September 21, 2005 8:00 AM PDT
Google builds an empire to rival Microsoft
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Google already has plenty of influence. It handles nearly half of the world's Web searches. It's hiring some of the biggest names in the industry, from the controversial Kai-Fu Lee of Microsoft to the legendary Vint Cerf, an early Internet pioneer. And it has become such the topic du jour in Silicon Valley that its search for a new corporate chef warrants significant local news coverage.
But what's next? Author Stephen Arnold has closely analyzed Google patents, engineering documents and technology and has concluded that Google has a grand ambition--to push the information age off the desktop and onto the Internet. Google, he argues, is aiming to be the network computer platform for delivering so-called "virtual" applications, or software that allows a user to perform a task on any device with an Internet connection.
"Google is this era's transformational computing platform and could be about to unseat Microsoft from its throne," Arnold writes in a summary of his book, "The Google Legacy: How Google's Internet Search is Transforming Application Software," published this month.
For all of its wild success, about 99 percent of Google's revenue still comes from advertising, mostly from Internet keyword searches. Certainly, it has built on the core business, adding everything from the Gmail free Web-based e-mail service to Google Earth, a satellite mapping service. And it has plenty of cash to spend on new technology--nearly $7 billion in cash, $4 billion alone from a secondary stock offering on Sept. 14.
The big question, of course, is what exactly CEO Eric Schmidt & Co. plan to do with that war chest.
In his book, which is available in electronic PDF form only, Arnold concludes that Google has created a supercomputer ready to deliver a host of applications to anyone with a Web browser.
"Google is setting itself up to be an application delivery system for any type of device," said Arnold, who has been a technology and financial analyst for 30 years. He has helped build the technology management practice at Booz Allen & Hamilton, served as a technology strategy officer at Ziff Communications, and worked on US West's electronic yellow pages and personalization tools used by @Home. "That is a different type of paradigm from Microsoft's" desktop-centric world, he said.
Arnold's research goes well beyond speculation that Google will buy Chinese portal Baidu.com, in which it already owns a small stake, or move further into the soon-to-explode voice over Internet Protocol market, beyond its voice chat-enabled Google Talk instant-messaging service.
The notion of a network computer isn't new. Sun Microsystems CEO Scott McNealy has for years been saying "the network is the computer." Oracle CEO Larry Ellison formed a company around the idea. It was called the "New Internet Computer Company," and it sold Web surfing devices before shuttering two years ago.
But unlike Sun and Oracle, Google's timing could be impeccable, Arnold argues. "Sun defined it. Ellison tried to build it. But Google owns it," he said.
The secret sauce
In short, from early on, Google founders Sergey Brin and Larry Page resourcefully figured out how to cluster lots of cheap servers and open-source software, configured to act like individual light bulbs on a Christmas tree that can be added or replaced without making the whole tree go dark, according to Arnold.
Indeed, Google representatives proudly display the company's unique rack-mounted server system to visitors to the Mountain View, Calif., campus.
"Google's architecture can scale. Using commodity hardware, Google can deploy more capacity at a lower cost and more quickly than a competitor relying on a system built with brand-name hardware," Arnold writes in his book.
Google's move into Web services--its Desktop Search and Sidebar products, for example--has prompted Microsoft to reorganize and combine MSN with its platform products group to help the software giant fight off Google's encroachment on its turf, said Frank Gillett, an analyst at Forrester Research.
Dark fiber, wireless
The reports of Google's interest in unused fiber optic, also known as "dark fiber," seems to support Arnold's theory.
"Dark fiber will enable greater dependency on what I call virtual applications," he said. "Once those high-speed connections link the dozen or so Google data centers, they will do stuff better, enable much more than telephony, media delivery."
Joe Kraus, a founder of the Excite.com portal that merged with Internet service provider @Home before filing for Chapter 11 bankruptcy in 2001, agreed that Google executives are likely thinking big, although he acknowledged he "doesn't have the slightest clue" what they are doing.
"They've been buying dark fiber for a good five years. It allows them to have such cheap communications between all their data
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