Ian Landsman is Starting From Scratch, October 31, 2007:
Google Is Genius and Everyone Else is Stupid
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So Google is coming out with a social network like thingy. This will be one of trillions of new products Google has added in the last few years.
What I find interesting about all these new products is that they pretty much all have one thing in common. They’re money losers. Even gmail doesn’t make money. That of course is the genius. By building lots of apps they get people scared. Google is entering my market.. ahhhhhhhhhh.
The distraction factor is huge. The more time and resources companies spend on fighting Google on these fake fronts is less time and resources on the only one that matters, search. Search is where it’s at, search is so much bigger than these other markets it’s not even close. No social network, no matter how big or how cool will ever rival the revenue generating power that search does.
Even initiatives like Google Docs are little more than an effort to distract Microsoft. Few companies larger than a few people could use Docs, it’s simply to limiting. A 500K limit? Most organizations have millions of documents in Word larger than that. The browser tools are simply not there yet to attack Microsoft in any serious way on the Office front, yet Google has succeeded in making people think that this is a real threat to MS. (MS still made 5 times as much money as Google last year and nearly 7x more profit you know)
So hats off to Google, it’s a well designed campaign that seems to be working very well.
Discussion
Very intriguing thought.
Actually I have always wondered how come Microsoft has no serious alternative for search. I don't know what is preventing Microsoft to lure away the talent from Google and get a search feature which is somewhat comparable to Google. Obviously MS will have to do something very drastic to attract the best minds but I don't know of any other company which can make it possible. I guess Microsoft is wasting lot of time, money and talent with Live Mail, Live Office and all this Live **** projects where as they should only concentrate on search.
Created by JD on 10.31.2007 11:19 am
Shhh!!!! If you give away the secrets like that, our membership cards will be revoked at the next meeting!
Created by Andrey Butov on 10.31.2007 11:27 am
Heh, good point Andrey! Worse yet they might try and hurt my search rank!!
Yeah that's what I figure JD. I don't get why they haven't done all kinds of interesting search stuff to at least try to outdo Google. For instance, why not have some type of completely open developer API and let people build their own engines on top of MS. So many people cry out to do this with Google and they won't really let them (I know there are a few things out there, not totally open though). At this point MS should do anything and everything different from Google to try and best them at search.
Of course the other end of the equation is that MS Office is still a bigger product then even Google search ad revenue, so maybe they'd just rather keep their resources in the cash cow.
Created by Ian on 10.31.2007 11:31 am
Google started gaining momentum around 2001. It's been more than 6 years for MS to come up with a plan to combat Google. But so far they have nothing to show. Nothing even close. And I think it's short sighted to concentrate on Office when you see that you are missing out on potentially even bigger revenue stream. Instead of spending hundreds of millions (240 million?) to buy a lousy 2% in facebook (which IMHO is just a fad and doesn't have intricate value like Google does), I would hire 12 top notch guys in search space, give them 20 million each and ask them to build something which can rival Google. But well, who is going to listen to me?
Created by JD on 10.31.2007 11:59 am
True, but you also have to remember that 240 million is nothing to them. The distraction is a far bigger concern than the money. MS has 34 billion in cash just sitting there, so 240 million is literally a days pay to them.
Created by Ian on 10.31.2007 12:18 pm
I agree Ian. 240 million is nothing for them.
But those 240 million is lot of money which can be used to lure some very smart folks. I know some people say that money is not the biggest motivator but I say 'that's bullshit' . If I go to a guy who has expertise in search area, tell him that I will give him 50 million as a salary, give him unlimited budget for hardware/software, challenge him to create a search engine which competes with Google, I feel that a reasonable search alternative could be produced. It may not be as good as Google's (they have had quite a few years lead in this area) but it will not be as lousy as current Live Search.
My bigger point is this. Google has way too many things going for them : their reputation (helps them attract best talent), their 8 years (long time in computer technology) of experience in building search technology, millionaire employees thanks to the stock offering. If you want to beat them, you will need to put in heroic effort. Nothing else will do.
And yes, it's not that I am against Google but the way I see it, Google is becoming monopoly in search area. They make their own terms for search results, search ads (hundred of dollars for a click? Are you kidding me?) and can literally wipe out an Internet business if there is a slightest mistake by someone at Googleplex. I think we really need a strong competitor to keep them in check.
Created by JD on 10.31.2007 12:34 pm
No need to tell me about that, check out the rates for the term help desk software :-(
Little companies like mine can't even use Google ads, way to expensive.
Created by Ian on 10.31.2007 12:43 pm
Are you sure that gmail doesn't make money? Unlike docs, gmail does have ads, so it is possible that it's one property that makes money.
As far as docs goes, it's worth keeping in mind that Google plays for the long term (or so they claimed when they went public...) Google Docs today is not viable, and I can't imagine they have too many subscribers to their premium offering. Over time, though, I wouldn't rule it out... particularly if they start offering a cluster of boxes that large companies can stick on their networks.
To JD's first comment above about MSFT hiring away GOOG talent: GOOG is the #1 best place to work, according to Fortune magazine. I have a friend who left MSFT (the Xbox team, no less) who said that he was fed up with working for a company whose products he wasn't proud of (Xbox excepted, of course 
and has since raved about how fantastic a place GOOG is to work.
Personally, I don't think GOOG has a "distract our competitors with random nonsense" strategy. I think their strategy is "let's throw a few dollars at all kinds of different things and see what sticks". Quite a bit of it won't stick, and only time will tell which ones do.
Created by Kevin Dangoor on 10.31.2007 1:03 pm
Sounds like a derivative of Fire and Motion, but targeted more at ideas than developers.
Created by Adam Fortuna on 10.31.2007 1:43 pm
Google's employee count has gone from like 1000 to 10,000 in 4 years. I really think they are developing these other things in the hopes of them taking hold. I mean what could all these developers possibly be doing in there otherwise? And Google hit a Market Capitalization of $219 billion today and it's is still growing...
I do think the office thing is to distract Microsoft. Same with the bidding on Facebook. I think they like to mess with Microsoft, but that's just some personal thing.
Created by Phil on 10.31.2007 4:07 pm
I agree with heading of the article on 100%. Google is the excellent searching system without advertising. But now It is a super suggestion in all of spheres of Internet.
Created by Serg on 11.08.2007 3:11 am