In years past, Microsoft Corp. (MSFT ) could freeze competitors and send investors scurrying just by uttering the name of a market it fancied. Today, Google Inc. (GOOG ) is the 800-pound octopus that is filling potential rivals with dread and envy.
In typical Google fashion, the company chose an unusual moment -- the sleepy doldrums of mid-August -- to shake up the tech world with a flurry of announcements. First, Google confirmed that it had quietly acquired mobile-phone software startup Android Inc. Then came the surprising news that it would add $4 billion to its cash war chest with a secondary stock offering. And then on Aug. 24, the search giant announced it was getting into the instant messaging and Internet telephony businesses. No wonder tech watchers from Silicon Valley to Bangalore are all wondering the same thing: What the heck is Google up to?
No point asking the Mountain View (Calif.) company. Google, as usual, is about as talkative as a telephone pole. But in dissecting the company's spate of recent hires, investments, and acquisitions you can catch tantalizing glimpses of where the search giant could be headed. Talk about ambition. Google appears to be contemplating forays into everything from Wi-Fi Internet access and mobile devices to operating systems and e-commerce.
Google faces serious challenges of course, not least because it is playing catch-up in some of these fields. But if the company's outsize ambitions come to fruition, Google would suddenly be on a collision course with some pretty heavy hitters. The company is already challenging Microsoft and Yahoo! Inc. (YHOO ). Now it seems to be getting ready to stomp on the turf of such giants as eBay (EBAY ), Motorola (MOT ), Nokia (NOK ), SBC Communications (SBC ), and Verizon (VZ ). And if you're a tech startup working similar technologies as the savvy folks in the Googleplex, you have two basic choices: Plan to be acquired -- or get run over. "There is a new fear and caution about how Google will use its war chest," says Chris Shipley, producer of the DEMO Conference, where startups strut their stuff.
If the search behemoth goes ahead with its myriad initiatives, it will be Google vs. Everyone. Here's a glimpse of where Google may be headed:
GOOGLE VS. VERIZON Playing a role in how consumers connect to the Net is an important step for online giants. It helps deepen the link between Web surfers and Internet companies while providing a window for these outfits to showcase products and services. Google clearly covets such a role, but it has shown no interest in mimicking the access businesses of other tech titans -- piling up millions of subscribers like America Online (TWX ) or following Yahoo's lead of partnering with telecom giants.
Google may be showing its hand in this arena with a couple of little-noticed business moves. In April, Google teamed up with wireless startup Feeva Inc. to sponsor a Wi-Fi hot zone in San Francisco in which Google appears as the start page. Google says this is all part of its mission to make access to information more readily available, but it won't comment on other Wi-Fi moves. Some analysts, though, believe it would make perfect sense for Google to bankroll Wi-Fi access points, not only allowing Google to get more users but also to target ads better locally -- a huge growth area. "Google wants there to be more search moments," says Esme Vos, editor of the MuniWireless Weblog and a consultant to cities deploying Wi-Fi solutions. "This would make a lot of sense."
Meanwhile, in July, Google invested in Current Communications Group LLC, a company that offers broadband access over power lines. The company has been rolling out its service to a few markets in the U.S., including Cincinnati. Verizon and SBC take note. These moves show Google is "really interested in affording people the greatest possible access and speeds," says Scott H. Kessler, an equity analyst at Standard & Poor's (MHP ).
GOOGLE VS. MOTOROLA Former insiders say Larry Page -- who, with Sergey Brin, founded the company -- has ruminated in years past about offering a Google mobile phone, allowing users to search the Net easily and get data from the device. Although a fiercely competitive space crowded with companies like Motorola and Nokia, the barriers to entry are getting lower all the time, thanks to a passel of contract manufacturers from Taiwan and elsewhere eager to make phones cheaply for anyone interested in breaking into the market.
At the least, recent acquisitions show the company is working on a software platform for mobile phones. In July, the company snatched up the secretive startup Android, founded by Andy Rubin. Rubin's previous startup was Danger Inc., which developed the popular Hiptop communications device. Although little is known about Android, one person familiar with the company says its engineers at one point had been working on an operating system for mobile phones.
Google also buttressed its mobile-software arsenal with its May acquisition of Dodgeball. The startup has developed social-networking software for mobile devices. A Dodgeball user, for instance, could contact a group of friends in a particular vicinity with a single message on a mobile phone. Google declines to comment on how it intends to utilize the Dodgeball and Android technologies.
GOOGLE VS. MICROSOFT Google has been poaching talented engineers with a wealth of expertise in two Microsoft strongholds: browsers and operating systems. One source familiar with the company says some of these hires are working on an Internet operating system that might run on top of Linux and could compete with Microsoft's Windows franchise. Although any such offering may be years out, it seems plausible based on the talent Google has lured. In recent years, it has hired several architects of Microsoft's .Net strategy -- an attempt to expand its operating system dominance to the Internet. If Google is indeed contemplating an OS, it would amount to an attack on the very foundation of Microsoft.
Google's raid on browser talent has been just as important. In the past year it has hired several top developers of the Firefox browser, a well-regarded but distant challenger to Microsoft's Internet Explorer. "If I'm Microsoft, I'm watching these guys co-opt my desktop," says Michael Gartenberg, an analyst at Jupiter Research. "I would be concerned about... the sheer power of their presence."
GOOGLE VS. eBAY Google has not wowed anybody in online commerce so far. Its shopping search site Froogle has not distinguished itself from the pack, and it garners only a fraction of the visitors that go to competing services, such as Yahoo! Shopping. But Google concedes that it is working on an online payment platform -- which could put it in direct competition with eBay's PayPal service.
Another possibility: Google could eventually allow individuals to post items for sale on Froogle. Google's recent hiring of Louis Monier, former director of eBay's advanced technology research, has only added to such speculation.
It's a good bet Google is pondering all of these possibilities and more. The real question is what projects will get the resources inside Google and see the light of day. With uncertainty like that, Google will have the rest of the tech world on edge for some time to come.
By Ben Elgin in San Mateo, Calif., with Arik Hesseldahl in New York