This morning’s Observer column.

The scariest question a venture capitalist can ask a company seeking funding is: what if Google enters your market? For years, this question has haunted folk in mainstream advertising. They had already seen Google collar an overwhelming share of the targeted-advertising market via its AdSense and AdWords technology, the system through which small, hopefully relevant, text ads appear alongside the results of internet searches.

On the back of this, Google become a money-printing machine and now has nearly 70% of the paid-search market. This is nice for it in the short term, of course, but raises a strategic issue. What would the company do when the paid-search market was saturated? Where would the next growth area be?