the cost of entrance to google's internet sector business is not too high. if yahoo can be wiped clean, google also stands in the same danger, unless they start to diversify more into tangible goods, which they are doing more and more, however the danger is still there unless thye become a producer like Microsoft and not an innovator.
Cost of entry into Goog's business is so high as to make it impossible for someone to enter. Goog's datacenter has 20x more data than walmart. When it comes to Goog ever dip is a buying opportunity until it hits 300B in market cap.
theres virtually not much barrier to entry of sci grad students with some venture cap to start something like innovative like google at its prime stage. dont think sergei and page needed to consider book reproduction costs of yahoo's dataservers.
No idea about goog's fundamentals. I went long at 501 off first sign of strength near an area I was watching. Dumped half position at 530, locked in a profit and hoping it runs more... Would love for this to be a long term bottom to the stock, but I realize chances favor me being stopped out. Stop @ 486...
I really will urge you to visit goog's datacenter if you can. I don't think VC capital exists for that much equipment. On top of that it is all custom designed with proprietary OS. You cannot replicate Goog's algorithms i.e. even if you get the capital you won't get the people. Just think about it, if it were possible, Yahoo would have done it by now and if not Yahoo then Microsoft or AOL. The amount of data that is stored in those datacenters is the real barrier to entry. For you to replicate that data, you will have to buy goog. No-one has that kind of money.
its obvious individual will not be able to immediately gather loans or VC to build datacenters, in order to produce an advanced search engine. the cost of switching for the average user is as easy as typing in google.com to msdn.com for example. if it starts to tick, then these costs are transfered to shareholders and other investors along teh way just as sergei and page didn't have raging money chest hanging around in their garage at their disposal. but eventually gathered momentum and the happy story so on. im talking more about the fact that creative destruction is inevitable, more bright young minds will continue to penetrate this industry bigger and better, as for as i know google's "algorithm" is a product of human innovation, not measured by number of servers or databases. im pretty sure we'll continue to see likes of google popping up in the next 20 years or more. will google face similar fate like yahoo? time will tell. as far as the future, no one knows whats in store. the rise of google was unexpected, unpredictable. such is the nature of this industry. you want to play the game, sure other's may have large chunk of the field. but its the same innovation from the two bright minds that brought google, and it can and will be continually brought to surface in many different forms. however its not the case in large monopoly businesses like microsoft who is a producer and will remain in business for a long long time. the cost of switching millions of computers and servers based on mirosoft to say linux or some "proprietary OS" is huge for much of world. inputting google.com vs. notgoogle.com is not. also i question this statement: "The amount of data that is stored in those datacenters is the real barrier to entry. For you to replicate that data, you will have to buy goog. No-one has that kind of money." thats not the point. you do not have to exactly replicate all of their components to build a succesful search engine. dont you think yahoo had similarly large amounts of technological hardware lying around as well as data(as you would describe barriers of entry) before two post-grads decided to create google? also theres no firm guideline to recreating google's success. the data in the datacenters cannot accounted as a major cost to entry, because obviously like you say, if that was the sole success and core of google then it would've been emulated far better by microsfot. remember they planned it for a thesis, never planned for it to be a media marketing company. there have been many many large innovators who have died out, with technology pretty much same as google if not better. if the dataservers were the sole cost to entry to this market, why is google faltering in leading IT havens like south korea? obviously with their massive data stored, they cannot be challenged right? it'd be a shame if a few18 year olds who get together on the weekend and craps out the next killer ap that overshadows google or microsoft by a huge margin? this indicates, the dataservers were never the sole entry of barrier. innovation, and creativity can be quickily realized as a product, which is why its so unpredictgable who will be the king and how long they will remain so. the dataservers and data stored in them are the result of google's growth and definitely will not stop new players. also we are speaking that the tech and costs to reproduce these data will remain the same, which obviously cannot remain so as further technologyimprovements would cut such costs down. hindsight is 20/20 as they say. success of google is very much a black swan event. you should also see the vass amounts of giants with yes acres of "entry barriers" in form of hardware servers and databases that went under with rise of new companies. its simply an unpredictable game this industry.
ââ¬Â¢ Google Filing Warns on Near-Revenue Growth (Tue 11:37am) GOOGLE is headed back below $500, looking for new 52 week lows soon.