Claiming to have transformed the culture of our society is one thing,
claiming to have rewritten the rules of business quite another. Yet both are
claims made of Google and its peers by author John Battelle in his new book,
The Google phenomenon is a fascinating story, and one which Battelle tells
with some skill. Born in a Stanford University dormitory room in August 1996,
the company has subsequently grown into a global behemoth with a market
capitalisation of almost $92bn. “In Google, many see a company that some day may
supplant Microsoft as the most important – and most profitable – corporation
ever created,” says Battelle.
Google’s servers play host to perhaps the most exhaustive cross-section of
data ever compiled. They record the whims and wants of our society in such a
mind-blowing level of detail and granularity that it is almost impossible to
fully comprehend. “Etched into the silicon of Google’s more than 150,000
servers, more likely than not, are the agonised clickstreams of a gay man with
Aids, the silent intentions of a would-be bomb maker, the digital bread crumbs
of a serial killer,” he says.
It is what he rather annoyingly refers to as the Database of Intentions.
“Google had more than its finger on the pulse of our culture, it was directly
jacked into the culture’s nervous system,” he says. “Through companies like
Google and the results they serve, an individual’s digital identity is
immortalised and can be retrieved upon demand.”
His reasoning is that with every single search request, of which there are
millions each day, Google is taking a snapshot of the desires of society. It is
an immensely powerful database, yet one which is extremely difficult to harness
– and one which Google continues to struggle with to this day. Two attempts at
harnessing that power immediately spring to mind: Google Mail and Google News.
Both are well respected and well used, but are ultimately relatively minor p
arts of the Google empire.
There is no doubt that Google has had a huge impact on the way we conduct
business and has played an integral role in the digital economy’s continued
growth, but what earns the company its revenues is one of the oldest forms of
business around: arbitration. Google buys information – in effect, customer
clicks – cheaply from third-party sites and sells them on at a profit to
In truth, Google is a media organisation as much as it is a technology
company – its revenues come from advertising. “All those searches, and all those
searchers, have translated into a major business opportunity – in fact, the
fastest growing business in the history of media,” says Battelle.
But Google, it seems, wants more, and an October announcement lends more
weight to Battelle’s assertion that Google may ultimately overtake Microsoft as
the most important and most profitable company in the world. By jumping into bed
with Sun Microsystems, a high-end computer hardware and software developer,
Google has effectively pitched itself in an entirely different market. “Google
is recrafting itself from a search company to a broad-based services company,”
says software analyst Dwight Davis in BusinessWeek magazine.
The feeling is that Google wants to work with Sun ultimately to offer
software that physically resides on the internet – or, more accurately, on
Google’s servers. Companies would not buy software and then install and manage
it themselves; rather, they would rent it from the likes of Google and Sun. It
is not a particularly new idea – a few years ago, the application service
provider model tried to tap into exactly the same idea.
What has previously held the market back may no longer be relevant, however,
at least to Google. Historically, companies have been loathe to trust a third
party to look after their business-critical applications. The lack of trust
extended to privacy and application stability issues.
But what Google has done is to prove itself more than capable of maintaining
a mission-critical application. Perhaps more importantly, it has built up a
level of trust with a whole generation of internet users – something that
Microsoft could never boast.
One of the most important but possibly least thought of uses that Google
could make of the Database of Intentions is to have earned the public’s trust,
for with it a variety of business opportunities present themselves.
So while Battelle’s claims that Google has rewritten the rules of business
should be taken with a pinch of salt, that could well be next. Watch this space.
David Rae is deputy editor of Financial Director