No wonder people aren’t interested in building companies that generate revenues/profits. Why would you do anything as hard as that when you can do this instead. When will this madness stop? And once it does stop, how long before it starts again?
The Economist, Sept 1st, contrasts Google’s development with other tech companies
Google is often compared to Microsoft; but its evolution is actually closer to the banking industry. Just as financial institutions grew to become repositories of people’s money, and thus guardians of private information about their finances, Google is now turning into a custodian of a far wider and more intimate range of information about individuals.
When a company sells you software for you to install on your PC (e.g. Microsoft office) that transaction is pretty much the end of your relationship. However each time you go onto Google you are sharing your search habits and some level of browsing habits. If you are using gmail you are sharing a hell of a lot more. As you pile all this information up the value to Google of the information increases exponentially.
This is potentially the same with all Softare as a Service offerings. In the procurement world the best parallel would be supplier networks. Today, supplier networks are generally used to facilitate the sending of transactions backwards and forwards – like a form of EDI that happens to use XML and the Internet. A more Google-like approach to supplier networks would capture buyer and supplier interactions in such a way as to then leverage this information to be able to match buyers with suppliers more effectively.
Some more stats on Google’s meteoric rise, again lifted from The Economist:
Less than 10 years old
Market cap $160bn
Expecting Revenue this year of $16bn
Expecting profit this year of $4.3bn
13,786 employees in June 2007