Google's Continued Growing Pains

eldavojohn writes "The Mercury News is reporting that Google's 500 percent growth since its IPO hasn't come without a cost. With the purchase of DoubleClick, Google is facing antitrust charges in both the United States and the European Union. And with their rising success, there are open source alternatives springing up."

How long can it last?

[zmollusc (763634)]

Man, i dread the day that they isolate the maybe 10,000 people on the planet who actually respond positively to advertising. What will we do with all the trees and bandwidth then? :-(

Re:How long can it last?

[by Anonymous Coward]

Man, i dread the day that they isolate the maybe 10,000 people on the planet who actually respond positively to advertising.

Yeah, I'm sure that the reason companies have been pouring billions and billions of dollars into advertising for decades isn't that it works, but that nobody even though to check.

Re:How long can it last?

[Rob Simpson (533360)]

Man, i dread the day that they isolate the maybe 10,000 people on the planet who actually respond positively to advertising.

Yeah, I'm sure that the reason companies have been pouring billions and billions of dollars into advertising for decades isn't that it works, but that nobody even though to check.

The thing that marketers are best at selling is...advertising. People say that, for example, suckers must be buying stuff from the spam emails they receive, or there wouldn't be spam - but that isn't necessarily true. Spammers only need to convince companies to pay them.

Personally, I'd be happy to just pay a couple bucks per show, or a penny per search, or whatever. I'd have cancelled my cable TV long ago if it weren't for my PVR.

Re:How long can it last?

[kestasjk (933987)]

If you don't think advertising works you must not have an adsense account that earns money. Advertisers pay on a per click or per view basis and can calculate their profit based on advertisement clicks.

I'm sure you're not saying that the reason billions are spent on advertising is that advertisement media producers are just really good salespeople, but that's how it sounds.

Re:

[Silver Sloth (770927)]

I heard somewhere that the expectation is somewhere around four replies per million e-mails (I can't guarantee the figure but it's in the right order of magnitude). For normal advertising this would be hopelessly inefficient but with automated spam you can make money even with such a low return.

Re:How long can it last?

[dk.r*nger (460754)]

The thing that marketers are best at selling is...advertising.

This is probably true for small advertising budgets - everywhere, all the time, good salesmen are selling bad businessmen stuff they don't need.

But for just medium-sized ad budgets and up, there is some serious metering going on (as with any other non-trivial investment). And as someone occasionally working in the metering end of a pretty big advertising budget, I can guarantee you that either (a) all 10.000 persons that respond positively to advertising are currently customers of the company I work for, or (b) advertising works.

Personally, I'd be happy to just pay a couple bucks per show, or a penny per search, or whatever. I'd have cancelled my cable TV long ago if it weren't for my PVR.

You can't (unfortunately) expect big companies to respond so quickly to so radical markettrends. But look at iTunes. No-one believed that digital-only distrubution of music over the internet would ever work just a few years ago, and now we've even got non-DRM files. A similar model will emerge for TV shows any time now.
Oh, and I'm more than happy to look at google's sponsored links. Even if there was a paid model (which there is, look at the APIs), I wouldn't take it. I often search for products and services, and I often find what I'm looking for in the sponsored links section.

I used to share your misconception ...

[AHumbleOpinion (546848)]

I'm sure that the reason companies have been pouring billions and billions of dollars into advertising for decades isn't that it works, but that nobody even though to check.

I used to share your misconception. My undergraduate was Computer Science, however now I have had some graduate level marketing classes and I was surprised to find out how quantitative professional marketing is. There is massive experimentation to determine what works and what does not.

Re:I used to share your misconception ...

[jollyreaper (513215)]

I used to share your misconception. My undergraduate was Computer Science, however now I have had some graduate level marketing classes and I was surprised to find out how quantitative professional marketing is. There is massive experimentation to determine what works and what does not.

