Good article on fortune.com by Adam Lashinsky on where Google goes from here. Definitely worth a read.
It’s a fascinating question. Google was a company started by smart guys with a good idea. They stumbled into a helluva advertising model that printed money based on intent (goto.com actually did the work of invented that). They then used these funds to build the kind of company that people love working at, that rewards risk-taking and innovation, and have since been wildly successful. Now they have one product that mints money ($2B a quarter according to the article), and a bunch of other cool products that people love using…but don’t make any money. And now at 15,000+ employees, they face ‘big companyness’ creeping in and the great early employees deserting for their own startups and many of the younger ones (with a bunch of highly notable exceptions) decamping for -the- hot startup, Facebook. Where does Google go from here? The article doesn’t say it, but we’ll all get the answer when they miss earnings for a few quarters in a row. Though I don’t doubt that Sergey, Larry, and Eric could live with the stock punishment, I’m not sure how the employees will feel about it. Even as Google switches to RSU’s (Restricted stock units. they differ from options in that you get fewer, but you don’t have to buy them…you get the whole thing ‘given’ to you. so you’re much less sensitive to the price getting above a certain price (your strike price) and you make gobs of money just by having them), it definitely hurts morale when your stock is viewed as a dog, old employees retire or go do their own thing, and the kinds of employees you used to get stop coming. Do you double-down and risk big or pare back and try to nail earnings to get your momentum back?
It’ll be fascinating to watch. Disclosure: I have, and still do, own a few GOOG shares.

One Response
Megan
May 13th, 2008 at 9:24 pm
1I was, and still am kind of, afraid to comment here because I admit I can’t completely grasp some of the stuff you blog about (although I wish I could) and in effect don’t really have anything useful to say…but I just wanted to say even if the Apprentice was a weird show you are really cool, I admire the way you analyze things, and I wish I could think in the ways you do.
Sorry for the long winded hello. More power
Sincerely,
Meg
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