January 21, 2006

Google - Hype or Reality?

When Google was initiating plans to go public, they went against traditional IPO methods, opting for a more public-facing open auction, which in theory democratized the process. Eager to get in on what was possibly one of the biggest offerings of the decade, I put an order in for 100 shares, at $90 a pop. $9k down on an idea. But there were definitely concerns. The world of the financial markets is filled with examples of companies that peak on their first day of trading, only to plummet afterwards. Google immediately ran into scandals over improperly accounted for options, and an ill-advised Playboy interview by the company's two co-founders.

As a result, I panicked, and got out. BIG mistake. As we all know, Google stock kept going up and up and up. Sure, I got in at 180 and rode it to 270, making some money, but that 90 to 270 ride would have been much better. And now, with some analysts saying the stock is sure to go to 500, it of course does a U-turn, down 36 dollars on Friday alone, and falling below 400. Did the company's fundamentals change? No. Did the site go down? No. So what makes it worth 9 percent less one day as opposed to the previous? Trends? General market worries? Maybe. Yes. (Muffled response)

So what makes Google Google? And what's to prevent these guys from becoming Microsoft - purveyor of bloated software that comes out on Windows first and having their impact on many industries? Some might say that's already happening. Google is #1 in search by a long margin. There's no good reason to use anybody else. Google Desktop (for the PC anyway) is a great tool to search old e-mail and documents. Google Earth is a fun tool. GMail is interesting. But what else? Google Talk isn't any better than AIM or iChat. The Google Toolbar is just another way to get back to Google.com. Froogle isn't any better than Shopzilla.

In order for Google to remain #1 and continue demanding that they deserve top dollar, they'll have to become more than the world's best Web advertising firm and search utility, but to offer alternatives to Microsoft, Apple, Sun and others that have come commonplace. If they don't, then we can start to see the complaints now. Over-extending their reach into user privacy, shoddy software that is optimized for one platform over another. Not offering a true alternative.

I want Google to win at search. We're tired of Microsoft's attempts to do things half-ass and winning. I want Google to win at E-mail over Yahoo and Hotmail, and I want Google Desktop for Mac. Spotlight is okay but not outstanding. But I want them to offer the best quality software and Web tools out there without acting like a monopolist. We'll see.

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