Google

Off Topic Politics and World Issues
1

Here is part one of a two part article I read from investors insight on google. It’s a good read.

Does Google Want to Rule the World? (1)

At first glance, a seemingly silly question. And yet, some forward-looking people believe that, in a sense, that’s exactly what Google is all about.

Consider that when Google held its much ballyhooed stock IPO in late 2004, the opening price was $85. As we write, you have to pony up $411 and change to get a single share, nearly a quintuple. Not bad for a company founded only seven years earlier by a couple of guys–Larry Page and Sergey Brin–who were then in their mid-20s, and who entered a field jammed with competitors.

Especially not bad because this is a company that seems to have no real product, in the traditional sense of the word, and that gives away its primary offering for free. Yet the-search-engine-that-has-become-a-verb employs over 3,000 people, sports a market cap of $121 billion, and features traditional value yardsticks like price/earnings and price/sales ratios that are in nosebleed territory at 91 and 23.5, respectively. Obviously, shareholders believe that this is not only a good company today, but that it is going to be a bigger and better one tomorrow. Among those placing strong bets on Google are insiders, who hold over 35% of all stock, and institutions, which control nearly 38%. What do these people see that, perhaps, the rest of us don’t?

Well, many traders are likely just momentum players, with Google being their flavor du jour. For others, though, the answer may be contained in our initial question. Google seeks, quite simply, to gain control of the Internet. And whoever controls the Internet will, in more than just a metaphorical sense, rule the world.

Flashback to the bad old days. Remember when searching the Net was a time-consuming, frustrating experience? Yeah, we barely do, either. Google changed that in what now seems like an instant. All of a sudden, here was a search engine that was not only thorough, but that returned the results you wanted, more or less in the order that you wanted them.

Somehow, it was able to grasp that if you seek information on black holes, you’re likely to be more interested in the cosmos and less in Calcutta. We don’t pretend to have the slightest understanding of how it does this. All we know is that Google perfected the art of searching. Users noticed right away, and Google soon left the competition in an electronic dust of unused bits and bytes.

From the outset, Google continually extended its reach. After exploiting the obvious revenue bases, advertisers and users who paid to have their websites pushed up the search list, the company applied its phenomenal search and organizational skills more broadly, developing a wide range of goods and services you may not even have heard of yet. Check out its website for such innovations as Google Search Appliances, search engines in a box.

“Wouldn’t it be great if search within your company worked as well as search on Google.com?” it asks visitors. “From your corporate intranet to your public website and even your own desktop,” there’s a product just for you. Are you a small business, with a need to routinely index and search about 100,000 documents? Try the Google Mini, at just $2,995. Are you a bigger fish? No problem. “The Google Search Appliance makes the sea of lost data on your web servers, file systems and relational databases instantly available with one mouse click.” This box, attractively finished in gold, can access up to 15 million documents, and starts at $30,000 for half-million capacity.

How long will it be before a majority of the nation’s business transactions passes through Google? Not long, we guess.

Email? Google wants that, too, and is aggressively pursuing it through their Gmail product. According to the company, this is “a new kind of webmail, built on the idea that you should never have to delete mail and you should always be able to find the message you want.” The free service currently offers 2.6 gigabytes of storage, which archives everything you send or receive, and contains (of course) a search feature allowing you to “find the exact message you want, no matter when it was sent or received.” In addition, each message “is grouped with all its replies and displayed as a conversation.” Other free webmails look positively clunky by comparison.

The cost of all this is borne by advertisers, in small text ads down the right hand side of the page, exactly as you see them when you search using Google.com. But not to worry, there’ll be no pop-ups or unrelated banners. You will only be presented with “relevant text ads” and “links to related web pages of interest.” (What that means in plain English is that Google’s Gmail automatically scans your email, searching for keywords that give it a hint what subjects you focus on and where your interests lie.)

Next up, taking over the day-to-day office environment. Office organization is presently dominated by Microsoft, with its MS Office software. Enter Google. In October, Google and Sun Microsystems announced a joint project whose aim it is to “make it easier for users to freely obtain Sun’s Java Runtime Environment (JRE), the Google Toolbar and the OpenOffice.org office productivity suite.”

