everything and go to your bank,
withdraw all the money you
saved for Google's IPO,
go home and stuff it
under your mattress,
and sit on it !
1.
There are thousands of geeky cultists who worship everything
Google, and cannot wait to buy some shares. None of them has ever
criticized Google for anything over the last five years. If average
investors get a chance to buy in at a reasonable price, these geeks
will quickly inflate the price beyond all reason.
2.
Google is a self-contained little world in Silicon
Valley. Their public relations department exhibits all the survival
skills of a two-year-old wandering alone in the jungle. When push
comes to shove, they cry or pout, or throw a tantrum, or they
have no comment. That's all they can do because they know little
about the big world out there, which is full of social issues that
cannot be reduced to mathematical algorithms.
3.
Google owns thousands of cheap computers, and has
produced software that ties them together in a vast
distributed network. However, the barrier to entry for a new search
engine is not that high these days. Hardware is still dropping in
price, and in coming years the software for distributed computing
on Linux boxes will be more generally available.
4.
Yahoo is trying too hard to monetize their new search
engine, but apart from this they've already shown that their
technology is as good as Google's. No longer is there anything special
about Google's secret sauce, if there ever was. PageRank, for example,
is not even important to Google's engineers these days.
5.
Google has excellent brand recognition, but how much
more saturation of the mass media can we expect before journalists
get sick of it?
6.
Google is ruled by a triumvirate -- Larry, Sergey, and
Eric. These three are very good at being geeks, and not good at much
else. Meanwhile, venture capitalists on the board of directors want
to get their money back from their Google investment. Into this
mixture, add the suspicious hype from Wall Street over Google's
impending IPO.
7.
Everyone agrees that Google's search excellence, as
defined by the quality of the results for search terms that produce
links to commercial sites, has fallen considerably over the last
twelve months.
8.
Geek buzz says that personalized search is
the Next Big Thing. The more an engine knows about you, the better
it can guess what you consider to be relevant, and the more it can
charge advertisers. Look at Google's competition: Yahoo, Amazon,
and soon Microsoft. All three know more about their customers than
Google, because all three have many years of portal experience. And
Microsoft owns your desktop. Can Google compete?
9.
Google's ad revenue is very impressive. By the end of
May 2004, they will apparently have to stop showing gambling ads
and rogue pharmacy ads, for legal reasons. What percentage of their
ad revenue comes from these two categories? We don't know, and
Google isn't likely to tell us. Under pressure, Google promised to
stop ads from rogue pharmacies on December 1, 2003, after Yahoo,
Microsoft, and AOL had already stopped them. Google could have
stopped them within a few days of this announcement, but did
nothing despite adverse publicity. It's possible that Google
planned it this way, so that their first quarter 2004 ad revenue
would show high numbers on their S-1 filing (which it certainly does).
The SEC should ask Google for ad revenue numbers for these
two categories (we filed a complaint).
Google's ad policies and techniques also face challenges from trademark
lawsuits pending in the U.S. and Europe.
10.
You can bring your dog to work, you get free gourmet lunches,
and Google offers an on-site doctor and dentist, massage
and yoga, and on-site day care. They have a fleet of Segway scooters
($4000 each). Meanwhile, behind the big colored balls and bean
bags, half of the workers are low-level contractors with access to
none of this.
"I'm not evil but you might be,
so I get ten votes per share
and you get one per share."
Does this in$pire confidence?
