Byline: David Rae.
Claiming to have transformed the culture of our society is one thing, claiming to have rewritten the rules of business quite another. Yet both are claims made of Google and its peers by author John Battelle in his new book, The Search.
The Google phenomenon is a fascinating story, and one which Battelle tells with some skill. Born in a Stanford University dormitory room in August 1996, the company has subsequently grown into a global behemoth with a market capitalisation of almost $92bn. "In Google, many see a company that some day may supplant Microsoft as the most important - and most profitable - corporation ever created," says Battelle.
Google's servers play host to perhaps the most exhaustive cross-section of data ever compiled. They record the whims and wants of our society in such a mind-blowing level of detail and granularity that it is almost impossible to fully comprehend. "Etched into the silicon of Google's more than 150,000 servers, more likely than not, are the agonised clickstreams of a gay man with Aids, the silent intentions of a would-be bomb maker, the digital bread crumbs of a serial killer," he says.
It is what he rather annoyingly refers to as the Database of Intentions. "Google had more than its finger on the pulse of our culture, it was directly jacked into the culture's nervous system," he says. "Through companies like Google and the results they serve, an individual's digital identity is immortalised and can be retrieved upon demand."
His reasoning is that with every single search request, of which there are millions each day, Google is taking a snapshot of the desires of society. It is an immensely powerful database, yet one which is extremely difficult to harness - and one which Google continues to struggle with to this day. Two attempts at harnessing that power immediately spring to mind: Google Mail and Google News. Both are well respected and well used, but are ultimately relatively minor parts of the Google empire.
There is no doubt that Google has had a huge impact on the way we conduct business and has played an integral role in the digital economy's continued growth, but what earns the company its revenues is one of the oldest forms of business around: arbitration. Google buys information - in effect, customer clicks - cheaply from third-party sites and sells them on at a profit to corporate websites.
In truth, Google is a media organisation as much as it is a technology company - its revenues come from advertising. "All those searches, and all those searchers, have translated into a major business opportunity - in fact, the fastest growing business in the history of media," says Battelle.
But Google, it seems, wants more, and an October announcement lends more weight to Battelle's assertion that Google may ultimately overtake Microsoft as the most important and most profitable company in the world. By jumping into bed with Sun Microsystems, a high-end computer hardware and software developer, Google has effectively pitched itself in an entirely different market. "Google is recrafting itself from a search company to a broad-based services company," says software analyst Dwight Davis in BusinessWeek magazine.
The feeling is that Google wants to work with Sun ultimately to offer software that physically resides on the internet - or, more accurately, on Google's servers. Companies would not buy software and then install and manage it themselves; rather, they would rent it from the likes of Google and Sun. It is not a particularly new idea - a few years ago, the application service provider model tried to tap into exactly the same idea.
What has previously held the market back may no longer be relevant, however, at least to Google. Historically, companies have been loathe to trust a third party to look after their business-critical applications. The lack of trust extended to privacy and application stability issues.
But what Google has done is to prove itself more than capable of maintaining a mission-critical application. Perhaps more importantly, it has built up a level of trust with a whole generation of internet users - something that Microsoft could never boast.
One of the most important but possibly least thought of uses that Google could make of the Database of Intentions is to have earned the public's trust, for with it a variety of business opportunities present themselves.
So while Battelle's claims that Google has rewritten the rules of business should be taken with a pinch of salt, that could well be next. Watch this space.
David Rae is Deputy Editor of Financial Director.