That ties Sun to Google, but if you project this venture to its logical conclusion, Sun is merely along for the ride. Google is visionary. It realizes that the transmission of information is all about speed, ease of use, searchability and storage. With a big emphasis on the last. Software like OpenOffice is just fine, but it isn’t the important component.

Picture this: An office in which all you need is an Internet connection. Once Google sets up your own personal office network for you, the whole kit and kaboodle moves to cyberspace. Throw away your filing cabinets, your hard drives, your LAN routers, your Rolodexes, everything. Just log in and away you go. You have an intranet that links everyone and everything within your company, personally and privately, with all appropriate firewalling, while at the same time you’re connected to the world.

I’ll shoot up part two next.

V

2

Part 2

Does Google Want to Rule the World? (2)

The invention of the personal computer marked the first revolution in the way business is conducted. The advent of the Internet was the second. Google’s expansion is the third.

It is by no means the end of the story, though. Ultimately, the original Google search engine, the Gmail, the Appliances, the virtual office–all of these may amount to the least of the company’s accomplishments.

So, what does this brave new future envisioned by the young Turks at Google actually look like?

We’re going to take a stab at parsing out the Google plan, with the assistance of Robert X. Cringely who understands such matters and writes about them for PBS.

Let’s start with a basic consideration: No matter how complex and far-reaching cyberspace becomes, it must ultimately rest on something physical. For purposes of our discussion, that something has two components. First, data must be moved, utilizing wires, cables, fiber optic networks, routers, wireless transmitters, and so on. Second, data must be stored, using storage devices.

We’ll take storage first, because the story is short and uncomplicated. Google’s current and potential storage needs may be huge, but the industry has done an admirable job so far of meeting those needs. You’re probably used to thinking of storage in terms of gigabytes (giga = billion). That new 60-giga hard drive in your PC may store a lifetime’s worth of information for you. But it’s not enough for a business. The next step up is terabytes (tera = trillion).

That threshold was passed long ago. The present generation stores petabytes (peta = quadrillion). That level of storage handles everything we want to do at the moment but, as we all know, need tends to expand exponentially, so the next generation is on the drawing board. It will be calibrated in exabytes (exa = quintillion).

For now, petabyte storage will suffice for Google’s purposes, leaving them with the other aspect of the problem, moving data around. To grasp the solution, we first must make a quick side trip into how the Internet works.

Let’s say you want to communicate with a pal on the other side of the country. You send a message to your Internet Service Provider (ISP), which serves X number of users, but not the one you’re sending to. So they have to route it to a larger hub, which may bounce it to another hub and so on, until it reaches the ISP that directly serves your intended recipient.

Similarly, if you want to access a web page, you have to patch into the server on which that page is stored. The overall efficiency of the system depends upon a number of variables, including the distance to be covered, the number of intervening stations, and the quality of the connections among the various routers. There’s also sunspot activity (the excuse my ISP sometimes uses to explain bad service) and, for all we know, the number of alien spacecraft in the vicinity. Among other reasons, including page design, that’s why some pages load in the blink of an eye, while others seem to take forever.

Junctures where different networks intersect are called “peering points.” But the term is also applied to the backbone of the Internet, the 300 or so sites worldwide that constitute the primary routing hubs. That’s how we’ll use it, because these are the ones Google may be looking at.

We use the word “may” advisedly. A lot of what follows is conjecture, but it’s based upon logic and common sense, an examination of current trends, and the research of the aforementioned Mr. Cringely. All quotes that follow are his, unless otherwise noted.

According to Cringely, Google is developing a data center in a box. (Though Google will not confirm this, they don’t deny it, either.) A big, 40-foot box. “We’re talking about 5000 Opteron processors, and 3.5 petabytes of disk storage [crammed into a box] that can be dropped off overnight by a tractor-trailer rig.”

Cringely’s sources tell him that Google had one such data center two years ago, that today they have 64, and that within two more years they’ll have over 300. Not coincidentally, that will allow them to place one at each global Internet peering point.

