We’ve Been Googled

Sometimes revolutions are loud and recognized, sometimes they just happen, running quietly in the background while everyone worries about other things. In the last 10 years a quiet movement has changed the way the world does business and most of us missed it. The revolution was led by a couple of computer engineers who did what engineers do, they questioned everything. Those of us who are in business today need to be aware of the changes brought about by Larry and Brin, the Google founders, or we are doomed to obsolescence.

I’ve just read Googled, The End of the World as We Know It by Ken Auletta. He’s one of my favorite business authors, and, if you are into modern business history, you won’t want to miss Auletta’s inside account of how a couple of computer engineers have changed the way we get information. In a nutshell, the founders of Google set out to index the internet and to make search not only free to users but commercial free as well. (As opposed to existing search, like Alta Vista, whose results were influenced by advertising.) Along the way, Google has challenged the way ALL information is disseminated in the world, influencing (and even destroying) some of the most established American Industries. It’s a great read for those who are fascinated by business and the way it can be done in our country, it’s a rags to riches story that is both inspiring and frightening.

Ok, even if you aren’t into reading about business, there are some powerful lessons to be learned from Google, powerful lessons if you plan to survive. Google’s every decision comes down to this question: “How do we benefit the end user?”  And, they have created some amazing answers to that question. You probably know about Google Search, we all use it; but do you know about some of their other applications? Yes, Google Maps is something else, so is Google Earth, but I didn’t realize (until this afternoon) about some of the more useful, everyday tools that Googles makes available to us at no charge.

First, I clicked here and  downloaded the beta version of Google Chrome for Mac, an amazing browser, one that gives you the ability to customize your own home page. I’ve built a page that not only features a beautiful background, it is full of “gadgets” that put everything I need during the course of a day at my virtual fingertips. On one page I now have Facebook, Wikipedia, local weather, my local newspaper, financial news, tech news, sports scores, trivia and even jokes. You are bound to find a widget to amuse you and help you be more productive, from jokes to virtual pets to health tips and recipes. Chrome is to the internet what a desktop is to your computer,  a handy place to go anywhere with a click. Google has understood, for a long time, that the future of computing is not software loaded to a hard drive, it is applications accessed through the web.

Ok, now that your computer looks pretty; how about some applications? Google, in their effort to defeat arch rival Microsoft, has created a suite of products to rival Office. Spreadsheets, word processors, presentation documents with no download or boxes of software required, perfect for those low priced internet computers that are coming along. Google, in fact, sees “Cloud Computing” as our future, we’ll be able to pull up our documents from virtually any device that has an internet connection.

The heart of Google, by the way, is advertising, they sell more of it than anyone else. Here’s how they see the future: You do a search on your phone for a nearby men’s clothing store, you’ve spilled something on your shirt. Up pops a list of close by stores with a special coupon from a nearby men’s shop for a discount if used within the next few hours. Advertising will become more targeted as the line between platforms becomes less important. If you are reading your local newspaper’s website and then click on a video highlight of last night’s game, does it matter whether you think of it as watching TV, reading the paper or being on line? Advertising is becoming very precise and very personal. Google will use its technology on all “platforms” and devices, they’ll be everywhere from cable TV to your cell phone.

In addition to search, maps, documents, Google has tons of other products for us. How about placing all of your health records in one place? Or your photographs? How about a page where each of your favorite blog’s new posts show up as they are published ? (A Great place to read the Affluent Artist). Or a place to keep you calendar? Or a place to search for patents? Scholarly papers?  Videos? Fugghedaboutit! Google owns YouTube! Google realizes that we are no longer tied to a desktop with boxed software anymore, we need access to our information from almost everywhere and they are ready to give us that access.

Google is not without enemies and Auletta describes the fears that many have about the growing power and influence of this company, driven by engineers, not marketing types. Google’s motto, inside the company, is “Don’t be evil”, a backhand swipe at Microsoft. But, as the company becomes bigger, as it’s technology infringes on many other businesses, as they gather more information about us and our habits;  there is reason to be concerned about issues of privacy and the “purity” of future management’s intentions. Business decisions are not always easily summarized as “good or evil”. (In fact, TODAY, it leaked that Apple is in talks with Microsoft to replace Google with Bing as the search engine for the I Phone, this should be interesting to watch!)

The Affluent Artist lesson from Google is this: Focus every decision on the customer, the “user” and don’t worry about profits until you have created something people can’t to live without. Servicing our customers is something we can all focus on, whether we work for ourselves or someone else. Google started with a pretty simple premis, let’s help people find stuff on the internet. On the way, they’ve become a ubiquitous part of our lives, and, oh yea, they made a lot of people very wealthy along the way, their shareholders have benefited even more than their founders.

The information contained in this report does not purport to be a complete description of the securities, markets , or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an invetsment decision and does not constitute a recommendation.

Any opinions are those of Rick DiBiasio and not necessarily those of Raymond James (or RJFS). Epressions of opinion are as of this date and subject to change without notice.

This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Past performance may not be indicative of future results.

Raymond James makes a market in Google, Apple and Microsoft. Rick DiBiasio, Raymond James Financial Services Inc, its affiliates, officers, directors or branch offices may in the normal course of doing business have a position in any securities mentioned in this report.