A Google Bubble

This echos my feelings well.

Long years of experience have taught me when all the lemmings are running in one direction toward the proverbial cliff, it's a promising time to lean in the other direction.

We seem to have reached that moment with Google. There's no question but that Google has transformed the tech industry with its search engine prowess and its Google Earth technology that allows you to peek inside the Kremlin.

But the hype reached a turning point with predictions that Google was going to take over the media and advertising industries and, indeed, threaten any company that depends on flows of information, which meant basically everybody. All of which justified its stock price of nearly $500 at one point.

There are several criticisms of the company, with this being the one I keep harping on to friends:

Hubris and the assumption that technology can solve every problem. This is a classic mistake that we saw in the first Internet bubble-the blind assumption that the "new world" is going to completely replace the "old world." But the reality is, no amount of technology can completely replace the web of relationships in an industry such as advertising.

As an outsider reading about Google, they seem to have the problem of taking their technology hammer and viewing every problem as a nail. As I pointed out before, they may be hiring the best and brightest techies, but I haven't read about them hiring the best and brightest in any other fields. Good technology does not necessarily equal good business.

How to Have Better Business Meetings

The real question is this – what happens when a competitor comes along with better search technology? Do people keep using Google because they are familiar with it, or do they abandon it in droves for the better results? The economic switching costs are very low, but what about the psychological switching costs? We like things with which we are familiar.

  • Bill Wells

    And some like the unfamiliar to be discovered and understood. The technology is slightly hyped to put it mildly, but never the less has made our lives a little more complex.