack.

Now imagine a scenario in which you're at Wal-Mart and find a good bike for a price that's not outrageous, but could be better. You like the product, but your curiosity at investigating other stores dies down as you realize you've still got work to do at home and it's getting late. Instead of this scenario, now imagine that, curious about your prospects, you take out your cell phone and open Google Maps (already possible on many cell phones) select an imaginary (for now) product called “Froogle Local”. You enter in the product, where you are, and how far you're willing to travel. Your phone will then give you a map that shows which stores sell the product, how much each charges, and how to get to each place. You might even have a newer phone that has a barcode scanner on the back so you can get exactly the product you're looking for by swiping your cell across the bike's barcode. You find it cheaper 6 blocks down and kiss Wal-Mart goodbye. Get the picture? Oh, by the way, don't forget that the entire service is free.

This is a merchandiser’s nightmare: every buyer in America armed with exactly the information they need to make the most efficient purchase possible at any given time. Extend this to finding a new home, purchasing a new car, finding the best restaurant for your date, and so on. Of course, its uses aren’t all commercial. One can imagine good-will uses such as finding loved ones in New Orleans with whom you have lost contact. Then again, one doesn’t have to imagine because someone at Google did this in the first week after Katrina hit. The most interesting thing about these scenarios is that the technology needed to make them a reality isn’t far off in the future; it is in development, right now.

Regardless, the resources necessary for such undertakings seem a tremendous stretch for a company based on a search engine. Surprisingly, it is not. In the third quarter of 2005 alone, Google's revenues totaled $1.578 billion. 43% of that revenue came from their AdSense program and the other 56% from Google-owned sites, as stated by their Third Quarter Fiscal Results on Oct. 20. So, as it turns out, those little ads on the side of Google search pages are actually worth hundreds of millions of dollars (one reason being that internet advertising has seen tremendous growth since, although not necessarily as a result of, Google’s inception). Another is that Google doesn't give flat rates for advertisements. They are all auctioned off to the highest bidder, and with Google attracting billions of hits everyday across the globe, businesses are willing to shell out a lot of money. In 2004, almost $12 billion was spent on online advertising, and it is estimated to reach $14.7 billion by the end of this year according to CNET.com. All of this has resulted in Google's revenue growing by one hundred percent annually for the past few years. So, by offering people more information than ever thought possible and skimming a little off the top, Google is raking in mountains of dough.

Of course money can’t buy success in and of itself; a company needs a creative, dynamic workforce to grow at Google’s rate. It’s no wonder, then, that Google hires only the best and the brightest. Founders Larry Page and Sergey Brin created Google out of a dorm room at Stanford. In their ranks, you will find physicists from all over the world; mathematicians from MIT and CalTech; Ph.D.'s from all fields; as well as some of the most talented and creative software engineers in the world (quite a number of them being Dartmouth Grads). Google knows this however, and treats its employees at a standard that most companies consider absurd. Google’s benefits include free catered meals; full medical, dental, and eye coverage; 401K; tuition reimbursement of $8000 if you have a child in college; on-site child daycare, doctor, dry cleaning, car wash, massage therapy, gym, hair stylist, & fitness classes; adoption assistance; maternity benefits (12 weeks at 75% pay); unlimited sick days in addition to 25 days off a year; free shuttle to work; and much more. Google has a corporate policy called the “20% rule”under which, 1/5 of the time, Google software engineers are allowed to work on whatever projects they want using any of Google's resources. This playtime has already created Froogle, Orkut, and Google News, with who knows what else on the horizon. It comes as no surprise, therefore, that Google makes only one offer for every one thousand applications they receive.

In case you were wondering, Microsoft has not exactly landed on the back burner with all of Google’s activity. As many in the computing industry know, a hyper-competitive war is erupting between Gates & Co. and Google, the details of which could fill an entire campus publication. There does, however, seem to be one crucial difference between Microsoft and Google: Microsoft was founded to make money by offering products and services; Google was not. Even today, regardless of whether or not you are convinced that Google has benign intentions, it is easy to tell that Microsoft is a corporate beast that has not yet been stopped from dominating its markets. It was the force that destroyed Netscape and beat out Apple and IBM. Google, however, seeks only its mission statement, but it just so happens that information conveniently available to everyone is the most dangerous thing Microsoft has ever encountered. Google already supports open-source software by sending its own employees to work for companies like Mozilla (Firefox Internet browser) and Sun (Open Office, which was coincidentally used to type this article). Bill Gates has said himself that he seeks to dominate this competitor in the information industry. But it's not going to be easy.

As Fred Vogelstein, senior writer of FORTUNE noted, “This battle is going to be one of the hardest Microsoft has ever faced because there are no shortcuts. It will simply have to out-innovate the competition, and it is already far behind.” In his analysis of the upcoming Google-Microsoft battle, he claims that open-source software is already cutting into Microsoft’s profits because of companies like Google, Sun, and Mozilla. In addition, he contends that Google “is better run, more profitable and sitting on more cash than any small competitor Microsoft has faced.” Lastly, he notes that Microsoft is under intensely close watch now, so it will not be able to use its dominance with Windows, Office, or any of its other products to force out its competitors.
For some, Google will remain a simple search engine, useful only for bits of information that come up here and there. Or it might become the next greatest ally in making the best-informed consumer decisions people can, encouraging them to integrate life and the Internet in a way never thought possible. Either way, the choice is up to you, which is exactly the way Google wants it.