GoogleGazer

The Internet has gotten very big, very fast.

I know I am not telling you anything you didn’t know already. But how fast? How big? Forty years ago, in April, 1969, Bolt, Beranek and Newman (BBN), under contract to the United States Department of Defense Advanced Research Projects Agency (ARPA) – (since renamed DARPA) – created ARPANET the forerunner to the Internet.  I first used it as an undergraduate at Brandeis University in 1970 (where it was deployed in the Physics Department, which is where “Computer Science” was ensconced in those days; computer science had not yet become a department in its own right at many universities). ARPANET was a packet-switching network, and email and file transfer capabilities were added over the next four years. The World Wide Web (WWW) was famously created by Sir Tim Berners-Lee in 1989 working at the European Organization for Nuclear Research (CERN) in Geneva, Switzerland and was released to the world in 1992. According to Netcraft, the Internet is now home to about 172 million websites, growing at the rate of 3.9 million sites a month. There are also at least 543 million email acocunts, according to Email Marketing Reports, and far more, according to some other estimates. About 200 billion email messages are sent daily around the globe, about half of them Spam.

Big as the Internet has gotten, nearly all accessto it is from an Internet Browser running on a desktop or a laptop computer, using technology not significantly changed since the initial release of the Mosaic browser (the forerunner of today’s Firefox and Internet Explorer) in 1993 .

Yes, I know, you want to correct me. I am aware that many corporate users, (including the GoogleGazer) use Microsoft Outlook for email on their desktop and not a Browser, and that nine million of the most ardent emailers use handheld Blackberrys, (again, the GoogleGazer included),  but we are a tiny wireless minority swimming (floundering)  in a sea of users tethered to desktops and laptops. Most folks still get their Internet fix only from desktops and from laptops.

Things however, are not expected to stay as they are for very long. And it this expectation for dramatic change that gives agita to the billionaires running the big three, Google, Microsoft, and Yahoo! (in alphabetical order).

Today’s debut of the Apple iPhone 3G. with its fast 3G wireless technology, GPS mapping, support for enterprise features like Microsoft Exchange, and the new App Store, combines three products in one — a cell phone, a widescreen iPod, and a breakthrough Internet device with rich HTML email and a handheld but desktop-class web browser is a harbinger of what’s to come. With prices starting at $199, and with high monthly fees, the iPhone 3G is not for your average teenybopper – yet. But it’s certainly foretells what the capabilities of the “typical” handheld wireless device (formerly known as cell phone) will look like in a couple of years Moreover, as Internet access becomes relatively ubiquitous, applications migrate to the “cloud” and “Software As A Service” becomes the norm, we can (finally) expect to see Internet technology cheaply embedded in any number of industrial, office, and home devices, thus greatly expanding the number of tasks that involve Internet use.

We are rapidly approaching a Malcolm Gladwell “Tipping Point” based on the confluence of several “disruptive technologies” as Clayton M. Christensen termed them, and this reality and the related uncertaintly about the effects of the disruption is what scares the living daylights out of the billionaires who all made their initial billions off of stuff running on desktop computers. Note to Billionaires: if Tums doesn’t do it for you,  Omeprazole (the generic name for Prilosec, a proton pump inhibitor) is now available over the counter, and without a prescription. Thank God for small blessings.

What are these incredibly smart people all so scared of? They recognize that all of the accepted ways of doing things will change, boundaries will disappear or be reset, and the soil is fertile for the next budding entrepreneur, sitting now in someone’s loft or garage to grow exponentially, at the expense of Microsoft, Yahoo and Google, the leaders of the established order.

Why so?

Let’s review our history. Desktop computers took computing out of the hands of the high priests of mainframe technology, and made it available to the unwashed masses, but at great cost to IBM. Amdahl, Culliname and other defenders of the old mainframe order. The Internet also created a whole new pantheon, and in the process creating any number of dot com millionaires. The enormous volume of information created by these dot coms and sitting out on the Internet fostered a real need for search technologies to enable you to find what you need from the nearly infinite information out there (and by the by, all the product data out there also gave an enormous push to e-commerce).

