What happened at Google?

A brief post.... Google's stock price dropped 8.3% on Friday in the US and already some of the press are preaching "gloom and doom" about Google's business model. From what I can gather, the sell-off was triggered by news that the US Government has issued a subpoena for certain internet search data logs for reasons of "national security" (give me a break... but that is another topic for another time) and concerns about Google's "reliance on advertising as a business model." It seems that the drop wiped something like US$11 BILLION off the value of Google.

My 2 cents worth - I think that this noise around Google reflects the unfortunate habit of governments and markets seeking to "gain control" of businesses which challenge the establishment and propose to change the way things are done. The Google team are brilliant business people (as are the teams at Yahoo, MSN, AOL and others like them). They understand the way the internet is transforming business and they are making money from it. Furthermore, the close to $10 BILLION that Google expects to earn from online advertising revenues this year has to come from somewhere - and it is the traditional media who are feeling the crunch. These businesses are rolling ... quickly and those established players under threat are now not responding from a position of strength - It might be time to look for other ways to slow the juggernaut and spreading a bit of FUD just might help.

The "reliance on advertising concern" is a real tilt at a windmill - ALL media businesses rely primarliy on advertising and they have done OK... and the "security concerns" that are supposed to "push online users away from search" are also a bit of a stretch.... Face it folks, the game has changed and the traditional media players just have to respond..... buy just getting BETTER at what they do and by adapting to this new competitive terrain.

[end rant]