Some news bubbling out of eWeek, by way of Allan Stern at CenterNetworks, that Google likes to acquire smaller companies at a fairly prodigious rate — about once per week. Eye-popping and somewhat reflux-relieving if you’re a startup, but not at all surprising if you’ve been following Google. In fact, I’m surprised that a recent interview in Wired has fallen so beneath the radar that its ignored commentary, especially since Eric Schmidt pretty much outlines, in broad strokes, Google’s Masterplan to Conquer The World.
If you’re interested to know where all these acquisitions are going towards, understand why its gone so far beyond search, and why its spending huge amounts of capital to build data centers in secret — coupled with large tracts of dark fibre, I suggest you read it.
To summarize, Mr. Schmidt goes on to discuss how:
- Advertising revenue is its primary source of revenue, but they’re looking to expand in a big way
- That “big way” is through Google Apps, which is a suite of potentially enterprise ready online applications
- Google is building a huge number of data centers — much of it unpublicized — to make sure that it has the infrastructure ready and capable and redundant to handle all that online data
- Eric Schmidt believes that the future of all information processing, handling, and manipulation will be done online.
- Google’s acquisition of YouTube, apparently, has nothing to do with becoming a media titan, and everything to do with serving more ads on a different kind of medium
- Google wants to serve as the ultimate swiss-army back-end for any and all kinds of hardware front ends — including, and especially, Apple.
- Google’s aim is to has four faces: A search engine, an online applications service, a supercomputer, and a brand.
While there are interesting tidbits around the Viacom suit and YouTube, the interview is really about the future of software, and how Google is betting that the future will be a software-as-service model.
All debates aside, IF the future of software is all remotely hosted software, and if we’re moving towards a future which is ultimately platform agnostic, then all this business about data centers should scare the Hell out of Microsoft — and in fact, anyone who is still a stakeholder in the dominance of off-line applications.
After all, Google isn’t just putting its resources towards building great online applications that mimic offline ones. Which, let’s face it, is what this business about buying-a-start-up-a-week business is about: acquiring assets, which, will hopefully pay off in terms of software that they can integrate into their current suite of offerings.
No, the scary part is that Google is putting money — Scrooge McDuck amounts of it — into acquiring, building, and *owning* the architecture so that it is physically and literally able to make their SAS dreams a reality. So that they won’t be beholden to any one telecom or other company as to their infrastructure. So that they’ll have the type of granular control that, with its engineering pedigree, quite frankly, makes total sense.
I’ve been a Microsoft Apologist from the beginning. I lept in front of the “Microsoft is Dead” meme early and often. But if the real future of software is online, remotely hosted, and software-as-service, then Microsoft has a lot of catching up to do. Google isn’t just moving ahead one one front — but a whole bunch of different fronts at once, up to and including acquiring physical assets to hedge their bets.
Which explains why Eric Schmidt refuses to answer to Ballmer’s asinine comments about Google being a one-trick pony. I mean, if that’s the best assessment Microsoft has of its competition, its in real deep trouble.


May 13th, 2007 at 7:05 am | Permalink
All I can say is, Google is the future of the web.
May 13th, 2007 at 1:26 pm | Permalink
The voracious appetite of Google is mostly due to its gigantic hoard of cash or “war chest” Money can’t just sit in the bank….analysts and wall street will not stand for that.
What else is a company to do…well they could buy back stock; but when you stock is already at astronomical numbers so that seems foolish.
You could give it back as a dividend…again no…the astronomical price tag of the stock is a direct result of its perceived “growth”.
So what do you do?
well obviously you put riduculous amounts of money into R&D and you continue to feed the blackhole of talent in the technology industry which is Google.
But that is not enough alone…and you still have all this cash. M&A makes sense cause you get I.P., you get talent, and hey you might even get a few more eyeballs to throw your adds at.
The dark fiber is definitely a hedge against the Teleco’s….but I still think that the last low hanging fruit is actual transaction processing at the point of purchase.
Build the customers trust…then hold their hand all the way to the cash register. Finally when you have them there; by handling the transaction (ala Visa, Mastercard) you have the most desirable of all action items…the purchase. Forget about all the pay per click stuff, if they could get a cut of Visa’s action..thats stupid money!
May 16th, 2007 at 8:50 am | Permalink
While I agree that the future of many applications is probably SAS. In order to access the software or the service you have to have an operating system, and it seems like Microsoft’s OS still makes a buck or two. Plus, the I just can’t see the SAS internet model replacing things like Photoshop, office, and the like…-Metagg
May 20th, 2007 at 10:49 pm | Permalink
[...] Google buying start ups every few days … making aggressive deals with content providers … building a dark fibre network punctuated with data centers … [...]
September 21st, 2007 at 11:52 pm | Permalink
[...] plan for Google — the company that most people associate merely with search and ads — to build or acquire physical assets, so that it literally owns the bandwidth to fuel its future plans for world domination. [Do I [...]
October 10th, 2007 at 2:41 pm | Permalink
Great post about Google Goobling Up Startups? Its But A Part of Google’s Masterplan, Folks.!
February 27th, 2008 at 3:58 pm | Permalink
[...] He has a good point though: Google’s spending a fraction of its revenues on the one pony that’s actually making it cash money. Personally, I’m looking at it from a glass half-full point of view. I *like* the idea of Google putting money into unfettered innovation that has a good chance of defining what the “internet” is, via software-as-service while owning the infrastructure behind it (don’t forget, Google has secretly been buying up dark fiber and building huge data centers, also largely in secret…). [...]