Really? Wow. My undergrad marketing class confirmed everything I'd suspected. We had several case studies to present as group projects. One in particular was presenting a new frozen food product in supermarkets. I asked him how we were supposed to go about surveying the market to figure out if there was even a demand for what we were selling before we pitched the board, i.e. him and the other groups. "Just make up the figures," he said. "The important thing here is the exercise in making the presentation." Doing my damnedest to keep my smart mouth shut, I went along with it. But seriously, what the fucking fuck? Sure, we did a bang-up job of selling the idea to the class, we got an A on the project, but the facts we presented were all bullshit. I had no more idea of whether or not the product would succeed than before I started the project.

I'd hoped that this was just a poor class and that marketing professionals would actually know what the hell they're doing. Sadly, it hasn't been the case. I worked my way through college and I've seen advertising and marketing done by mail-order catalog companies, dot.coms, homebuilders, etc. I could gather all those marketing people together in one room and you wouldn't find a single clue in the entire lot. When I was still in school, I was working in one marketing department as a jr. report cruncher. Now the way I learn things, I cannot go by rote. I need to know why we're doing things, how the process works. If I just get a series of steps handed to me like a magical incantation, devoid of rational explanation, I'll never remember it. So I ask tons of questions, ask the why's, and end up pissing people off because they think I'm using socratic questioning to point out how big of dumbasses they are. That isn't even the case! I'm just sitting there wondering why nothing makes sense. By the time I realize it's because nobody knows what the hell they're doing and I should just shut up, they're already put me on their shitlist.

What the other poster said about marketing types being good at selling their ideas, that's exactly right. The marketers I've worked with have all been con men, good at backslapping and getting an idea sold but unqualified to even understand if the idea is a good one.

I'm sure there are marketing professionals out there, somewhere, who are actual professionals. But in my experience, sales and marketing is where football jocks go when they get fat.

Re:I used to share your misconception ...

[TheRaven64 (641858)]

Usually big companies do this by using slightly different combinations of advertising material in different geographical regions and then comparing the changes in purchasing patterns with the regions before and after the advertising campaigns. If one does well, then it is promoted to national and international levels (international is harder, since different cultures respond to different forms of advertising). A company like Coca-Cola has sales figures for individual stores and vending machines, and so can accurately correlate seemingly trivial things, like proximity of vending machines to billboards. With online advertising, people like Amazon are fairly good at tracking the people who click on a link, then return later and make a purchase.

Re:How long can it last?

[cp.tar (871488)]

Actually, marketing such as you see on TV only works insofar that you and/or your product get the air time instead of someone else.

Advertising is like an arms race; everyone is doing it (and spending way too much on it) just because everyone else is.

People in general respond negatively to advertising. However, it is generally true that a bad reaction is better than no reaction at all; even if they're annoyed by a commercial, people are still more likely to buy a product they'd heard about (or of) in a commercial than a product they'd never even heard of before.

Furthermore, since everyone is doing it, people are annoyed more or les equally by all companies, so the negative effect (annoyance) is diminished/shared, while the positive effect (people hearing about your product) is retained.

Basically, if everyone stopped playing the advertising game... nah, sorry, it would start all over again. Same dealers, new suck^Wplayers.

Re:

[Propaganda13 (312548)]

People actually don't respond negatively to advertising. They respond negatively to intrusive advertising. When I search with Google, those ads don't bother me and I have clicked on them. Now, if it was an ad that swooped down and covered the search results, I'd be annoyed and use a different search engine.

When I worked retail sales, you could tell what the tv ads were without seeing them because they work. People would come in and say I want to see the product in your ad. Whatever was in the ad, you would

Re:

[gbobeck (926553)]

What will we do with all the trees and bandwidth then?

Well, if we apply a few internet laws, the answer would be... Make more porn!

Re:

[marcello_dl (667940)]

> Omnes castelli vestris pertinent nobis sunt.

there, fixed it for ya.

