Authors: Ken Auletta
Tags: #Industries, #Computer Industry, #Business & Economics
Googled (49 page)
Google may not have an overarching strategy, but it does aim to be a disrupter. Google has always been guided by a vision enunciated as early as 2002, as we’ve also seen, when Larry Page told a Stanford class, “If you can solve search, that means you can answer any question. Which means you can do basically anything.”
When Google defines its informational mission so broadly, and enters businesses where engineering can eradicate inefficiencies, it is left with a shooting gallery of swollen targets. An “innovative” company like Google, said Brin, enters fields where “we scale,” meaning where they have the infrastructure to enter fairly cheaply and without huge diversions of resources. With millions of computers and servers processing searches and collecting and digesting data, this architecture makes it possible for Google to “scale” into cloud computing, to store and search and sell digital books, to host the fifteen hours of video uploaded each minute on You Tube—the equivalent, Brin said, of uploading eighty-six thousand full length movies every week. “Everything Google does extends its reach,” Bala Iyer and Thomas H. Davenport wrote in the
Harvard Business Review.
“It is informational kudzu.” And although Google likes to say they don’t compete with media companies and prefers to call them “partners,” Iyer and Davenport write that by working with advertisers and newspapers, magazines, television, radio, mobile telephones and Web sites, it “is quite possible that what Google learns across various media as it solves problems for the ecosystem partners may position it to become the competitor that it now claims not to be.”
Harvard Business Review.
“It is informational kudzu.” And although Google likes to say they don’t compete with media companies and prefers to call them “partners,” Iyer and Davenport write that by working with advertisers and newspapers, magazines, television, radio, mobile telephones and Web sites, it “is quite possible that what Google learns across various media as it solves problems for the ecosystem partners may position it to become the competitor that it now claims not to be.”
Google appears to be well positioned for the foreseeable future, but it is worth remembering that few companies maintain their dominance. At one point, few thought the Big Three auto companies would ever falter—or the three television networks or AT&T, IBM, or AOL. For companies with histories of serious missteps—Apple, IBM—it was difficult to imagine that they’d rebound, until they did. To avoid the roller coaster, Google has to avoid two sets of obstacles, one external, the other internal.
THE EXTERNAL HURDLES START with Microsoft, but they don’t end there. Because Google has been so audacious, it has “waked up the bears,” colliding with various industries and companies. Alert to Google’s growing dominance, Verizon in late 2008 chose Microsoft’s search engine for its mobile phones. Newspapers and magazines now want Google to pay to link to their stories. Television and movies seek license fees from YouTube. Telephone companies fear Google’s Android. Advertising agencies seesaw back and forth between wariness and hostility. Cable and telephone broadband providers are angry about Google’s call for an “open net.” Rupert Murdoch is unhappy that Google is likely to end its lucrative advertising guarantee to his MySpace when the contract expires in 2010, as Time Warner was when Google announced in early 2009 that it would sell its 5 percent stake in AOL, cheapening the value of AOL and of Time Warner’s stock. Microsoft needs no reminders that Google is their enemy and was reminded of this in July 2009 when Google announced—as Netscape, to Microsoft’s chagrin and alarm, did a decade earlier—that it was retooling its browser to become an operating system for PCs, one without boot-up delays and that would be simpler and faster and cheaper than Windows. (Of course, Microsoft countered with a Web-based version of its Office software that is also free.) Overseas, Google is challenged. Its social network site, Orkut, has seen its market share slip in countries like India and Brazil, where it was once dominant. Even in search, there has been slippage; in Russia, a private start-up named Yandex has a market share approaching 50 percent, well ahead of Google. As with nations, there are few permanent allies. Friends like Apple are angry about Android, and although Jeff Bezos was an original Google investor (and declines to say if he still owns Google stock), Amazon is mounting a cloud-computing challenge as Google is mounting an electronic book challenge. “These companies air kiss each other, just as any Hollywood company does,” observed Andrew Lack, the former president of NBC and the CEO of Sony Music, now the CEO of the multimedia division of Bloomberg LP. “So their level of sincerity is not much different than the traditional Hollywood. Usually we think of Hollywood and Washington, D.C., as company towns. Ironically, Silicon Valley is often right there with them.”
