As for the "paradigm shift" thing... If I had mentioned 3 years ago that Jobs and Apple were planning to seize control of the music download market... Using the competitive advantage that the iPod gave then... Sparahok would have cracked. The main difference is that the entire music business might be worth maybe 10 billion... While the PC desktop is worth 100s of billions. rm+
I run a serious business... And my email is almost 100% GMail. I have ** decided ** that I can trust GOOG with my mail... And each email is also forwarded to my computer. We are talking average people that do: email, web surfing, word processing, music, pictures, video... that's about 90%. To do this... Some cab driver has to buy a complex box from Dell... Along with $200-$400 worth of software for MSFT... Along with endless minor quirks and hassles and worms and viruses... Everything prone to complete failure... And replacable every 3 years or so. Give people an ad-supported TV like appliance.... And you will have a "paradigm shift" far greater than Apple has engineered. That's what GOOG is working on... Most of the pieces are far advanced. If you believe this will work buy GOOG... If not... sell. But don't give me this fine parsing of next quarter's search/ad revenues... It totally misplaced. rm+
They're not running a custom OS, they are running Linux. Their custom software is the search application. That means the scalability is specific to the problem domain. Google has a huge competitive advantage in search, no question about it. But you are saying that's not really the Google secret sauce, it's really their computers, their network, and their system software. Yet Google prides itself in using commodity hardware, commodity networking and open source system software. They openly boast that this is crucial to their strategy. It certainly works, but all you need to duplicate it is money. Dude, they are running Linux. You can download it off the web in half an hour. Five years my ass. There are lots and lots of people in the world who can do this kind of thing. Google has hired many of them. But, there are many others in the valley and around the world who are burning through VC capital as we speak, hoping to do to Google what Google did to Yahoo, what Yahoo did to AltaVista, what AltaVista did to Lycos. The profit motive prevents any company from building a monopoly on talent. Silicon Valley is littered with the corpses of dynamic, engineering driven companies that thought that talent was all they needed. It's not a durable advantage. Martin
RedMan - please, take the time to read "The Wall Street Guide to Short Selling" - it reads like a biography of GOOG - we are all here to help - not trying to insult you - this is short 101 stuff
I have never mentioned the subject of shorting in this thread (???). That said... shorting an irrationally priced high-flying stock that trades on emotion like GOOG... is financial suicide. It's an extreme example of "fighting the tape". You can only do it in the context of a sophisticated ** hedge ** fund that specializes in short selling where your risk is spread out and limited with options and diversification. Every arguement that can be made for shorting GOOG today... sounded just as good when GOOG was $100. rm+
Martin, You mostly know of what you speak... The 100,000 boxes may be running Unix... but Google OS is the valuable piece that controls the 100,000 boxes and provides scaling and extreme fault-tolerance. And makes it all customized for Web processing. Everyday 1000 boxes die... automatically fail over to other nodes... Google replaces 1000 boxes off the shelf... plus adds another 100 boxes to expand. Google does not talk much about it's central OS, but here's one link: http://www.kottke.org/04/04/google-operating-system It shouldn't take you more than 2-3 minutes to read it. And in terms of the talent point... Really... how many people can design and implement what's described in that link. A few 100. Genius is in short supply. Just look at EliteTrader... 5% geniuses and 95% wannabees. Just like 2+2 Forums... 5% poker pros and 95% degenerate gamblers. It's like there's only a few 100 major league level baseball players in this world... and Google is the New York Yankees. rm+
RedManPlus, All this stuff that you showed us is very exciting, and I wish Google success in this huge project. The problem is that this idea has been promoted in blogs for a couple of years now but Google itself still does not talk about it or does not show any change to its business along those lines. I understand that this type of project takes time but how do I know these are not just rumors fueled by the secrecy of Google management about their business? If they do not want to talk about what they are doing, they must be up to something big? S
It kind of reminds me of the modus operandi of the Federal Reserve Board governors. (i.e. one week inflation is in check, the next week no end to raising rates. Whatever is needed at that moment seems to dictate the rhetoric).
If you want to call it Google OS you can. But it's not an operating system; it's almost all user space. The only part that is arguably system software is the filesystem, and distributed filesystems aren't exactly a new idea. If you told Larry & Sergei that their filesystem is their big competitive advantage they would laugh in your face. Your sources have a big hard-on for Google technology but it's really not as ground breaking as they think, particularly outside the core search application. And to be honest, that's a good sign. Startups with lots of brainpower can easily get obsessed with research and intellectual property. Google started off from day 1 actually building shit, hacking stuff together, not afraid to use spit and baling wire if they had to. I think that, more than their PhD power, is one of the keys to their success. You can think what you want, but I personally know close to a hundred software people of that caliber and only about a half dozen of them work at Google. Whatever impression you get from the press, Google really hasn't vacuumed all the talent in the Bay Area, much less the whole software engineering community. Google gets many of the best and the brightest, but it's still a big world out there with lots of smart people in it. Furthermore, they can't chain those people to their desks. Once the Google momentum slows down, once the stock grants start thinning out, a lot of those people will want to take their smart ideas and do the next big thing on their own. Here's an cautionary tale for those who think smart employees are a durable competitive advantage. Silicon Graphics virtually owned computer graphics in the early 90s, and every smart person who wanted to do graphics went there. They were the darling of Wall Street and Silicon Valley, and seemed to have a lock on talent in the field. But less than a decade later, all that talent was at Nvidia, ArtX, and 3Dfx, busy eating SGI's lunch. SGI's now on the verge of bankruptcy. In fact, just yesterday they laid off almost every remaining graphics employee. Martin
I don't know how serious your serious business is, but it contradicts all my experience on the matter. You may be using GMail for your mail, and it works fine technically, but to most people it looks like a "free", "throwaway" "non-real" address, like hotmail.com and yahoo.com. Not to mention that many businesses shy away from sending email to Gmail addresses, due to potential conflicts, e.g. I send you an offer with prices for green widgets, and at Gmail it gets displayed to you next to Adsense ads from my competitor. Just google <grin> around to see this being discussed in webmaster and ecommerce forums for the past 2yr. Also, I'd say this "paradigm shift" from local desktop, to remote "virtual" google desktop will never take place. People thought we'd all still be renting cycles on 1970's style mainframes, with centrally administered software and hardware. It didn't happen this way. So basically the whole paradigm you describe is imo unrealistic for BUSINESS use. It will happen only for those few percent (5-15%?) who don't value their privacy at all or are willing to give it up to save a few $$$. And have access to fast networking etc etc Google is a fine company, their search engine franchise is currently better than Y! and much better than MSCrap. And the pie will grow, only with much lower rates than the last 5 yr, due to "law of large numbers". In that aspect, current capitalisation is just too high.