Google is the General Electric of the 21st century
Last updated: June 5, 2013 6:57 pm
By John Gapper
Larry Page has boundless ambition and the capacity to
deliver unexpected products
Everywhere one looks, Google is doing remarkable things.
It could soon overtake Apple in downloads of applications; it is developing
self-driving cars; people wear its kooky augmented reality Glass spectacles; it
is signing renewable power deals in South Africa and Sweden.
From being a one-product company that tapped a stream of
wealth with paid internet search, Google is emerging as the dominant consumer
technology company of the early 21st century, along with Amazon. Fred Wilson, a
leading New York venture capitalist, accuses it of trying to control the
internet, “like Microsoft tried with personal computing ... Who will stop
Google?”
My answer is: nobody, or not easily. Indeed, the best
comparison for Google seems to me not Microsoft in the 1980s but General
Electric in the late 19th century – the age of electrification. Like GE, Google
is a multifaceted industrial enterprise riding a wave of technology with an
uncanny ability not only to invent far-reaching products but also to produce
them commercially.
It coincides with Larry Page’s ascent to being undisputed
leader of the company he founded at Stanford University with Sergey Brin 15
years ago. Instead of the “Google guys” – Mr Page, Mr Brin and Eric Schmidt,
its former chief executive and now chairman – running it as an amiable mixture
of a company and a chaotic research lab, Mr Page has made it formidably
focused.
Google’s growing lead in data analysis and artificial
intelligence became clear at its developers’ conference in May. “It’s easy for
consumers to switch to another search engine, but it is difficult to make anything
as good,” says Benedict Evans, an analyst. “Google is a massive machine
learning project, and it’s been feeding the machine for a decade.”
All of this is happening at a time of growing scepticism
about Silicon Valley – its airy claims to be changing the world for the better
when the people who most benefit are its own billionaires; its use of low-tax
jurisdictions to avoid corporate tax; the dubious ways in which many free
services collect and exploit personal data; the triviality of countless start-ups.
The social networking boom that started a decade ago is
waning, with Zynga, the internet games company, laying off 18 per cent of
employees. George Packer wrote in The New Yorker of Silicon Valley: “The
hottest tech start-ups are solving all the problems of being 20 years old, with
cash in hand, because that’s who thinks them up.”
Google is not without sin – it faces heavy criticism for
its tax avoidance, and despite its proclamation of being an open standards
company, it fights as hard as Microsoft to keep others stuck to its platform.
But Mr Page can hardly be accused of lacking purpose and vision.
He has extended its search lead into mobile, through
Android and Chrome software, and he shows no signs of being satisfied. “We
haven’t seen this rate of change in technology for a long time, probably not
since the birth of personal computing,” he remarked happily at the May
conference.
Meanwhile, other Silicon Valley giants face varying
degrees of difficulty. Investors have soured on Apple since Tim Cook became
chief executive, discouraged by, among other things, its botched attempt to
rival Google Maps. Yahoo, run by an ex-Googler, Marissa Mayer, is struggling to
replicate its engineering strength, while Facebook is trying to move to mobile.
None matches its computer science research capacity, or
ability to turn ideas into products. The clearest manifestation is Google X,
its “moonshot” research lab, which is developing wearable computers and
“autonomous” cars. But research in software and artificial intelligence lies at
Google’s core.
What was once a search company has become an internet,
data and software company with boundless ambition and the capacity to deliver a
flow of unexpected products. In that sense, Mr Page is a latter-day Thomas Edison,
a commercial inventor marked by “the utterly fearless range of his experimental
activities,” according to Randall Stross, a biographer.
Compared with the 1890s, Google resembles GE, while
Amazon is like Sears Roebuck, the catalogue shopping company that transformed
US retailing. GE was founded in 1892 and Sears Roebuck in 1893, at a time when
the continent was altered by the telegraph and electricity.
Mr Page often talks of his fascination with Nikola Tesla,
the Serbian US immigrant who worked for Edison and later fought him in the
“wars of current” – the battle between Edison and Westinghouse over whether the
US should adopt DC or AC electricity. He read a biography of Tesla as a child
and “cried at the end because I realised you can be the world’s greatest
inventor and still be a failure”.
Both Tesla and Edison were equal parts inventors and
showmen, and neither one succeeded completely in business – GE was formed in a
merger, with Edison losing control. Henry Ford is said to have called him “the
world’s greatest inventor and the world’s worst businessman”. Mr Page, who has
a $20bn fortune, scores higher.
But electricity disrupted industries as fully as the
internet. The Brooklyn Eagle wrote of incumbent gas companies: “To see them
squirm and writhe is a public satisfaction that lifts Edison to a higher plane
than that of the wonderful inventor and causes him to be regarded as a
benefactor of the human race.”
GE had many rivals, yet its combination of inventiveness
and commercial acumen marked it out from the pack, setting it up to exploit the
technology Edison had pioneered for the next century. The unnerving thing about
Mr Page is that he studies history.
john.gapper@ft.com
Copyright The Financial Times Limited 2013
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