Analyst To Start-Ups: Good Luck Taking On Google
Analysts, pundits and bloggers like to debate how long Google (NSDQ: GOOG) can maintain its position atop the online advertising and search world. Skeptics point to the fact that its exposure to advertising (it represents 99 percent of the company’s revenue) puts it at risk if a nimble start-up were to introduce a search product that takes over the internet (much like Google did almost a decade ago). But Piper Jaffray analyst Gene Munster, following Google’s annual Searchology event, said he was confident Google would fend off competing start-ups and remain on top for the foreseeable future, calling its position as leader in search “insurmountable.” Here is his reasoning:
– Google makes so much money, it can dwarf any start-up’s budget It has spent as much as $840 million in single quarter on various projects, according to Munster.
– The brand commands loyalty; Business Week recently named it a top-10 brand, so a quick migration of users from its service is unlikely, giving it plenty of time to react to competitors.
– Google’s technology has gone through years of tweaking, which makes it difficult to compete with.
Munster says its entirely possible that a start-up may come along with a search product that improves Google’s current offerings. His point is that Google has the resources to quickly react and squash any start-up that does.
"Piper Jaffray analyst Gene Munster, following Googleâs annual Searchology event, said he was confident Google would fend off competing start-ups and remain on top for the foreseeable future, calling its position as leader in search âinsurmountable.â
Quoted for truth, great article.
Interesting how history repeats itself, read these bullets, except replace "Google" with "Microsoft". Now jump in the time machine to 1999/2000
What goes up, must come down, though the real question is how long can they remain on top given their unique position as both Cloud OS and advertising market-maker.
Oh yes, I guess they still do search.
(p.s. nothing here should be read to say I don't like them – just that like all behemoth's they are vulnerable)
Google will fail in a very next future (5 years or something), Not because Google wonât have anymore a good product, a good search engine nor good engineers, But because Google has consistently failed during these last years to build a community around its brand.
If Google is such an exemplar company, why so many people, entrepreneurs and investors are so afraid of Google.
Even Warren Buffet, who admire the company, compared Google to âsharks and crocodilesâ company âthat no one can get nearâ. No one is getting near Google, but itâs Google which is going after everyone and is spreading fear all around.
To the question âwho is afraid of Google?â, Kevin Kelleher of wired.com replied âEveryoneâ.
REad a GReat article on the subject here: http://bit.ly/ngLqn
The very notion that "Google's lead is insurmountable" is the fire that stokes entrepreneurs all over the world to compete, and eventually succeed in dislodging Google's stranglehold on search. The formula to displace them exists now but the financial courage to fuel and execute does not.