Wikia is no Google competitor

[tmk (712144)]

The Wikia search project may be a search engine for very special requests in three or five years, but it is not a competition for Google, nor it is intended to be.

BTW: There are plenty of other open source and distributed search engines. For example this one [guardian.co.uk].

So how did this article end up on here, anyway?

[Behrooz (302401)]

I'd say these 'growing pains' appear rather similar to the challenges faced by any corporation of similar size. Potential mergers with companies in the same field being investigated by the FTC? Welcome to the Fortune 100. Open source alternatives as a 'threat' to ubiquitous name recognition and >50% market share? Yep, that's a truly pressing problem most tech companies would love to face. Difficulties sustaining rapid growth when your market cap exceeds $150B?

Well, yes, it's difficult to grow rapidly when you're valued at over 1/400th of the gross world product. Pick a bigger planet next time, perhaps?

Honestly, did this article really say anything insightful or unusual? If it did, I missed it...

Re:So how did this article end up on here, anyway?

[SnowZero (92219)]

Well, yes, it's difficult to grow rapidly when you're valued at over 1/400th of the gross world product. Pick a bigger planet next time, perhaps?

Well, after Google earth [google.com], they did expand to the Moon [google.com].

I wonder if Mars in next... it seems to have a lot of free ad space.

Re:

[cp.tar (871488)]

I wonder if Mars in next... it seems to have a lot of free ad space.

Just you wait. I bet the Coca-Cola Company is already making arrangements to paint their logo all over Mars surface.

Unlike the Moon, no need for Russians to paint it red beforehand, either.

*shudder*

Re:

[shawn(at)fsu (447153)]

Coke Adds Life!

Re:

[mybadluck22 (750599)]

http://www.google.com/mars/ [google.com]

Re:

[SnowZero (92219)]

When you're looking for off-Earth market share, you take what you can get, even if it isn't quite what you were hoping for.

Just don't bring up the planetary status of Pluto, unless you want to start another flame war.

Big is evil?

[Epsillon (608775)]

No, SM, not big, just cookies that don't expire until 2038 and profiling users might be just a little naughty. An anonymising proxy [mozdev.org] based search plugin may well be the answer for Firefox users. Those without Firefox can still make use [blackboxsearch.com] of Blackboxsearch - at least until something a little more ethical (than BlackBox or Google) appears.

FWIW, BlackBox is also slightly naughty. It's using Google's search technology without giving anything back. The disparity between getting a few links and giving up your right not to be profiled makes it the lesser of two evils, though.

Re:

[Phil246 (803464)]

The google cookies expire much much sooner then 2038, they will expire after 2 years now for those who do not visit the page again for it to be renewed.
See this [blogspot.com] for the announcement

Re:

[Epsillon (608775)]

Thanks for the correction, Phil, although I notice that they do say "in the coming months" and, since the blog post was made in July, there's no indication of when the policy kicks in. They also fail to mention what happens to users who already have the long expiry cookie on their system.

Don't get me wrong, Google is the best engine out there, period. Tinfoil aside, I simply think that people may have misconstrued the motto; "Do no evil" and the unwritten subtext "because we are watching you" extrapolated

OpenAds is no Google competitor

[LingNoi (1066278)]

It is like comparing apples and oranges.

OpenAds is just for local site advertising. With OpenAds I have to set it up, configure it, paste the HTML into my web pages and then look for people that want to advertise on my website. With Google you just signup for an account and paste in the HTML.

Re:

[niceone (992278)]

From TFA it appears that OpenAds competes with DoubleClick's adserver software (which Google charges for).

I work at a startup

[MillionthMonkey (240664)]

We would be inclined to view antitrust charges as a "nice to have" type of problem.

misleading "OpenSource" use?