Google knows that one day its cold war with Facebook could turn hot. By March 2009, Facebook had 200 million users, double the number it had when Sheryl Sandberg joined a year earlier. Sandberg projected that by the end of the year, Facebook would have 1,200 employees. Despite sneers that Facebook makes no money, Sandberg said if her company extracted the money it reinvests in its computerized infrastructure, “we’ve been profitable for seven quarters.” (Of course, one can’t extract these core business expense.) By the fall of 2009, she predicted that Facebook would take in more cash than it expends. Asked whether Facebook was a threat, Bill Campbell replied without hesitating, “Anybody that gets a widely accepted user platform is to be worried about.They could be the start page for people that use the Web.” The Google model is based on getting users out of Google and to other sites, on maintaining the Internet as the primary platform. Facebook and other social networks seek to keep users on their sites, to become the hub of their online lives, to become their home.
Social networks might pose a threat to Google search. At the MIT Media Lab in the winter of 2009, a Ph.D. student named Kwan Lee was devising a mobile phone application for a social network search function. Lee began with the premise that “Ads on the side are not useful to me.” Google search, he said, “is a pull model,” in which the search program aggregates data and lets users decide what is useful. Lee thinks it is difficult for users to “pull” the data they want from the hundreds of thousands of links received in response to a single search query, much of which he considers spam. As a substitute, he is devising a “push” model with which friends who are part of a social network could push tips to friends, sharing what they purchased. It would also allow participants to ask questions of friends, who are likely to deliver more precise and trusted answers. “This makes search much more efficient,” said Lee, fondling his iPhone in his space on the fourth floor of the Lab. “My goal is to reduce and eliminate spam,” to allow “people to get recommendations from friends.”
This could pose a threat to Google, for although it has a broader base of data, social networks like Facebook, Twitter, Ning, or Linkedin retain more in-depth information about individuals and their community of friends. A familiar brand name like Amazon could also pose a challenge. “What happens if people searching for a product go right to Amazon and not to Google?” asked an important Google adviser.
Google’s founders are acutely aware that search is still fairly primitive. Type into your Google search box “Was Shakespeare real?” and in less than a second up pop 5,06,000 results. Because many books have been written exploring whether someone other than William Shakespeare penned his plays, one result would not be possible or even desirable. But 5 million? Page and Brin often say that their ideal is to have so much information about their users that Google can devise an algorithm that provides a single perfect answer.
Kwan Lee is not alone in thinking that Google is mistaken to treat search as an engineering problem. John Borthwick, who created one of the first city Web sites, sold it to AOL in 1997, and later became senior vice president of technology and alliances for Time Warner, thinks Google “lacks a social gene.” (Borthwick has since founded and now runs Betaworks, which seeds money for social media.) Information, he said, “needs a social context. You need to incorporate the social graph [the connections among people] into search. Twitter becomes a platform for search. People put out Tweets—‘I’m thinking about buying a camera. What does anyone think of this camera?’” It’s the wisdom of crowds—your crowd of friends. “Google is just focused on CPU—central processing computers—and ignores the processing of the human brain.” He believes this makes its search vulnerable. Google obviously has come to share this concern for a senior Google executive confirms that they tried—and failed—to acquire Twitter.
Search Engine Land’s
Danny Sullivan identifies another variation of this threat. “If I were Google I’d be worried about vertical searches,” he said—searches that tap the knowledge of experts. Jason Calacanis, a Web entrepreneur, started a niche search engine,
Mahalo.com
. The problem with horizontal search, Calacanis said, is that it spews out too much information and assumes that the most linked sites are best. “The ‘wisdom of crowds’ is great to find trends,” but there is such a “mob” of voices on the Web that search results produce too much useless information. He said he raised twenty million dollars to hire experts who produce targeted sets of no more than seven results—the seven best hotels in Paris, for instance. He hoped experts in various fields could produce answers to twenty-five thousand questions and computerize these. He vowed not to assign cookies to track a user’s past searches, and said he’d be content in ten years if Mahalo had ten percent of all search traffic. He saw Google more as a partner than a competitor; the AdSense program generates a good deal of his site’s income. The competition he worried about is from old media. “I would have been afraid if the
New York Times
or Bloomberg took a bunch of editors to compete with us.” Calacanis still can’t understand why they didn’t enter vertical search themselves. With experts in food, wine, movies, art, Iraq, finance—you name it—big newspapers might have been a search contender.
