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Tuesday, December 21, 2004

Google :Start The Service First, Monetize It Later

In Google-land, search is no longer just about locating Internet Web pages. The 2005 mantra for the world's most popular search engine is "bringing more information you want." "One of the important issues with search is, if we don't have it in our index, we can't return an answer," says Google co-founder Sergey Brin. The company is now worth nearly $50 billion. Putting more information into its mammoth index was the impetus for Google's recent groundbreaking deal to digitize five huge library collections, including the New York Public Library, Stanford and Oxford. Many of the books should be scanned and available for reading online by early next year. But Google's expansion plans go way beyond dusting off old books and making them available to the masses. In the past few months, Google has added several offerings that seemingly have nothing to do with search, including, desktop search engine,
free photo editing and sharing tools, free blogging tools, free news and news alerts, free SMS query engine
With all these digital tools — plus a popular e-mail program and links to news sites — don't tell executives here at the "Googleplex" in Silicon Valley that Google is becoming a Web portal, like Yahoo and MSN. For years, Google has said its focus was simply on search. Executives, often in language that can only be described as Google-speak, insist it still is. Google's expansion plans are a natural part of the growing-up process. Danny Sullivan cites the success of Google's wildly popular text-based advertising program as fuel for the expansion. Even if Google adds products that have little to do with search, they potentially "bring more people to Google, the site gets bigger, and they have more people to show their ads to."
Perhaps Google's most acclaimed innovation of the year was the October launch of software that hunts for files on a computer's hard drive. Competitors had to scramble to catch up. Microsoft and Ask Jeeves introduced desk-top search programs last week, and Yahoo says it will have one in January.Desk-top search is another way for Google to keep users loyal for more hours a day. The same theory applies to Google's entry into free digital-photo software. How Google will make money giving away software that used to cost $30 "is the number one question I get," says Picasa general manager Lars Perkins. Digital photography is so popular, "Google wants to be in the middle of how we manage this kind of content," Perkins says. "We'll figure out how to monetize it later." This is really a unique case of business philosophy.

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