A (quick) dissection of bigG
Given all news we hear, you might think Google does and IS many things, but this is not the bare truth. Google's cash cow is essentially its search engine and, more specifically, its "AdWords" advertising division. That's where Google gets most of its money, the same way Microsoft has its cash cows in Windows and Office. But unlike Microsoft, Google has no ways to channel itself and its products to users in a direct way. It's all about typing that "www." magical sequence in your browser: when you don't, you're out of Google's reach. That's important, even in browser wars.
Someone might say that I'm crazy: Google does a LOT of things as we hear in the news everyday. But that's not completely true. Google is ACTUALLY investing into many things, but as any of us can see, its revenues from all these investments are limited. True, bigG has a lot of things in place (GMail, Google Maps, Google Docs - or whatever it's named, YouTube, Analytics... you name it!), invests in green energy, builds fiber and wi-fi networks, etc. True. But let's tell ourselves the bare truth: none of those really brings much revenue to Google. In fact, most of those services (including, according to what I know, the wi-fi networks they built or they're building) aren't meant for users to pay to use them. A few of them (GMail, YouTube) can be linked to their advertising division but to be honest it's only GMail itself that Google could actually think to sell users. It might get some cash from Government projects (for example, building networks or renting them) but that's only a tiny part of their revenues.
If you think I'm just misinformed, let's look at Google 2008 Q1 financial summary they publish at this address:
- total revenues for 2008 Q1 were $5.19 billions.
- Google-owned websites represent 66% of such revenues;
- Google network (AdSense) represents 33% of total revenues;
Many people are talking about using YouTube to channel advertising (and I mean, inside videos, not textual one) but honestly this is mostly buzz. Years after its acquisition, Google is still not able to channel advertising inside videos and I doubt it will ever be able. Sometimes some friend (of Google, not mine, of course) journalist writes an article hinting that Google could use YouTube to sell advertising but there's no clear sign of it and for a reason: YouTube is not streaming something you would absolutely want to see but just something that you MIGHT want to see. That is, it's not streaming EXCLUSIVE contents, something you can see on YT only, so it's very unlikely that you could swallow advertising in order to see contents. If there was advertising, those little kids would bring their cellphone movies somewhere else, where they could just show them to their friends without the need to learn why you would need to buy a new Ford.
Other key service for Google is Maps. As you might know, Maps is free unless you perform an insane number of requests per month. Free like in beer. Sure, that's a GREAT service (and I mean GREAT, though Microsoft's LiveMaps is very good too) but do you think Google could sell it? If, all of sudden, Google started to ask money to put those maps on your website, in most cases users would simply remove them. The great bulk of Maps-enabled websites are just pages showing where webmaster is now, though there are a few of very hi-end websites using Maps.
And what about green energy or renewable resources? Sun or wind? What about fiber or wi-fi networks? What about it's massive scanning of ancient books to build a digital bibliotheque? What about subway paper advertising projects? Sometimes you hear something about Google and then... puff... nothing happens for months or years.
I will tell you a secret: reason why Google is not charging for all those services and it's investing into basically anything is bigG knows a way to make money out of them without the need for you to pay. That secret is called "stock price".
Enter the world of "stock price"
I'll keep this short: do you feel sometimes confused about what you hear about Google? Me too. And everyone is. Sometimes Google is set to go to space, sometimes it's going down into deep oceans, sometimes has satellites, sometimes is building something, sometimes is bulldozing something to build something else, sometimes it's scanning all books on Earth, sometimes they just say they're making a lot of money.
It's a mess. And that's how it's meant to be.
For all public companies there's a value which is more "valuable" than all others: stock price. As long the price of your stocks is going up, everything is fine. You might invest billions into making a better ice to sell penguins, that's not important as long as that number is going up. And that number is going up only when people think you're about to do something which could be really "Wow!" and they want be part of it to make money out of it as you will probably do. So people will buy your stocks, stock price will go up and actual value of your company will be bigger. That means that your company will have more money to do what it wants and you will be, essentially, richer.
By announcing something you will eventually do, people will see that on you're on the move and will be eager to buy your stocks not to miss a chance to make some money. And, as the old saying goes, the less analysts understand about what you're doing, the more they will recommend their customers to buy your stocks. It's the Enron way.
Be aware I'm not stating that Google is going bankrupt. Refrain from accusing me of that nonsense. But the scheme is the same for all public companies, everywhere in the World.
In a summary, I'm stating that the core business of Google is their advertising division. The bulk of its other activities is to keep stock price up and running and a very few of them are real investments which bigG thinks it could get real money from. And, while this is not public, of course Google has a financial division whose task is to invest money into financial instruments to get revenues from. Remember about this as it will be important later.
The only thing Google is not talking about is its search engines and how they can make MORE money out of it. I wonder...
The "website-as-application" paradigm
I was a bit surprised when the comics used to launch Chrome used the "website-as-application" paradigm to justify Chrome itself. I was surprised because that's the heart of my article too and I found that funny.
As a summary, Google stated that websites are often not a collection of pages, but most likely they represent an application. I agree. Today a smaller part of websites are simply collections of HTML markup. Most of them, at least most of those developed after 2000, can be better considered applications as they usually perform complex operations that pure HTML pages wouldn't be able to do, most of them are connected to databases and/or other external services. So I agree about this, I agree 100%.
To understand my point of view, you have to remember what Google really is: a collection of services for business and individuals, all of them served via its magical "www.". When you don't visit Google, bigG is dead like a dodo. It's simply not part of your disconnected life, unlike many of its competitors. When you're on, Google is there and shines. When you're off...
This is the heart of Google's bet, whose status we will examine later.
As it's obvious, we have better and modern platforms which have been designed and developed with modern RIAs on mind. We basically have three of them now: Flash (the most popular), Silverlight and Java. It's easy to understand that Google could develop its own technology for that but they didn't.
It's just that: they want to defend JS. But why is that?