Danny Sullivan identifies another variation of this threat. “If I were Google I’d be worried about vertical searches,” he said—searches that tap the knowledge of experts. Jason Calacanis, a Web entrepreneur, started a niche search engine,
Mahalo.com
. The problem with horizontal search, Calacanis said, is that it spews out too much information and assumes that the most linked sites are best. “The ‘wisdom of crowds’ is great to find trends,” but there is such a “mob” of voices on the Web that search results produce too much useless information. He said he raised twenty million dollars to hire experts who produce targeted sets of no more than seven results—the seven best hotels in Paris, for instance. He hoped experts in various fields could produce answers to twenty-five thousand questions and computerize these. He vowed not to assign cookies to track a user’s past searches, and said he’d be content in ten years if Mahalo had ten percent of all search traffic. He saw Google more as a partner than a competitor; the AdSense program generates a good deal of his site’s income. The competition he worried about is from old media. “I would have been afraid if the
New York Times
or Bloomberg took a bunch of editors to compete with us.” Calacanis still can’t understand why they didn’t enter vertical search themselves. With experts in food, wine, movies, art, Iraq, finance—you name it—big newspapers might have been a search contender.
Of course, Calacanis himself might not be a contender. Perhaps a challenge will come from Wolfram Alpha, which was launched in May 2009 and does not search the Web or rely on experts but instead relies on databases to provide answers and offers additional links on the side of the search results. Unlike Google, these vertical search engines do not offer a universal search, which raises this question: how does a user anticipate which subjects are covered in the vertical search index? To date, with exceptions such as Expedia .com for travel,
Monster.com
for job searches, and
HomeAway.com
for vacation retreats, vertical searches have not thrived. And as Google moves toward better comprehension of the information users seek, it too will produce fewer and better-honed results. Google will have competition from Microsoft’s renamed and reengineered search engine, Bing, launched in May 2009, which in July 2009 finally succeeded in merging with Yahoo search.
Monster.com
for job searches, and
HomeAway.com
for vacation retreats, vertical searches have not thrived. And as Google moves toward better comprehension of the information users seek, it too will produce fewer and better-honed results. Google will have competition from Microsoft’s renamed and reengineered search engine, Bing, launched in May 2009, which in July 2009 finally succeeded in merging with Yahoo search.
One could argue that the ultimate vertical search would be provided by Artificial Intelligence (AI), computers that could infer what users actually sought. This has always been an obsession of Google’s founders, and they have recruited engineers who specialize in AI. The term is sometimes used synonymously with another, “the semantic Web,” which has long been championed by Tim Berners-Lee. This vision appears to be a long way from becoming real. Craig Silverstein, Google employee number 1, said a thinking machine is probably “hundreds of years away” Marc Andreessen suggests that it is a pipe dream. “We are no closer to a computer that thinks like a person than we were fifty years ago,” he said.
Sometimes lost in the excitement over the wonders of ever more relevant search is the potential social cost. In his provocative book
The Big Switch,
Nicholas Carr notes that Google’s goal is to store 100 percent of each individual’s data, what Google calls “transparent personalization.” This would allow Google to “choose which information to show you,” reducing inefficiencies. “A company run by mathematicians and engineers, Google seems oblivious to the possible social costs of transparent personalization,” Carr wrote. “They impose homogeneity on the Internet’s wild heterogeneity. As the tools and algorithms become more sophisticated and our online profiles more refined, the Internet will act increasingly as an incredibly sensitive feedback loop, constantly playing back to us, in amplified form, our existing preferences.” We will narrow our frames of reference, become more polarized in our views, gravitate toward those whose opinions we share, and maybe be less willing to compromise because, he said, the narrow information we receive will magnify our differences, making it harder to reach agreement. Carr also expressed concern that search extracts another toll. “The common term ‘surfing the Web’ perfectly captures the essential superficiality of our relationship with the information we find in such great quantities on the Internet.... The most revolutionary consequence of the expansion of the Internet’s power, scope, and usefulness may not be that computers will start to think like us but that we will come to think like computers. Our consciousness will thin out, flatten, as our minds are trained, link by link, to ’DO THIS with what you find HERE and go THERE with the result.‘ The artificial intelligence we’re creating may turn out to be our own.”