[El_Muerte_TDS (592157)]

OpenAds (formerly known as phpAdsNew) may be open source software, but it mostly relies on 3rd party ad sellers. It will allow you to sell ads on your own site, but as long as no advertisers are buying your ad space you have to rely on things like AdSense.
Also, open source software for rotating banners with click/impression counting has been around for ages, it's not new. phpAds was created in 1999.

Open source search engines. Well, the source might be open (just like htdig has been open source for ages). But it's not like any end user of search engines is going to run their own search engine, it's simply impossible for consumers to run their own search engine. Website operators may run their own search engine, but usually limited to their own site.

So the whole reference to open source "competitors" to google products is complete bullshit.

Re:misleading "OpenSource" use?

[vidarh (309115)]

The point is that if the source to a competitive search engine was freely available, the cost of actually competing with Google is pretty low. Google has tremendous hardware costs, but mostly due to scale. The minimum cost to start indexing the web is pretty modest - you can crawl at least tens of millions of pages a day on a single Xeon box (been there, done that), and you can create a search index from tens to hundreds of millions of documents in a day on a single box depending on how good your indexer is (again, been there, done that) and how much metadata etc. you want to index. As such, you could get going with a dozen EC2 licenses or a few thousand a month in hosting fees.

The sticking point is search quality. That's a hard problem. And that is what is limiting most of the companies trying to compete with Google: Finding ways of getting results that are as good as or better than Google's without having Google's resources available.

The crawling, the indexing and returning basic results is easy. Back in '97 I shortly did a Linux specific search engine. It took only about a week to write the basic elements, and I indexed about a million pages to test it. Today it would've taken more care, as the number of documents you'd need even for a narrow niche vertical search engine is far higher, but there are also more off the shelf full text engines available that can easily handle at least up to the tens of millions, some into the hundreds or more (though _all_ of them are slow) if you don't want to do the work yourself. But that part is not hard work.

Most of the rest of what Google does well is scale the system, and that contributes to their margins, but it's something any competitor would have a lot of time to figure out too. Besides, over the next few years we're going to see a huge number of ex-Google employees who have learned a lot about scaling from Google's system, and who are back in the job market for various reasons, or looking to start their own companies.

Re:

[tknd (979052)]

You're forgetting that Google has one large disadvantage. Being the top search engine means the best traffic. So all of the "SEO" people and aspiring blogs/estores/media attempt to push their pages to the top of the list. As such Google's search quality has degraded significantly.

Their algorithm is also showing significant weaknesses. If you Google a term like a historical figure or a popular person's name, a wikipedia result is always near the top. This isn't necessarily bad as a good portion of the ti

open-source alternatives?

[Swampash (1131503)]

Google is an advertising company. It sells eyeballs, which it has a lot of in virtue of having a good search algorithm. How is there an open-source alternative?

Re:open-source alternatives?

[The-Bus (138060)]

You know, back in the dot-com days, I was in the business of selling eyeballs. To my surprise and the horror of most companies, "eyeballs" apparently was not meant in the literal sense. I don't know what the police did with my jar, but I never did hear from any of the hobos whose eyes I scooped out.

I hope they're ok. :(

Competitors

[Arabani (1127547)]

Apparently Yahoo! is catching up [slashdot.org] to Google, at least in terms of customer satisfaction, so I really don't think Google's dominance in search is that big of a deal. In advertising, maybe, but that's why the FTC and EU are looking into possible antitrust violations ... nothing particularly special there. Now, if they actually stopped the merger because of antitrust violations, THEN that's news. Until then, it's just hypothetical bullshit and dreams. The article does manage to make on good point, though, which is that sooner or later the market would manage to break Google's (hypothetical) monopoly. Heck, there's already countless startups all hoping to displace Google. Google does not come close to enjoying the dominance that Microsoft once did, which is why all this concern about Google shutting out the competition seems premature, at best.

Deja vu?

