I mentioned I've been reading John Battelle's book on Google.
One provocative excerpt;
As a Google executive noted to me.... "We're one bad story away from being seen as Big Brother."
(note; NSA point below).
It's convenient to interpret the fact that Yahoo came close to buying Google ... and that all the main portals had decided by ca. 2000 that search was an outsource-able commodity (Yahoo moved from Open Text to AltaVista to Inktomi to Google before buying Overture...) ... as meaning that the portal competitors were all asleep at the switch.
I don't agree with that.
No one really anticipated how rapidly habits could change; as Dave Filo of Yahoo is quoted;
"Early on you couldn't put a search box in front of people and expect that they would know what to do."
More generally, there are always orthogonal threats emerging in the software/web business. It's not possible to outflank each one, and trying to means jerking the business around too regularly to gain any fundamental business momentum. (Remember that most of the other portals didn't fail -- they were sold.) I'm not sure Yahoo would look much different if it had acquired Google rather than Overture a few years ago...
But constant threats mean that rapid, quality innovation is the only way to survive. (Pabulum alert; but how many emerging growth companies have this as their primary focus for 2006?)
Google innovated around the community's measure of relevance;
.... it simply laid bare the often ugly truth of how well connected a site happened to be.
Pay for that relevance via pay-per-click auction pricing for non-banner advertising, create a self-service syndication network;
"Have a credit card and 5 minutes? Get your ad on Google today,"
and, ultimately;
... in minutes, publishers could sign up for AdSense, and AdSense would then scan the publishers' Web sites and place contextually relevant ads next to the content...
and VOILA!, Google (Market Cap: $122.61B. GM market cap: $10.8B. IBM: $198.4B )...
Next; thoughts on management by massively parallel innovation....
