Attend an evening with Andre Agassi
In a remarkably short period of time, Google has gone from being an upstart to being the world’s most valuable media group, ahead of the outmoded gorilla Time Warner. Its financial record is awesome — and it is dispiriting that Britain cannot seem to create new global businesses like this. In the first nine months of the year, Google has broadly doubled its sales to $4.2 billion (£2.4 billion), and its net profits have risen more than fivefold to $1.1 billion, a staggering after-tax margin of 26 per cent.
Big, of course, is not necessarily bad, although it gives critics a larger target to aim at. The worry, though, is what Google is doing to maintain this kind of progress, and its growing influence on the rest of the media landscape. The idea that Google is a media company seems at first glance risible, but the impact that it has on everybody else is so profound that it is a mistake to exclude it.
Most of the world still relies on Google to deliver fast, accurate and unbiased search. The company owes its success to delivering a search engine with a simple home page, and, as it has gradually adopted advertising, by making clear what has been paid for and what not. Yet, at the same time, Google has been gradually working more closely with large content companies — signing a deal with Time Warner and taking a stake in AOL — to help to make their content available to its search engines. It has a similar relationship with Yahoo!
Optimisation is something of an ambivalent term in the search engine community. Anybody can pay for it, and the idea is that optimisers will boost a business’s presence in the web rankings, although not all practices are legitimate. Sites are ranked, for example, by the number and types of links to them. If those links are fraudulent, it is possible to fool the search engine, although Google employees try to watch out for this.
The problem with optimisation, though, is that it is difficult to find out where to draw the line between white hat and black hat techniques. As part of the Time Warner deal, previously inaccessible AOL content is being made available to Google. AOL material will be “appropriately ranked” in the future, it is said, although it is hard to know what appropriate ranking actually means.
Google is emphatic that the integrity of its search will be unaffected, and certainly there is no dramatic change, even though the company has invested $1 billion in a content business such as AOL. But the impression created — and beyond a bald press release, there is little detail publicly available — is that Google will work more closely with big internet companies, while the small ones have to fend for themselves.
This is hardly the first thing that Google has done to raise concern. The search engine has been cheerfully scanning in library books, some of which include copyright materials, as part of a plan to make relevant snippets available to searchers. Fine for the boost of free knowledge, but troubling for book publishers, which supply the marketing and distribution that make authors, particularly new ones, possible. A court case looms.
Nevertheless, far from all that Google has done is troubling. Newspapers get what they deserve when Google News reveals which news stories are derivative and which are genuinely insightful. Its success in decoupling advertising from editorial is not much fun for the media industry, but something that publishers and broadcasters will have to deal with by raising quality and charging more.
Yet, that does not mean that Google is right every time. If Google is tempted to keep throwing its weight around, the bloody-minded will want to do their search elsewhere.
Such thinking, after all, helped to prop Apple up for two decades before the iPod arrived as a residue of customers insisted on buying its computers as an act of defiance against Microsoft.
Switching from Google to Microsoft, the owner of MSN Search, may not be the obvious way to conduct the next rebellion, but it is tempting to do it, to make a tiny pinprick of a point.
Articles from our sister site WSJ.com:
You may be asked to subscribe to read certain articles
Industry sectors news at a glance. Interactive heatmap, video and podcast
Everything the Business Traveller needs to know to make a better trip
Get ready for the winter sports season, with our resort guides and snow reports
We are backing British business, what is the confidence of the nation and what businesses are succeeding?
Growing demand for energy, oil that is harder to reach and the rise of carbon dioxide emissions. We examine the energy challenge
With rail travel in Europe on the rise, we review the benefits of travelling by train
In this special section we explore new food trends to help improve your dinner party and impress guests
Enjoy further reading from Travel to Fashion, Business to Sport, discover more
Shortcuts to help you find sections and articles
1998
£47,955
12 months for the price of 11 and a 5% discount.
Offer ends 31/11/09
Check your free Experian credit report before applying
Car Insurance
to £60K + bonus (OTE £90k)
Lord Search & Selection
Location Flexible
PwC’s Consulting practice helps businesses of all shapes
and sizes work smarter and grow faster.
£85k
CPA
Highly Competitve
Specsavers
Whiteley, near Southampton
Moments from Battersea Park.
For sale with Winkworth
Find out about shared ownership.
See your free Experian credit report beforehand
7nts - Penang £499; Borneo £699; All Inclusive £799 including flights, taxes, accommodation and private transfers
For your ultimate tailor-made ski holiday, click here
Get covered on your travels with a superb range of policies at great prices. Visit InsureandGo.com
World Class Golf, Spa and preferential Beach Club. Private estate overlooking West Coast
Villas from £275 per night inclusive of Golf
Contact our advertising team for advertising and sponsorship in Times Online, The Times and The Sunday Times, or place your advertisement.
Times Online Services: Dating | Jobs | Property Search | Used Cars | Holidays | Births, Marriages, Deaths | Subscriptions | E-paper
News International associated websites: Globrix Property Search | Milkround
Copyright 2009 Times Newspapers Ltd.
This service is provided on Times Newspapers' standard Terms and Conditions. Please read our Privacy Policy.To inquire about a licence to reproduce material from Times Online, The Times or The Sunday Times, click here.This website is published by a member of the News International Group. News International Limited, 1 Virginia St, London E98 1XY, is the holding company for the News International group and is registered in England No 81701. VAT number GB 243 8054 69.