Search engine turned portal-omnivore Google has a reputation as being an ethical company. The informal corporate motto is “Don’t Be Evil”. But two stories today have made me start to wonder if maybe the ‘magic of the market’ has done its bit, and Google is starting to behave like pretty much any old monopolist.
[T]hey decided to basically copy our page and slightly Googlify it. If you look, the design, layout, and most of the text are the same!
He [Voices.com CEO David Ciccarelli] claims the Google ad product is nearly identical, although he hasnâ€™t seen it yet and has nothing to go on but the CNET quote above. But he also says that for the last couple of months traffic to the site from Mountain View (where Google is headquartered) has gone through the roof, accounting for about 5% of total voices.com traffic. Heâ€™s suggesting that Google has scoured the voices.com site to figure out what to copy in the Voices.com business model.
Neither of these two stories by themselves is very remarkable. Web designs get copied all the time, and it’s very unlikely this was the deliberate decision of any of the senior executives (like Microsoft’s recent embarrassment is likely just one rogue designer). And it’s a rough business out there, but competition is fair game. Just because you got there first doesn’t mean you own the land (AltaVista, anyone?).
But together these stories give a sleazy feel that goes against the image Google has been trying to paint. It looks like the company is getting a bit too big to control, the feature sprawl is getting a bit too broad to be properly policed, and the quality is suffering as diminishing returns set in on the staff.
So what’s going on here?
Google is a really good search engine, but nothing else it’s done has really impressed me except email. Google ‘gets’ search, and has come up with some good advertising solutions. The other businesses seem to be attempts to create greater traffic to their site, and to create new revenue streams that are increasingly far removed from their core business of web search.
None of the core search engine business really justify the price to earnings ratio the stock price implies at the moment: 53.1, compared to a ‘sane’ figure of around 15-20. That kind of share price suggests that investors are expecting massive growth in future earnings. Given that Google is at maturity in the search engine business (with little market share left to take), that growth can only come adding new businesses to Google. Or, to put it another way, investors are implicitly expecting earnings to quadruple, which even YouTube isn’t going to do on its own.
So this makes Google a shark: it can’t stop swimming, or it’ll die. Every month Google needs to be doing something that expands its business, makes its revenues larger, and makes the investors confident that it’ll keep growing. As soon as they stop swimming, the share price is going to take a sharp, dramatic dive.
But sharks can’t stop to be nice. Google can’t afford to be “not evil” now, if being “not evil” causes it to lose any of these opportunities to expand revenue. The wedge will be thin at first, with these kind of mild, almost unnoticeable offences. But they have to grow over time, the imperative of the stock market (and the insane valuation of Google) demands it.
It’s a bit sad really, and it would’ve been nice if Google hadn’t become the single-stock manifestation of the bad-old-days of the late 1990s tech boom, but it’s pretty inevitable now. We can just hope that a pretty good search engine sticks around once all the dust has settled.