Saturday, 22 October 2005

What does Google want?

I’ve been doing a lot of networking in the last couple of months, meeting new people and getting in touch with old friends and co-workers. It’s fun to have the time to share ideas again, after being heads-down with Palm for six years.

Most of the conversations eventually come around to the question, “What does Google want?” It’s a great topic because Google has enough money, and is ambitious enough, that it might be planning to do almost anything. Google is also deliberately coy about its intentions, creating a sort of giant corporate ink blot test. Our theories about it may say more about our own desires than they do about Google itself.

Here are the three leading theories I’m hearing:

Theory 1. Google wants to control the ultimate OS. In this perspective, Google views Microsoft as its most important competitor/target, and is carefully executing a long-term plan to make the Windows/Office monopoly irrelevant. By creating more and more programming interfaces to its services, Google is causing applications development to gradually shift away from the PC’s APIs to those embodied in servers on the network. Windows doesn’t necessarily disappear, but it stops being the control point for computing innovation.

It’s kind of like Sun’s old slogan, “The Network is the Computer,” except in this case someone’s actually making it happen.

Some people view Google’s recent semi-endorsement of Sun OpenOffice as proof that Google’s trying to undercut Microsoft Office. You can get a fairly enthusiastic account from InformationWeek.

Theory 2. Google wants to destroy all the carriers. In this view, Google’s main priority is to take over the transport of content and information, rather than just organizing it. Every company that distributes content and information -- phone companies, television networks, cable companies, and so on -- is a target as Google seeks to deliver everything through the Internet.

The prime exhibit in this theory is Google’s purchase of dark fiber resources. Combine that with Google’s experiments around video downloading and Google Talk, and you can draw a scenario in which Google uses the Internet to take down all of the middlemen who carry all of our entertainment, information, and communication.

I think this scenario is especially appealing to many people in Silicon Valley because of the visceral dislike that so many of us in the tech industry have toward carriers of any sort. I should probably do a whole article on why this is, but the short summary is that carriers get in the way of things that many tech companies would like to do. A lot of people in Silicon Valley would be very happy -- like, fall of the Berlin Wall happy -- if the carriers just disappeared some day.

Their hope is that Google’s going to make it happen.

Theory 3. Google is making it up as it goes along. Those of us who have worked in large, visible companies know how good people on the Internet are at making up conspiracy theories. At Apple and Palm I used to shake my head in amazement when some commentator came up with an amazing master plot that linked several completely independent things our company was doing, and presented them as a single conspiracy.

We were never sufficiently clever or organized enough to pull off most of the plots that were attributed to us. Sometimes big companies do things because there’s a plan, but just as often they do them because of internal politics or random unconnected ideas. In my experience the broader the supposed conspiracy, the more groups and business units it links, the less likely that there’s an actual plan.

Amid all the rumors about Google, one thing I know to be a fact is that it deliberately hires the best computing graduates in order to keep them off the street. Google’s founders came out of academia to steal a march on the search leaders, and they’re very worried that someone might do the same to them. The easiest way to prevent that is to hire all the brightest computing grads and put them to work. It doesn’t really matter what they do, as long as they do it for Google rather than someone else.

In this view, much of Google is more like a huge research lab rather than a traditional company. Sure it’s experimenting with VOIP and video downloading -- it experiments with everything. But that doesn’t mean all the experiments are controlled by a single master plan.

This theory isn’t nearly as popular online as the others, but I heard it from a very experienced consultant and technologist in the valley (who I won’t name because it might screw up his ability to do business with Google). It’s also the theory I believed -- until recently.

My opinion: It’s theory number 2.

What turned me around was Google’s recent proposal to blanket San Francisco with WiFi. Although the Google proposal is far short of a formal bid, the fact that they made it at all says a lot to me. They’re willing to put their brand and reputation on the line for a huge fixed infrastructure of wireless base stations, and all the customer support headaches that would go along with them. That’s a much different business model than Google has used in the past, and it’s not something a company would ever propose lightly. There’s no way this is a random experiment.

Now for my speculation. I don’t think Google would do this only for the Bay Area, and I don’t think local advertising would produce enough of a return on investment to justify the cost and risk associated with creating one of these networks. I think it’s a trade-up play -- you give away the 300 kbps service and then charge for a series of add-on services on top of it. Voice telephony (replace your landline), and video download (replace your cable TV company) are two obvious ones because there’s an established market for both of them that Google can cannibalize quickly. Plus of course they’ll trash the DSL business.

If I’m right, we should expect to see Google start dabbling in the creation of other services that it could drive over this network. They should also offer to un-wire other cities in the Bay Area.

Unfortunately for those who want the cellphone carriers to go away, I think the current technical limitations on WiFi phones -- standby battery life a tenth of a cellphone -- will make the wireless voice carriers the last domino to fall. But I believe Google is truly gunning for everyone else.

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