The Big Switch,
Nicholas Carr notes that Google’s goal is to store 100 percent of each individual’s data, what Google calls “transparent personalization.” This would allow Google to “choose which information to show you,” reducing inefficiencies. “A company run by mathematicians and engineers, Google seems oblivious to the possible social costs of transparent personalization,” Carr wrote. “They impose homogeneity on the Internet’s wild heterogeneity. As the tools and algorithms become more sophisticated and our online profiles more refined, the Internet will act increasingly as an incredibly sensitive feedback loop, constantly playing back to us, in amplified form, our existing preferences.” We will narrow our frames of reference, become more polarized in our views, gravitate toward those whose opinions we share, and maybe be less willing to compromise because, he said, the narrow information we receive will magnify our differences, making it harder to reach agreement. Carr also expressed concern that search extracts another toll. “The common term ‘surfing the Web’ perfectly captures the essential superficiality of our relationship with the information we find in such great quantities on the Internet.... The most revolutionary consequence of the expansion of the Internet’s power, scope, and usefulness may not be that computers will start to think like us but that we will come to think like computers. Our consciousness will thin out, flatten, as our minds are trained, link by link, to ’DO THIS with what you find HERE and go THERE with the result.‘ The artificial intelligence we’re creating may turn out to be our own.”
The fear was that Google and its online brethren shortened attention spans and trivialized ideas by simplifying them. This was the thrust a quarter century ago of Neil Postman’s influential book,
Amusing Ourselves to Death.
He was writing of the public harm when television supplanted print. I can’t suppress a smile when I think how this communications scholar, were he still alive, would react to the Internet, to the thousands and sometimes millions of answers Google offers to a search question, or to an online text-messaging tool like Twitter, with its insistence that no communication be more than 140 characters.
Amusing Ourselves to Death.
He was writing of the public harm when television supplanted print. I can’t suppress a smile when I think how this communications scholar, were he still alive, would react to the Internet, to the thousands and sometimes millions of answers Google offers to a search question, or to an online text-messaging tool like Twitter, with its insistence that no communication be more than 140 characters.
Increasingly, teachers admonish their students that a Google search can be too easy, allowing them to bypass books that broaden the context of their thinking and surprise them with ideas their search words don’t anticipate. Tara Brabazon, a professor of media studies at the University of Brighton, in England, published a book,
The University of Google,
that caught the attention of the press, in early 2008. Google, she told the
Times
of London the day before she was to deliver a lecture based on her work, “offers easy answers to difficult questions. But students do not know how to tell if they come from serious, refereed work or are merely composed of shallow ideas, superficial surfing and fleeting commitments.” She does not let her first-year students use Google or Wikipedia as research tools because, she warned, “We need to teach our students the interpretive skills first before we teach them the technological skills.” These social costs will matter to the company if they erode the trust Google has earned and if generations of college graduates and their instructors are dubious about Google’s veracity or worth.
The University of Google,
that caught the attention of the press, in early 2008. Google, she told the
Times
of London the day before she was to deliver a lecture based on her work, “offers easy answers to difficult questions. But students do not know how to tell if they come from serious, refereed work or are merely composed of shallow ideas, superficial surfing and fleeting commitments.” She does not let her first-year students use Google or Wikipedia as research tools because, she warned, “We need to teach our students the interpretive skills first before we teach them the technological skills.” These social costs will matter to the company if they erode the trust Google has earned and if generations of college graduates and their instructors are dubious about Google’s veracity or worth.
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