Google is worth billions because it delivers readers to advertisers better than any other media outlet—despite not always being the best search engineby Andrew Brown / December 17, 2005 / Leave a comment
The Search by John Battelle (Nicholas Brealey, £25)
If Google were to disappear tomorrow, how much difference would it make to the world? Google does things that are indispensable to anyone using a computer in the modern world. Until you sit down and enumerate them, it isn’t obvious just how vast the company’s reach could be.
Here is my own shortlist: as well as the obvious internet searching, which I do maybe 30 or 40 times a day, Google supplies the maps and directions when I want to take a journey; it organises the pictures on my hard disk and does most of the editing they will ever get. The Google Talk program lets me talk—literally—to my sister, and to chat onscreen with my children, even when one of them is in the same house. There are some Google services I don’t use much: Gmail, which would keep all my email online, permanently searchable, and available from any computer on the net; Google News, which keeps an eye on the papers for me; and Google Reader, which could watch all the blogs and many of the websites I read in the same way. Blogger, which Google owns, could publish my blog; and coming off the net altogether, I could use the Google desktop search to rummage through everything on my hard disk and to keep all my files and emails indexed and searchable.
The speed with which Google reached this eminence is astonishing, even in internet time. The founders got their first cheque from a backer—for $100,000—in August 1998. When they went public in August 2004, they had $3bn in cash in the bank and the company was worth roughly $50bn. Typing this in November 2005, I find this worth has more than doubled to $108bn, give or take a few million. What’s really astonishing about that figure is that I didn’t find it from Google. It happens that Yahoo has a better financial site. In fact, there are alternatives to all the services that Google offers, some of which are clearly better. Between them, Yahoo, Microsoft and Amazon can duplicate everything that Google has to offer, and in many cases, Yahoo’s product has the edge.
Even the most glorious of all Google’s projects—the idea of digitising and indexing thousands of books in five leading libraries, including Harvard, Oxford and the New York public library—is being imitated by Microsoft, which has sidestepped the copyright issue by scanning only books that are out of copyright. So it would not be entirely inaccurate to say that were Google to disappear tomorrow, the world would not change that much.
The company’s two great innovations, brought out in John Battelle’s history, were to concentrate on searching at a time when no one else—least of all the other search companies—understood how important it was, and then to discover how to make money from limiting its on-screen presence when everyone else was trying to take over as much as possible of the user’s screen space.
Google’s searches were quicker and simpler than anyone else’s. Google’s ads are smaller and less conspicuous. None the less, they are the foundations of the company’s fortune, because they guarantee to advertisers that their ads will be shown only to people who are probably interested in the product in the first place. The system isn’t infallible—once, when reading an article on the Times website about women bishops, I saw an ad with the search words “Jesuit Priests” underlined, followed by an invitation to “date Catholic Singles!” In a similar way, if you ask Google Maps for brothels local to Saffron Walden, it directs you to the Medical Research Council in Cambridge. None the less, for the vast majority of advertisers, search technology in general, and Google’s in particular, offers an assurance of targeting that print or television never can.
This is going to eat most of the newspaper industry, and everyone knows it. If the media business is essentially a matter of delivering readers to advertisers, there is a sense in which Google is already the most powerful media company in the world. Battelle suggests that in a world of digital television, this will all go further, so that the ads you see on television at night will be personalised to match the searches you made during the day. That seems to leave commercial television on the scrapheap alongside the newspaper business.
One of the least appreciated facets of the Google story is that it depends almost entirely on free software. The whole system for searching the web and indexing what is found consists of hundreds of thousands, perhaps millions, of computers running the free Linux operating system; the programs that serve the results up to us are also written in free languages. One of the principles of the free software movement is that sharing information makes it more valuable, and this—translated into financial terms—is the guiding principle of what’s known as Web 2.0, the successor to the first wave of dotcom mania. The surge in Google’s stock price is evidence that a second bubble may be under way.
The global implications of Google’s hoarding of information are mentioned, almost as an afterthought, at the end of Battelle’s book. Google’s databases offer, in theory, the prospect of a degree of totalitarian control that neither Stalin nor Mao could have dreamed about. They are the records of the thoughts and desires of anyone who sits at a connected computer. Google itself would not consent to be used in that way; and it might not even be possible to tie together the knowledge gathered by its desktop search, its email searching and its record of web searches. But even if Google can’t do it, the technologies that it has brought together in the service of advertising can certainly work in the service of more sinister forces; no doubt the Chinese government has researchers working on the task right now.