Now add in this recent job posting from Google, which is seeking someone experienced in the “identification, selection, and negotiation of dark fiber contracts both in metropolitan areas and over long distances as part of development of a global backbone network.” “Dark fiber” refers to fiber-optic cable that’s already been laid, but is not yet in use. Thousands of miles of it are available in the U.S., but there have been few takers because of the high costs of making it operational.

Google has deep pockets. It is building monster data centers and branching into fiber. A good fiber connection can patch right into a nearby peering point. Connect the dots and Cringely says this is what you get: “The idea is to plant one of these puppies [data centers] anywhere Google owns access to fiber, basically turning the entire Internet into a giant processing and storage grid.”

Or, to put it another way, “There will be the Internet, and then there will be the Google Internet, superimposed on top. We’ll use it without even knowing. The Google Internet will be faster, safer [i.e., fully encrypted], and cheaper. . . a new kind of marketplace for data, with everything a transaction in the most literal sense, as Google takes over the role of trusted third-party info-escrow agent for all the world business. That’s the goal.”

Whew.

But it doesn’t stop there, either. Since all human communication (save in-person voice) is now digital, and since digital data looks the same regardless of content, there is no reason for Google not to extend its reach into other arenas.

For that, we need another box, only this one is very small. It doesn’t exist yet, thus there is no name for it. So we’ll follow Cringely’s lead and dub it the Google Cube. The Google Cube plugs into your Internet connection and is studded with every conceivable I/O port: USB, RJ-45 (cable), RJ-11 (phone), video, audio, and so on. Some probably haven’t been invented yet. Inside it are chips for WiFi, Bluetooth and whatever else doesn’t, or won’t, require a physical port. A VoIP adapter will allow you to use the Net for phone calls. The Cube becomes the focus point for every computer, TV, telephone, fax and stereo system in your home, as well as home automation, climate control, and alarm systems. And you don’t even need a PC to run it.

For the whole thing to work, Cringely says, “especially with end-to-end elliptical encryption, you need a tight connection between the box client and a server, which is why those shipping containers need to be so broadly distributed and why Google will need so many of them, eventually numbering in the thousands to support hundreds of millions of cubes.”

To visualize the final result, Cringely asks us to “imagine a world where Google Cubes were distributed as widely as AOL CDs. It will be in Google’s interest to provide them in volume to every Google user, which is to say every broadband user everywhere. As a result, Google becomes overnight a major phone company, a major video entertainment provider, a major player in home automation and even medical telemetry.”

For a start-up cost that Cringely estimates at $3 billion or so, Google will provide support, sort, storage and delivery services to every aspect of business, entertainment and communications. Globally. Now, if that isn’t ruling the world, it’s the next-best thing.

And we may even like the result. As Cringely says, Google won’t take over the Net by stealing it or strong-arming us. “They’ll seduce us into giving it to them. And I am not at all sure that’s a bad thing.”

Any thoughts?

V

3

So is no-one interested in google taking over the world in 10-15 years?

V

4

[quote]Vegita wrote:
So is no-one interested in google taking over the world in 10-15 years?

V[/quote]

Well, as you might guess I know a “few” people that work for Google. After all, the roots of Google are right here in Stanford, and their HQ is (still) down the road…

This is about money and technology. It is not about “taking over the world” and power. The two founders are full-blown uber-geeks, who are not in any way power hungry… From what I gathered talking to them, they are ambitious, and love technology, but they are not some psycho evil geniuses.

The fact that Microsoft has made Google its number one enemy also keeps things in check – a kinda “Techno Cold War”.

Does that mean we should just relax and never worry about it? No. There is realy potential for disaster here, even if it doesn’t come from the people who control Google now. It can come in the form of Government abuse, it can come in the form of a hostile takeover, well, it can come in many forms.

But looking at what happened to Microsoft, I’m pretty sure that if they ever cross the line, the public’s response will be violent enough to keep them in check. If not us, we always have our paranoid schizophrenic European friends to slap them around a bit…

So, at least for now, and barring some cataclysmic change, there’s nothing to worry about.

5

Hmm, Google provides the best services on the planet… people use their services. In return, Google makes money.

No problems yet.

