Burden of Truth

Friday, January 09, 2004

GOOGLE ADVERTISING INC

Ethos and attitude are everything. If you wish to generically forecast the strategic actions of major company, scratch the surface and take a look at these values.

Those webmasters who suffered badly last year with the Florida update, and those who will suffer in the near future (I don't believe they have finished yet for one second) would do well to consider this.

The problem is that somewhere along the path, from a handful of techies working at the frontier of search technology, to Google as a multi-national, the culture of the company changed. Perhaps it was inevitable.

Take a look at any big corp. Who are they answerable to? Obviously stockholders and shareholders. What generally drives these people? Well.... profit... the best return possible on their investment. Basic stuff, but I would argue fundamental to what we are seeing at Google.

Clearly on the list of priorities therefore, a large post IPO organization will have return for stockholders pretty much at the top of their list of priorities. And yes, it has to be faced - well above maintaining the quality of the product set, which after all is only part of the means to the actual end.

There's the rub, and in a search environment the relationship between product quality and returns is even inversed in certain scenarios: poor search returns = more advert clicks = higher short term profit. This again is hardly a factor that will help push quality to the top of the company priority list.

I rather suspect we have seen a drift in how Google (at the top) sees itself... from a TECHNOLOGY company to an ADVERTISING company. There's a big difference between the two:

- A technology company behaves how Google behaved 3 years ago.
- An advertising company behaves how Google does now.

Think about it, and then read the tea leaves again.

posted by Art Saturn [1:52 AM]