Tuesday, May 15, 2007

what if google became EVIL?

many of you know Google's unofficial motto is "Don't be Evil". So far so good. They haven't done anything evil. They give you lots of goodies either free or as loss leaders. which brings me to my point. Their business model relies on internet advertising and marketing. This has been an unproven and not too profitable market sector. The correlation between clicks and cash is pretty low and thus correlation between userbase and revenues is also pretty weak. they've added all these services like maps, checkout, spreadsheets etc. problem is that while these are great for us users, for Google they're all free or loss making.
so they'll have to either use their advertising income to substitute them (reducing their not so spectacular profitability) or eventually turn them into profitable businesses. Do you really think google office can take on Microsoft without subsidisation? What happens in a few years time when shareholders want a better return and decide a PE of 40+ is unrealistic?
Google's core strength is its searching capabilities. given it is currently storing and OWNS zillions of Terrabytes of your personal information and data stored in gmail, Writely, Google Spreadsheets etc... will the temptation be to onsell this info to third parties for data mining? those third parties will be able to intrude into your personal life on a scale never seen before.
Even more frightening a scenario is what if google sells access to your data to Big Brother? Can you imagine life under Googlevore!
its all good now, but remember things can change in a hurry. Google's now a public company and as such subject the the same performance criteria and pressures as everyone else. If the shares don't perform, the board and management can be tossed out pretty quickly. don't think for a second that a privacy statement protects your private personal information either. That's simple to get around with creative company structuring. There are no guarantees that google won't turn. They've already started lobbying US presidential candidates. Is this the beginning?

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