The Times: Tech column - Google's IPO/Unfair pricing
By David Rowan
IF YOU HAVE ever sought inspiration from visionary business books, I suggest that you visit the US Securities and Exchange Commission website at www.sec.gov and download one for free. Google's prospectus for its initial share auction is an action-packed primer for the latest creativity-focused business revolution. It is also a stark reminder that the online economy is still in its infancy, with no guarantees as to the long-term winners.
By refusing to build a conventional business, Google's founders, Larry Page and Sergey Brin, have got off to a remarkable start. Their principles of "don't be evil" and "make the world a better place" brought in $962 million (£536 million) last year, almost a third of it from outside the US. Now available in 97 languages, Google has quickly built one of the world's most trusted information businesses. Advertisers provide most of its revenue, but its unbiased search results are testament to the firm's integrity. The inspirational message for other businesses is that contented, thoughtful staff can be your greatest asset.
Googlers (as employees are known) are encouraged to spend a fifth of their time working on whatever creative projects might "improve people's lives". Many of the firm's biggest innovations began in "20 per cent time", from its AdSense advertising programme to its indispensable news-aggregation service.
"Most risky projects fizzle, often teaching us something," the founders say. "Others succeed and become attractive businesses." Staff are also offered free meals, doctors and even washing machines - benefits, the firm has found, "that can save employees considerable time, and improve their health and productivity".
But for all its focus on Google "doing things that matter" for humanity, it is the document's section on "risk factors" that tellingly deflates the hype. "We face formidable competition in every aspect of our business," the founders admit, not merely from the likes of Microsoft and Yahoo! but also from smaller online ad and search firms. New ad-blocking technologies could, they say, destroy Google's business model; the growth in non-PC devices could make its web technology irrelevant; and new proprietory document formats could block its searches. Not forgetting malicious hackers, or "index spammers", who undermine its trusted search listings. This, after all, is just a five-year-old start-up in an unsettled business sector. The fraction of its shares due for auction will provide a few billion dollars more for the battle ahead. But think back to the overfinanced "dead certs" of 1999 and reflect where they are today.
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Our crusade continues against absurdly high prices endured by UK consumers. Your e-mails seethe with frustration that, in a global marketplace, we can pay twice as much as Americans for gadgets or software. Eric Roth found the same Garmin GPS navigation device at £100 on Amazon UK, but at half the price on Amazon US; another reader found Bose loudspeakers that cost £170 here on sale for just $158 (£88) plus tax in the US. Even allowing for tax, shipping and exchange rates, the differential looks fishy, especially for downloadable software. We would be delighted to hear any manufacturer's defence (at david.rowan@thetimes.co.uk). Meanwhile, the search continues for your most audacious example of unfair pricing.
(The Times, May 11 2004)
IF YOU HAVE ever sought inspiration from visionary business books, I suggest that you visit the US Securities and Exchange Commission website at www.sec.gov and download one for free. Google's prospectus for its initial share auction is an action-packed primer for the latest creativity-focused business revolution. It is also a stark reminder that the online economy is still in its infancy, with no guarantees as to the long-term winners.
By refusing to build a conventional business, Google's founders, Larry Page and Sergey Brin, have got off to a remarkable start. Their principles of "don't be evil" and "make the world a better place" brought in $962 million (£536 million) last year, almost a third of it from outside the US. Now available in 97 languages, Google has quickly built one of the world's most trusted information businesses. Advertisers provide most of its revenue, but its unbiased search results are testament to the firm's integrity. The inspirational message for other businesses is that contented, thoughtful staff can be your greatest asset.
Googlers (as employees are known) are encouraged to spend a fifth of their time working on whatever creative projects might "improve people's lives". Many of the firm's biggest innovations began in "20 per cent time", from its AdSense advertising programme to its indispensable news-aggregation service.
"Most risky projects fizzle, often teaching us something," the founders say. "Others succeed and become attractive businesses." Staff are also offered free meals, doctors and even washing machines - benefits, the firm has found, "that can save employees considerable time, and improve their health and productivity".
But for all its focus on Google "doing things that matter" for humanity, it is the document's section on "risk factors" that tellingly deflates the hype. "We face formidable competition in every aspect of our business," the founders admit, not merely from the likes of Microsoft and Yahoo! but also from smaller online ad and search firms. New ad-blocking technologies could, they say, destroy Google's business model; the growth in non-PC devices could make its web technology irrelevant; and new proprietory document formats could block its searches. Not forgetting malicious hackers, or "index spammers", who undermine its trusted search listings. This, after all, is just a five-year-old start-up in an unsettled business sector. The fraction of its shares due for auction will provide a few billion dollars more for the battle ahead. But think back to the overfinanced "dead certs" of 1999 and reflect where they are today.
+++
Our crusade continues against absurdly high prices endured by UK consumers. Your e-mails seethe with frustration that, in a global marketplace, we can pay twice as much as Americans for gadgets or software. Eric Roth found the same Garmin GPS navigation device at £100 on Amazon UK, but at half the price on Amazon US; another reader found Bose loudspeakers that cost £170 here on sale for just $158 (£88) plus tax in the US. Even allowing for tax, shipping and exchange rates, the differential looks fishy, especially for downloadable software. We would be delighted to hear any manufacturer's defence (at david.rowan@thetimes.co.uk). Meanwhile, the search continues for your most audacious example of unfair pricing.
(The Times, May 11 2004)
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