[SamP2 (1097897)]

When Microsoft was originally established, in the era of IBM dominance over PC OS and software, their mission statement was to be everything IBM wasn't at the time... To cut the red tape, to avoid bureaucracy, to put human relations above legal stuff, to be the "people's company" that fights the IBM tyranny. And back then, in the late seventies and early eighties, it was. If you find it hard to imagine, just google the "Would you have invested?" poster.

Fast forward 20 years, and what do you see? Microsoft now is the Big Bad Suing-R-Us company, holding almost total dominance over the PC OS and other markets. It is the new Goliath. And then, comes the new David, Google, with the mission statement of "do no evil", in other words, "do no Microsoft", once again being the "people's company" that fights the MS tyranny.

Fast forward another X years... You get the idea.

The cycle never ends, and indeed it is pretty much natural. Once a company grows from a small enthusiastic community (which Google once was, which Microsoft even earlier once was, etc) to a big faceless corporate conglomerate, there will come a new player, making up with agility what he lacks with force. And the new David vs. Goliath battle ensues, until David grows up to be so big and fat you can't tell him apart from Goliath anymore, and the next David candidate takes on the role.

Re:

[slobarnuts (666254)]

nce a company grows from a small enthusiastic community (which Google once was, which Microsoft even earlier once was, etc) to a big faceless corporate conglomerate,

Microsoft has a face, if it did not have a face you would not see 10 billion Bill Gates photoshops comparing his likeness to The Borg, Hitler and whatever else kids find evil these days.

My theory is, make sure you CEO stays in a very small windowless room with no direct contact to outside sources, that way, he can never have his likeness

people who call Google evil

[someone1234 (830754)]

What they say about Microsoft?

Google didn't do ANY evil to me, it is a free service for me.
Google won the search engine market by simply serving the best search results.
If i don't like Google, i could try other search engines.
Why do I still use Google? Because it is the best.

M$ on the other hand provides its mediocre software force-fed to me.
I cannot avoid it even when I want to.
Most software types already exist on Linux, but games are still scarce.

Re:people who call Google evil

[Chapter80 (926879)]

Google didn't do ANY evil to me, it is a free service for me.
M$ on the other hand provides its mediocre software force-fed to me.

Devil's Advocate:
Microsoft Windows is free software to me. I buy a PC, and it comes with Windows. Sure, HP or Dell has to pay for it, but I don't.

My sarcastic comment, above, is parallel to your comment about Google Search being free. Someone is paying for Google Search, and the costs are most certainly being passed along to the consumer somewhere along the line. Just because you don't see it itemized doesn't mean that you aren't paying for it.

So why, again, is Google so good, and Microsoft so evil? Because Google plays the shell game better?

Size and Evil. It's all in the attitude.

[deek (22697)]

The new Microsoft, eh? That's an interesting tag for Google. Big is apparently evil? Certainly, the bigger you are, the more careful you have to tread, lest you squash the ants under your feet. It's not necessarily evil if you do squash an ant; it is evil if that was your purpose. Likewise Google and Microsoft. It's not necessarily evil if many people use your software or services; it's evil if you try to destroy your competition. I'd say Google has a long way to go, to be truly compared to Microsoft.

It's funny the timing of this article, because I've just completed my final interviews with Google for a job there. I'm usually a small/mid sized company person, because I hate big company environments. Google is the first large company to convince me that it'd be worth working with them. They really seem to allow employees to spread their wings and do their thing. They don't seem to try to squeeze every drop of productivity from people, and may possibly get things done better because of it. I know I certainly am more creative with my problem solving, if I'm in a relaxed and fun environment. Anyway, if I get this job, it'll be very interesting to see how Google copes with allowing such freedom at work. Maybe they've invented a way to herd cats.

Re:Unregulated capitalism == evil

[dch24 (904899)]

I think this article is misleading. They talk about the antitrust investigation into Google's acquisition of DoubleClick... caused by:

Complaints that "publishers might fear that if they did not deal with Google, their ranking in Google's search engine might be affected"

In other words:
Before Google ever drops my search ranking because I cancelled my DoubleClick subscription, I'm going to spread FUD about this hypothetical possibility, and insist the Government shut them down.