6

Microsoft was or is supposed to be taking over the world. Wal-Mart is supposed to be taking over the world. McDonalds was taking over the world, and so was Coca Cola.

At one time Apple was king, and Microsoft made Apple the second fiddle. Sears lost it’s top position to Wal-Mart, and I believe Coke is down against Pepsi, and all that sodee pop is suddenly losing market shares to different types of drinks. McDonalds is big, but having troubles trying to change their image as selling crappy food.

All of these companies can grow back to top spot, grow bigger, or get knocked off the block by a new competitor.

Somebody may actually create a search engine that works well, isn’t able to be manipulated by politics, or businesses, and is easy for normal people to use. (Sometimes it can be a chore wading through crap to find what you really are searching for.)

I am not worried about Google taking over the world.

7

I don’t think the article means literally taking over the world. I believe they are speculating that google will have in the future thier own internet, one that they control that is safer and faster than the regular internet.

All business will WANT to use it and so will all consumers because of the speed and safety of this new internet. The real big aspect of all of this is that whith the data storage and transfer abilities they are projecting, they will be able to offer all the digital services people use now, through one high speed super secure low cost hub, and it will be so cheap compared to what we have now that every household will have them.

Your phone, your internet, your cable tv, your radio, your wifi, your bluetooth, etc… The article even mentions medical applications. I can see scanning hardware being developed for home use so a patient suffering from an ailment can scan themselves and send the scanned data to a doctor across the globe.

I don’t necissarily think there is a risk unless bad people eventually control google, it essentially is no different than any other ruling class, you can have good or bad people at the top.

Here is the thing, EVERYONE will be using it, and google will be controlling it. the governments of the world are going to get with the program and get onboard googles new internet or maybe more properly thier new datanet.

In 50 years when there is no more paper and everything is done digitally, google will in theory have the ability to make reality whatever they desire. The masses of people will not care about them having so much control because of how much benefit they are recieving from them.

Again I don’t think it is a cause for concern as hopefully the power stays in good hands for a long long time. If the people at google are smart they will build a perpetuation plan that ensures this, possibly elections for new google controllers in the future. Imagine a company being so powerful that we have to elect who runs it? Interesting stuff none the less.

V

8

I think it’s fascinating what Google has done and the position they’re at now. Not just that, but pretty much everybody LOVES Google, while Microsoft, Apple, etc. all have their share of users who despise some part or all of the company.

I’m wondering how long it’ll be until Google explores a number of things, like an OS to replace Windows. Why not? Everybody’s already using Google; they keep expanding more and more.

9

I worry where the loyalty lies with the two founders, to themselves or their shareholders (who are the owners of the company).
Read their proxy, they have class B stock 100% owned by the founders that carry 10 votes compared to 1 vote per class A share.

This is very strange in the post Enron age. At the end of the day the true owners (public shareholders) have no say in what goes on at the company and the founders can do as they will.

10

well, better them than microsoft. remember Google’s motto, “Don’t be evil”

11

Well, someone needs to. Then, at least, I could find everything I lose.

12

Google is so going to overtake microsoft. Your going down bill…

13

[quote]Vegita wrote:
I don’t think the article means literally taking over the world. I believe they are speculating that google will have in the future thier own internet, one that they control that is safer and faster than the regular internet.

V[/quote]

I wasn’t trying to be that serious, but I think I failed, and actually got too serious.

Anywayseses, while I can see some serious growth, their stock has to seriously be overpriced. Popularity does that. Unless they are trying to do a Berkshire type of thing where they never split the stock and just let the share price become enormous. ($1,000 to each of the first 10 people to buy me a single share of Berkshire Hathaway. Hell with it, the first 100 people. Oh and none of that B share crap.)

I see good things on the horizon. I still remember my first 2400 modem, and that was a hell of a lot faster then the first modems. (The first modem was a guy names Jo who could run real fast.)

Google is just the tip of the iceberg.

14

Rumor has it that Google is talking with Wal-Mart to distribute “Google PCs” - very small and very cheap ($200) computers made by Google that come pre-loaded with software.

We’ll see if it’s just a rumor or not.