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How long will Google's magic last?

“GOOGLE is not a conventional company. We do not intend to become one,” wrote Larry Page and
Sergey Brin, the search firm’s founders, in a letter to investors ahead of its stockmarket flotation in
2004. Since then, Google has burnished its reputation as one of the quirkiest companies on the
planet. This year alone it has raised eyebrows by taking a stake in a wind-energy project off the east
coast of America and by testing self-driving cars, which have already covered over 140,000 miles
(225,000km) on the country’s roads. Google has been able to afford such flights of fancy thanks to
its amazingly successful online-search business. This has produced handsome returns for the firm’s
investors, who have seen the company transform itself in the space of a mere 12 years from a tiny
start-up into a behemoth with a $180 billion market capitalisation that sprawls across a vast
headquarters in Silicon Valley known as the Googleplex. Google also stretches across the web like
a giant spider, with a leg in everything from online search and e-mail to social networking and web-
based software applications, or apps.

Much of its growth has been organic, but Google has also splashed out on some sizeable
acquisitions. In 2006 it paid $1.7 billion for YouTube, a website that lets people post videos of their
children, kittens and Lady Gaga impersonations. The following year it snapped up DoubleClick, an
online-advertising network, for $3.1 billion. More deals are likely. Google is bidding for Groupon, a
trendy e-commerce business, using some of the $33 billion sitting in its coffers.

Related Topics:

* Technology
* Search Engines
* Science and technology
* Internet
* United States

All this has turned Google into a force to be reckoned with. But now the champion of the
unorthodox is faced with two conventional business challenges. The first involves placating
regulators, who fret that it may be abusing its considerable power. On November 30th the European
Union announced a formal investigation into claims that Google has been manipulating search
results to give an unfair advantage to its own services—a charge the firm vigorously denies. In
America, Google faces a similar investigation in Texas and is also battling with a bunch of online-
travel companies who have been lobbying the government to veto its recent purchase of ITA
Software, a company that provides data about flights.

The other challenge facing Google is how to find new sources of growth. In spite of all the
experiments it has launched, the firm is still heavily dependent on search-related advertising. Last
year this accounted for almost all of its $24 billion of revenue and $6.5 billion of profit.
Acquisitions such as YouTube have deepened rather than reduced the firm’s dependence on
advertising. Steve Ballmer, the boss of Google’s arch-rival Microsoft, has derided the search
company for being “a one-trick pony”.

Ironically, investors’ biggest worry is that Google will end up like Microsoft, which has failed to
find big new sources of revenue and profit to replace those from its two ageing ponies, the
Windows operating system and the Office suite of business software. That explains why Google’s
share price has stagnated. “The market seems to believe this could be like Microsoft version two,”
says Mark Mahaney, an analyst at Citigroup. News of the formal EU antitrust enquiry will no doubt
invite further comparisons with Mr Ballmer’s firm, which fought a long and bruising battle with
European regulators.
Is such a comparison fair? Those who think it is point to several changes that could damage Google.
The first is the rise of new ways in which people can find information online. They include social
networks such as Facebook, which saw traffic to its site in America surpass that to Google’s sites
earlier this year , and apps offered by Apple and other firms that help people find information
without using a web browser.

Contact A-1 Technology for Facebook Apps Development.

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How long will google's magic last

  • 1. How long will Google's magic last? “GOOGLE is not a conventional company. We do not intend to become one,” wrote Larry Page and Sergey Brin, the search firm’s founders, in a letter to investors ahead of its stockmarket flotation in 2004. Since then, Google has burnished its reputation as one of the quirkiest companies on the planet. This year alone it has raised eyebrows by taking a stake in a wind-energy project off the east coast of America and by testing self-driving cars, which have already covered over 140,000 miles (225,000km) on the country’s roads. Google has been able to afford such flights of fancy thanks to its amazingly successful online-search business. This has produced handsome returns for the firm’s investors, who have seen the company transform itself in the space of a mere 12 years from a tiny start-up into a behemoth with a $180 billion market capitalisation that sprawls across a vast headquarters in Silicon Valley known as the Googleplex. Google also stretches across the web like a giant spider, with a leg in everything from online search and e-mail to social networking and web- based software applications, or apps. Much of its growth has been organic, but Google has also splashed out on some sizeable acquisitions. In 2006 it paid $1.7 billion for YouTube, a website that lets people post videos of their children, kittens and Lady Gaga impersonations. The following year it snapped up DoubleClick, an online-advertising network, for $3.1 billion. More deals are likely. Google is bidding for Groupon, a trendy e-commerce business, using some of the $33 billion sitting in its coffers. Related Topics: * Technology * Search Engines * Science and technology * Internet * United States All this has turned Google into a force to be reckoned with. But now the champion of the unorthodox is faced with two conventional business challenges. The first involves placating regulators, who fret that it may be abusing its considerable power. On November 30th the European Union announced a formal investigation into claims that Google has been manipulating search results to give an unfair advantage to its own services—a charge the firm vigorously denies. In America, Google faces a similar investigation in Texas and is also battling with a bunch of online- travel companies who have been lobbying the government to veto its recent purchase of ITA Software, a company that provides data about flights. The other challenge facing Google is how to find new sources of growth. In spite of all the experiments it has launched, the firm is still heavily dependent on search-related advertising. Last year this accounted for almost all of its $24 billion of revenue and $6.5 billion of profit. Acquisitions such as YouTube have deepened rather than reduced the firm’s dependence on advertising. Steve Ballmer, the boss of Google’s arch-rival Microsoft, has derided the search company for being “a one-trick pony”. Ironically, investors’ biggest worry is that Google will end up like Microsoft, which has failed to find big new sources of revenue and profit to replace those from its two ageing ponies, the Windows operating system and the Office suite of business software. That explains why Google’s share price has stagnated. “The market seems to believe this could be like Microsoft version two,” says Mark Mahaney, an analyst at Citigroup. News of the formal EU antitrust enquiry will no doubt invite further comparisons with Mr Ballmer’s firm, which fought a long and bruising battle with European regulators.
  • 2. Is such a comparison fair? Those who think it is point to several changes that could damage Google. The first is the rise of new ways in which people can find information online. They include social networks such as Facebook, which saw traffic to its site in America surpass that to Google’s sites earlier this year , and apps offered by Apple and other firms that help people find information without using a web browser. Contact A-1 Technology for Facebook Apps Development.