There is also the typically worries about privacy after Google knows not only what you search for, what AdWords you click on, but now what DoubleClick Banners and Pop-Ups you click on too. And they talk about some of Google's competitors, trying to find the next Google killer. They think Wikia and OpenAds will be more open-source (Google's PageRank is a "closely guarded secret") and won't collect any consumer information.

It's all just so ... hypothetical. Wake me up when you have an actual search engine or advertising model. In the meantime, let Google buy DoubleClick. If they fail to deliver on either front, there are plenty of competitors who will willingly accept all their dissatisfied customers.

Re:Unregulated capitalism == evil

[oliverthered (187439)]

That's why I use tor if I'm browsing anything remotely dodgy.

Google's master plan.

[by Anonymous Coward]

"Google's mission is to organize the world's information and make it universally accessible and useful."

Once you have everyone on earth (and beyond) looking at your info, selling ad-space (and data-mining info) allows you to purchase other indexers, data aggregators and information storehouses.

Google is beyond brilliant in cornering the market in data organization.
There is just too much info out there and it's the index that controls exposure.

Re:Google's master plan.

[pipatron (966506)]

Yeah, and apparently it's led by someone that understands that the way to a continued successful growth is to be nice to your employees, to treat your customers with respect, and well, generally Do No Evil. Everyone understands that they want to make money. It's no charity. What makes them different from virtually every other major IT company out there is that people don't hate them, which is why, whenever there's talk about Google, the Do No Evil mantra comes up.

Re:Google's master plan.

[somersault (912633)]

Yep, I don't get the 'googleisthenewmicrosoft' tag in this article. People hate Microsoft because they make shoddy products, and still dominate the market. If they made decent products, people really wouldn't care so much. I wouldn't anyway. A good product deserves to dominate. Poor products dominating purely through marketing and underhanded tactics is what is disgusting, but google's products are actually pretty useful, stable and have decent interfaces.

Re:

[everphilski (877346)]

A good product deserves to dominate.

Or a hundred beta products, apparently.

And if you haven't noticed, recently, Google has pretty much stopped innovating and rather started purchasing innovative companies. One step closer...

Re:Unregulated capitalism == evil

[FleaPlus (6935)]

Google is a decent company, but they do evil simply by virtue of dominating the market and being impossible for a newcomer to compete with.

Is Google actually doing anything to prevent newcomers from entering the market?

Of course they are.

[by Anonymous Coward]

Google DeathSquads(tm) are driving from campus to campus, slaying out of hand any student enrolled in CS, IT or Engineering fields.

And you thought those vans were just taking pictures.

No, Google's not doing crap to stop innovation/competition; there's just the usual, "But, but, it's Google! Waah! I don't want to work my ass off, I don't want to make something better, I just want to call them evil and tell them what to do as a non-shareholder!" crap going on here at Slashdot.

Re:

[cain (14472)]

Google DeathSquads(tm) are driving from campus to campus, slaying out of hand any student enrolled in CS, IT or Engineering fields.

The students still have a fighting chance though as the Google DeathSquads(tm) are still in beta...

Re:

[PietjeJantje (917584)]

FFY, Google prime strategy against competition has been to create as big a barrier of entrance to the market as possible, in other words, the opposite of the behavior you suggest they should show.

Re:

[Freexe (717562)]

I thought that they were hiring anyone good enough to make a good competitive site.

So, compete with them

[Colin Smith (2679)]

Join Majestic 12 [majestic12.co.uk] and contribute to an alternative search engine. You can have your machines index a certain amount per day and contribute the result to the index.

Having alternatives is what keeps companies honest. Government regulation just makes the regulators a target to be corrupted.

 

Re:nothingtoseeheremovealong

[niceone (992278)]

no thing to see he remove a long

A long what????