Brij’s One More Idea

Google is definitely on an outstanding trajectory. It’s stock hit $600 last week prompting NYT columnist Steve Lohr to lay out all the growing risks ahead of Google. His main question - “Can anything stop the ascent of Google’s stock?”.

As if too much of a success has to be a cause of concern. Is it in our nature to doubt and hit our head whenever we see too much deviation from the average?

I think answer lies in the unfulfilled promise of web1.0. John Doerr spoke too early when he said “The Internet is the greatest legal creation of wealth in the history of the planet”. Google is just methodically executing on that promise. Not all the dominoes are down and many verticals are still standing tall. They will soon face information economy’s biggest weapon - advertisement driven attention arbitrage.

There is still lot of scope for Google to grow. Search is a numbers game and just wait for land of potentially infinite keyboards to join the internet. China, India and Russia. Whenever we will see blowblack, then Google’s scale and distributed computing will really shine.

That doesn’t mean they cannot screw up. Their execution risks are of different kind. I would put government intervention right at the top. As they sit on more and more of user data and become central to all communication channels, they will be both target and partner in all government schemes. Move-on ad controversy is just one example of that. They will be getting caught more and more in ugly political cross firing. They have power base which can deem them as a virtual political party, or virtual nation or may be a new age ideology.

Other risk they have is in staying true to their culture. In many ways Google’s culture is of quirkiness and boldness. They get free PR because of that. If they loose that culture then there will not be much to differentiate between Microsoft and Google. They need to make sure they keep throwing outrageously bold goals. Anything which dilutes that culture is a huge risk.

Also I doubt there is any threat from search startups. Tell me how many companies beat Microsoft by writing a better OS? Zero.

What matters is how many companies are tying their destiny with the adwords/adsense ecosystem and there are many. If Facebook can build better ecosystem, probably there will be some nervousness around it.

Reality is not many companies are trying really bold ideas. Most of them are playing catch up to Google.

So I would say follow their boldness graph. Any talk of “margin protection” or “capital efficiency” by their triumvirate should be a sign to sell. Till that time enjoy the ride!