Google can do no wrong. It’s forthcoming IPO will be the most successful in history. It will completely own the search market and then mail and whatever else it tries its hand at. It’s the Microsoft of the 21st Century. Its corporate culture is an open geeknoid ideal to which we can only hope to aspire. It will create the humongous centralized personalized computing infrastructure which will set the next stage for the evolution of mankind.

I’ve never seen quite such a perfect contrarian play. Although as usual, the contrarian scenario will probably take at least several years to unfold. (Disclaimer: the writer passed up an opportunity to buy MSFT at $14 in 1988, thinking it overvalued.)

Search is going to be much more competitive than it looks. Advertisers have a limited number of dollars and are going to deploy them where they are most efficient. Meanwhile, there are already dozens and dozens of sponsored listing brokers that will be fighting tooth and nail to get their piece of the business. They’ll compete coming and going.

Mail is not as big as it looks. The privacy issue won’t go away. More basically, the Google business model for mail will fall apart when advertisers realize that people don’t want to click on ads while they’re trying to read their mail. The 1GB of storage is nothing special; Yahoo! can do that tomorrow. Searching all your mail is a very nice feature, but there are a number of other ways to do that that don’t involve keeping all you mail on one company’s servers; an interesting one is Zoe.

And the Fortune article that painted Google as basically being unmanaged chaos was probably being generous to them. Someone I know recently applied for a job there and was finally contacted five months later. Google then spent two months taking him through an opaque, unstructured interview process that eventually went nowhere. That’s no way to run a company.

Google has a lot of international revenue—but that’s just because search, when done right as they did, is pretty internationalized out of the box. The same won’t hold for any of their newer services, such as zip-code search, which will require huge effort to roll out internationally, and face much stronger local competition—and Google doesn’t even have people on the ground in some major markets.

Google will be fully-priced as of the IPO. There may be some upside as they experience good growth over the next few years, but I’d get out sometime in 2006.

This entry was posted on Tuesday, April 27th, 2004 at 16:18 and is filed under scitech. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.