All good things come to an end, as my mother used to say. The question now is whether this applies to Google, the search engine to end all search engines.
How come? Well, Google is a private company, based in Silicon Valley. It was founded by two Stanford students, Sergey Brin and Larry Page, who invented a clever set of algorithms for ranking web pages. It was a classic case of disruptive innovation -- a smart idea, embodied in computer code, which comes from nowhere and conquers the world.
For most of us, internet chronology divides into two periods, BG (before Google) and AG. Nobody who used Google ever went back to anything else. At a click, all the other search engines were dumped on the rubbish heap of history.
Unlike most Internet start-ups, Google made money virtually from the outset. One revenue source is licensing its search technology to other Internet portals such as Yahoo and AOL. About 75 per cent of all referrals to Web sites now originate from Google's algorithms. A second revenue source is discreet, paid-for advertising on the right-hand side of the Google search page. And finally, the company makes money from "contextual advertising." This is where Web publishers allow Google to trawl through their pages and place relevant text advertisements in the right margin. Once visitors click on the links, the webmasters share the revenue with Google. All told, Google brings in something like US$200 million a year, which you'd think would be enough to keep anyone happy. Not so.
Among the early -- and most influential -- investors in Google were two of Silicon Valley's leading venture capitalists, John Doerr of Kleiner Perkins Caufield & Byers and Michael Moritz of Sequoia Capital. These gents are interested primarily in capital growth, and they have come to the conclusion that payback time on their Google investment is nigh.
Consequently, Google is moving inexorably towards flotation. Investment bankers -- including, no doubt, some of the geniuses who brought us the last internet bubble -- have been whispering figures like US$15 billion as a possible valuation for the company. Google is, after all, overwhelmingly the market leader and a truly dominant global brand, like Amazon, Ebay and, er, Microsoft.
Which is what ought to set alarm bells ringing. For there was a time when a company called Netscape was overwhelmingly the market leader in the web browser business -- and we know what happened to Netscape. And it emerged last week that Microsoft approached Google a few months ago to inquire whether it would like to be bought by the Gates empire. We are told that Google declined. But Microsoft has been working on search technology -- which it naturally plans to build into Windows in due course. Just as it once began work on a browser which was eventually folded into Windows.
History repeats itself, said Marx: the first time as tragedy, the second as farce. Netscape went public without a strategy for dealing with Microsoft's ruthlessness. The original investors made fortunes, but the company perished, and the world is a less diverse -- and therefore poorer -- place.
As Doerr and Moritz prepare to cash in their Google chips, I wonder if they have a game plan for their amazing company beyond the IPO. If they have, then they will sell its shares on Ebay rather than via Wall Street. Google should belong to the world and not to the banks and pension funds who will cave in to Microsoft.