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Financial analysts and business journalists are running out of superlatives with which to describe Google these days. Has any other young company ever been on this kind of rocket-ship trajectory?
A constant drumbeat announces additions to the fast-growing Google Web toolkit and other initiatives, including one bid to cover San Francisco with wireless data connections and another to index the contents of vast libraries. Hardly a day goes by without speculation in the press about the company’s potential as a Microsoft-killer.
And there are the numbers: enormous gains in revenues and profits, a sky-rocketing valuation and, if you believe Google’s many fans, nearly unlimited potential. The most recent quarterly results were, without question, an absolute blowout beyond almost anyone’s expectations.
Without a doubt, Google is becoming a great company. It has set off a revolution in search and advertising. On balance, it does much more good than harm. With the success, however, has come a layer of hubris that threatens to encrust the excellence. Any student of history understands hubris brings trouble.
Google’s leaders too frequently act as if they are convinced of their superiority to the rest of us. Some of those actions, which are becoming difficult to dismiss as the inevitable foibles of a barely adolescent enterprise, belie the principles on which the company rose to such prominence.
There has always been an element of pride about Google, but in the earlier days it was a refreshing change from normal corporate attitudes. Refusing to offer the standard “guidance” that reinforces Wall Street’s short-term myopia was a welcome refusal to play a pernicious game.
Many decry the two-tiered stock ownership, meanwhile, as unfair to investors. I disagree. Google forthrightly stated its intentions before going public. Again, the founders and senior executives wanted the freedom to plan for the long term.
But the company’s nearly total opacity carries the idea a bit far. It’s one thing to stick to principle, but another to sneer at the world, such as when Google held a public event and had the CFO – the chief food officer, not the chief financial officer – make an appearance. That was amusing, but also the kind of stunt that leaves a long-lasting sour taste. Then there’s Google’s knife fight with the book publishing industry. This one is going to get ugly. On balance, I tend to take Google’s side in battle over the Google Print Library Project, the digital scanning and indexing of the collections of five major libraries. Publishers and authors are suing to stop Google from indexing copyrighted works without prior permission.
I think the opponents are mistaken overall, though they are raising some legitimate copyright issues. The project looks to me to be a way to increase exposure of literary works, especially lesser-known ones, and Google has insisted it will show Web searchers only a tiny excerpt, just a couple of sentences, from any book.
But Google’s pretensions that this is all to make the world a better place would insult the intelligence of the average five-year-old, much less the PhDs who occupy the company’s Silicon Valley campus. The point is to make Google an even more profitable money machine; if the project also helps the world, well, that’s a happy by-product. Then there are the privacy and China questions, which will not go away. Nor should they.
Google’s privacy policies are not sufficiently protective of users’ data, amounting in several key respects to “trust us”. Why should we? The fact that other search companies’ privacy policies are also inadequate, as Google defenders accurately note, should not excuse the lapses by the overwhelmingly dominant service in the field.
As noted here last month, moreover, Google’s willingness to do the censorious bidding of the Chinese government is at best dismaying, given the company’s knowledge-is-power basis for being. That other technology companies are equally obsequious to dictators is no excuse here, either.
Companies can change for the better, not just for the worse. Google did so in one recent incident.
Last July, Google banned all official contact with journalists from CNET, America’s top online technology news operation. The offence? CNET’s news site had published a story highlighting what can be done to invade privacy using Google’s own tools, focusing in part on Eric Schmidt, the chief executive.
The banishment, which was supposed to last for a year, drew ridicule. Within weeks, Schmidt spoke on the record with CNET, and all seemed forgiven. That showed Google’s ability to recognise a mistake and fix it.
The company should consider applying that notion in other areas. It doesn’t need friends today. Someday, it will.