Google: Searching for Trouble

ABSTRACT: ANNALS OF COMMUNICATIONS about Google’s growing pains. Writer tells about Mel Karmazin, the then C.O.O. of Viacom, visiting Google in 2003, looking for a potential partner in the tech world. Karmazin was interested in Google’s advertising business, but found Google’s system to be too mechanized compared to the advertising model used at that time in mainstream media. Google search now takes in about four of every ten online advertising dollars, and last year, Google’s revenues exceeded twenty-two billion dollars, more than two-thirds of the thirty billion in total U.S. newspaper advertising projected for this year. Google has reinforced the notion that traditional media now want to combat: that digital information and content should be free and that advertising alone should subsidize it. To many, Google appears impregnable. But the same has been thought of the Big Three auto companies, I.B.M., and Microsoft. Describes the array of new products Google has introduced in the last few years, including Google Maps, Gmail, Google Books, and Google TV, Audio, and Print Ads. In 2006, Google announced its acquisition of YouTube, and the following year DoubleClick. In its pursuit of expansion, Google has had to set aside old alliances. Now Google plans to compete with Amazon to sell electronic books. Both companies have ventured into cloud computing, which allows a user to access data stored in a remote server from anywhere. Tells about Google’s purchase of Android, a mobile software company, and its intentions to claim a bigger slice of the mobile-phone business. This direct competition with Apple risked causing turmoil at the most senior levels of Google since several of Apple’s directors, including Al Gore, also sit on Google’s board. Mentions the pending federal court decision on the proposed Google Books settlement. Discusses Google’s unusual management structure, with power concentrated in the hands of Sergey Brin, Larry Page, and Eric Schmidt. Considers the risk of such a large company losing focus because of rapid expansion. Mentions the departure of Sheryl Sandberg to Facebook and Google’s failed attempt to acquire Twitter in the spring. Discusses concerns about Google’s data collection process. Google was not immune to the economic downturn. The company hired only ninety-nine new employees in the fourth quarter of 2008, fewer than it added in a week at the start of the year. The company has also laid off some of its contract workers and employees. Whatever obstacles arise, there’s little doubt that Google will remain a dominant force.