The genius of Google’s founders, Larry Page and Sergey Brin. was that they not only figured out how to do search mindbogglingly fast, but they also figured out how to monetize it with their unobtrusive textual ads appearing alongside the search results. Still, as much as Search has helped the world, and made googling into an accepted verb, it did not significantly threaten either Microsoft or Yahoo. Microsoft still could continue to collect its tolls from every server, desktop or laptop running Windows and Office (nearly all of them) while Yahoo could profitably focus on some very tasty crumbs: webmail, start page, instant messaging, affinity groups, and on being the Avis of the search business. Then came cloud computing, and high-speed, handheld wireless access and the world order is threatened. Cloud-based replacements for Microsoft Office are not only free, they require few resources, encourage collaborative development, and they are getting better, much better, every month. Ominously for Microsoft, cloud computing is entirely built on an underbelly of Open Source technology and cheap hardware, eliminating taxes payable to Microsoft at both ends. Even more disruptive, access from all manner of small, highly portable devices (often using ever-improving voice recognition technology) and other non-traditional access methods opens up many new ways of doing things that really disrupt the established order. So the Billionaires are right to be scared.

Google, being the youngest members of the Gang of Three, is trying to embrace and lead cloud computing, Open Source, advanced speech recognition, video, and all of the paradigm shifts now taking place before our eyes. But still, they too run scared. Their greatest fear is that someone , somewhere, will develop a new “killer” search methodology that we will all migrate too, killing their golden goose of search-driven advertising revenue. A secondary, but no less real fear of Google’s is that having cornered the market in search, what do they do for an encore to continue to deserve to have their shares trade at such lofty multiples of their impressive earnings? Their solution is to give away free all manner of exciting new technologies, to evangelize the new order, so that whatever “sticks” and becomes the next big thing will see Google continuing to be out there leading the way, front and center. At the same time Google is trying hard  to broaden its revenue base to encompass advertising in general, and not just text ads alongside searches, but without killing off those huge profit margins. We shall dig in deeper on this topic in upcoming posts.

Microsoft, with perhaps the most to lose, as its revenue base is almost wholly dependent on collecting tolls for the use of its tools and software on laptops, desktops, and servers, has little to show for the billions it invested trying to gain traction on the web with any number of largely “also ran” initiatives. It seems to hope that by combining forces (somehow) with Yahoo, it can, (somehow), keep treading water while it uses its enormous reserves of cash to buy the “next big thing” once they figure out what it is.

Yahoo reminds me of the famous story told of George Bernard Shaw’s encounter with a famous actress. Shaw told the actress that everyone would agree to do anything for money, if the price were high enough. `Surely not, she said.’ `Oh yes,’ he said. `Well, I wouldn’t,’ she said. `Oh yes you would,’ he retorted. `For instance,’ he said, `would you sleep with me for… for a million pounds?’ `Well,’ she said, `maybe for a million ponds, I would, yes.’ `Would you do it for ten shillings?’ Shaw then asked her. `Certainly not!’ replied the woman `What do you take me for? A prostitute?’ `We’ve already established that,’ replied Shaw. `We’re just trying now to fix your price! Yahoo, at this point has agreed to sell itself. It’s merely haggling over the price.

Bottom line: we live in interesting times. And pass the Tums, please.

Filed under: Cloud Computing, Google, IBM, Microsoft, Search, Yahoo Tagged: | Apple, ARPANET, BBN, Blackberry, Brandeis University, CERN, Clayton Christensen, Cloud Computing, DARPA, disruptive technologies, Google, GoogleGazer, handheld wireless devices, Internet browsers, iPhone 3G, Malcolm Gladwell, Open Source, SAAS, Search, Tim Berners-Lee, Tipping Point, Yahoo