Congratulations are in order to Google on their upcoming IPO. If ever there was an Internet company that deserved to be traded publicly, it’s this one. A few points are worth noting about the way they’re doing things, that other companies should emulate:

• Not speaking to their shareholders solely in legalese accompanied by marketing gibberish, but instead giving out an owners manual which explains, in normal English, what the company is all about and how it plans to proceed.

• Dutch auction IPO. Every company should do this. The old system was corrupt, and was essentially a conspiracy to rip off the average shareholders and founders in favor of institutional investors, who would flip their stock, received at below market prices, on the day of the IPO. Google will show that it is possible to make it work in their IPO, and I expect that in the future, more companies will follow suit.
• Their decision not to smooth quarterly earnings or give estimates to Wall Street of what earnings will look like in advance of each quarterly close. Companies can become slaves to Wall Street by focusing too closely on the quarterly earnings, and often miss growth opportunities because the initial hit to the P&L that would be seen in one quarter as investments are initially made in new products and technology can be too distressing for many in management. Better for Google, a company with a bright if uncertain future, to simply state that they are going to produce products as they ordinarily would, without regard to quarterly earnings. That means that we’ll continue to see the creative thinking come out of Google in the future, that we have in the past.

The only bad side to the equation is that they’re coming out with two classes of stock that effectively prevent average shareholders from taking control of the company. It’s their choice, but I would assume that this would affect the valuation of the stock in auction.

Now for some required reading. First, read about the way in which Google’s architecture works, and then read my thoughts about what personal computers should look like in the next decade. See any commonalities?

Word on the tech street is that there are a whole host of new companies out there whose sole exit strategy is to be bought by Google after their IPO. It would be a mistake for Google to spend their IPO cash in the manner that Netscape did, buying all sorts of new companies, disrupting their internal culture, and losing product focus. Besides which, engineers at Google already are required to spend a portion of their time on new, independent projects. It would seem as if they have enough creativity internally to require few outside purchases.

Rather, what Google should be doing is redefining the computing paradigm. Google had already built one of the world’s largest distributed architecture systems in the world. Now it’s time to extend it to the desktop, to enable file sharing and backup among home users and corporate users, to enable P2P streaming across the Internet, using Google’s infrastructure as a means to launch such a service in the early days when there will be few Google PCs out there. Basically, build a wholly P2P Linux operating system from the ground up, one that works with Google’s existing infrastructure to give it backbone and get it launched. I think that people, businesses and home users, would buy such a PC, particularly if it was branded by Google. Just check out this article on Google’s impact on the wider culture at large.

I may just be fantasizing with this, but the more I think about what Google has built, it looks to me like an architecture play, and search was just the first product for it. I really hope that’s the case, because the computing world could really use that kind of a shake up right about now.

This entry was posted on Friday, April 30th, 2004 at 6:59 am and is filed under technology. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.