Fortune on Google
Interesting piece. First, the good news…
“When the numbers pertain to Google, they look very, very good. In 18 months the company has quadrupled in size, now employing more than 1,300 people. Annualized revenues have sextupled, to about $900 million. Annualized pretax profits have grown by a factor of 23, to about $350 million, according to a handful of people who have been told the figures. Only a few high-tech companies in history, like Apple, Compaq, Sun, and more recently Amazon.com, have generated that kind of revenue growth so fast. None has made as much money doing it — not even Netscape, which grew faster than Google has but made money in only one of its years. “
Then the bad news…
“Google has grown arrogant, making some of its executives as frustrating to deal with in negotiations as AOL’s cowboy salesmen during the bubble. It has grown so fast that employees and business partners are often confused about who does what. A rise of stock- and option-stoked greed is creating rifts within the company. Employees carp that Google is morphing in strange and nerve-racking ways. And talk swirls over the question of who’s really in charge: CEO Schmidt or co-founders Brin and Page?
Such travails are hardly surprising in a startup that has grown so big and so fast. But now is a particularly unfortunate time for Google to be facing them. Competitors –the biggest and most powerful on the Net — are coming on strong. Microsoft is spending billions to build its own search engine that will be incorporated in both its online service MSN and its new operating system, due in 2006. That could push Google off tens of millions of PCs. Yahoo in the past year has methodically acquired the other top search engine companies — Inktomi and Overture Services — and is believed to be weeks away from ending its long partnership with Google so that it can compete head-to-head. Other heavyweights — AOL, eBay, and Amazon — are also drawing battle plans. All are aiming for what they see as Google’s weak spot: lack of customer lock-in. Though its search engine is a wonderful tool for using the Net, what happens when a better search engine comes along? Or just a good-enough search engine in the hands of a powerful rival? Is there anything to keep users wedded to Google? “Google has a lot of momentum, but its current position is probably not defensible,” says an investor.”
This is typical business-magazine hooey. The only thing that will stop people using Google is if someone comes along with a search engine that WORKS better.