Future Google: Know your frenemy

Google changed the web in just ten years. With help from Sir Martin Sorrell, Maurice Levy and Google's UK bosses, Gareth Jones maps out the next decade for the internet giant.

On 9 September 1998, Stanford University dropouts Larry Page and Sergey Brin formed Google Inc. Their mission was to "organise all the world's information and make it universally accessible and useful".

Having launched to little acclaim with a staff of three in a rented garage in Menlow Park, California, Google has gone on to establish itself as one of the world's most powerful and revered companies. It now boasts annual revenues of nearly $17 billion (£9bn), profits of $5bn and a global workforce of more than 19,000 employees.

In little more than a decade, Google has fundamentally changed the way in which the web is navigated. It has pioneered search engine marketing, transformed the global online economy and invested billions, expanding its empire with the acquisition of more than 40 companies including web giantYouTube and ad-serving specialist DoubleClick.

Since floating on the US Stock Exchange in 2004, Google's market capitalisation has rocketed to overshadow that of News Corp, Time Warner and Viacom combined. Its founders - unapologetic computer geeks - are now believed to be worth in excess of $18bn each. Not bad for a company that started off answering just 10,000 search queries a day.

Despite its humble beginnings, Google now controls 40% of online advertising, as well as 70% of paid search, and is one of the fastest-growing companies of all time.

With the desire to innovate still at its core, Google's product range is continually expanding, reaching beyond online search and display advertising into print and TV.

This unfettered ambition, combined with its aggressive expansion, has led many to question Google's 'Don't be evil' code of conduct. But with lofty developments such as cloud computing and semantic search on the horizon, it's clear that what we've seen so far is just the tip of Google's iceberg. If the internet giant manages to sidestep growing privacy concerns surrounding the amount of user data it stores, then the next ten years promise to be even more eventful than the first.


2008: Google Chrome marks the first step towards cloud computing, which will eventually see all the world's information stored virtually on Google's servers (the cloud) rather than on PC hard drives.

2009: The credit crunch shrinks ad spend. Google is forced to stop buying start-ups, causing the second dotcom bubble to burst.

2010: Google and DoubleClick launch behavioural-targeting capability incorporating user search terms. The US High Court orders Google to reduce the amount of time it holds user data for.

2011: Google's annual income breaches the $50bn mark, equivalent to almost 10% of global advertising revenues. This prompts calls for tighter regulation to be put in place to ensure an open market.

2012: Google Android dominates the mobile internet. It is used by 3bn people worldwide, far more than access the web via a PC. Revenue generated via the mobile web dwarfs income from PC-based search.

2013: Google lifts the lid on an automated exchange for global media and advertising. Brand owners are now able to buy online, mobile, TV, press and radio ad slots in a single transaction via Google AdWords. As a result, the internet giant is in a position to track and measure the effectiveness and inter-relationship of advertising across all channels.

2014: Google uses its trillion-dollar revenue to make a hostile takeover of News Corporation. It buys back catalogues of major movie studios and launches Google TV. 20th Century Fox releases a $200m movie: Don't Be Evil - The Google Story.

2015: Google's semantic web becomes the main way that consumers access the internet. Businesses and individuals are quick to latch on to the benefits of the 'intelligent web', as it helps to boost profits and makes way for more leisure time. The average working week is cut from five to four days, prompting calls for Sergey Brin to run for US president.

2016: Google finally makes the common-or-garden PC redundant with a universal log-in for all user software. Files and data are housed centrally on the Google Cloud.

2017: Google finalises the purchase of Facebook despite the considerable fall in usage. In addition, it buys LiveJournal, Twitter, FriendFeed, Technorati and a host of other businesses.

2018: Microsoft fails to prove its side of the argument in the seemingly never-ending anti-trust case against Google, and the break-up of the business is narrowly avoided.


After investing in the US space travel agency in 2008 and embarking on his first private space flight in 2011, universal president of Google, Sergey Brin, announces his intention to establish the megacorp as the next pioneer of outer space. With this end in mind, it takes over Nasa, reinvents the space shuttle programme and establishes the first lunar colony.


- Matt Brittin, joint managing director, Google UK

Brittin admits the pace of change is such that it's almost "impossible to imagine" what the company will look like ten years down the line. However, he insists Google is more focused than ever before on "faster innovation, great engineering and better consumer experiences".

Most of his time is spent working with advertisers and overseeing the day-to-day running of Google in the UK, but the Cambridge graduate clearly shares the drive and vision of the internet giant's founding fathers. With the UK firmly established as one of the world's most dynamic digital landscapes, Brittin is devoting an increasing amount of energy to helping shape Google's future.

Refining targeting

"We are spending more time talking to our engineers, not just in San Francisco but around the world, about what consumers are doing online and what tools we need to develop to make it easier for advertisers to reach them," he says.

For Brittin, the launch of Google Chrome represents a declaration of the internet giant's ambition to revolutionise the online experience. Not only will the open-source internet browser challenge the dominance of Microsoft's Internet Explorer, but it also heralds the dawn of cloud computing - an innovation that looks set to make the PC redundant.

"We were frustrated with the pace of development from browsers and wanted to take a step forward," says Brittin. "Chrome is us saying we think we can build a better browser. It's fast, it's secure, it's robust, it's easy to use. It does its job very well."

Beyond hardware

"We've got a vision whereby ever cheaper and more powerful online storage allows consumers to have all of their information hosted on the web," he adds. "Cloud computing will make hardware become far less important. We are not far off a world where you can pick up any device, be it a PC or a mobile, and simply say 'Be mine' in order to access every file you've ever created."

Another key area of development for Google is mobile. Android, its new mobile operating system, has been designed to power a new generation of handsets. "The mobile web is still a frustrating experience and we want to make it better," Brittin explains.

Google will, of course, continue to develop its core search offering, which has become a "fundamental" human behaviour, Brittin argues. "Our strategy is search, advertising and applications. Our mantra is to always be in beta," he says. "Nothing is ever just built in the digital world."


'Googol' is the mathematical term for a 1 followed by 100 zeros. It is claimed Google is a spelling mistake made by the original founders.

Page and Brin originally called their search engine BackRub, because of the 'back links' to a given website.

Google's homepage can be viewed in more than 100 languages including Urdu, Latin and Klingon.

Google employees are encouraged to use 20% of their time working on their own projects.

The homepage is so bare because the founders didn't know html and just wanted a quick user-interface.


- Sir Martin Sorrell, chief executive, WPP

It may be a truism to say Google is a phenomenon, but what other company has grown to a market value of $150bn in ten years? It was certainly big enough for Warren Buffett to question Google's value when he was in China last year - just as its market value outstripped Berkshire Hathaway. The stock has fallen since but I don't know whether the two events are related.

In any event, I doubt Google will falter under its very young founders and its slightly older chief executive. True, it faces significant challenges, but it has an almost monopolistic position in search.

Google's margins are formidable; its investment in R&D is equally impressive. But rather than spending money on gimmickry such as free staff meals or prizes for getting a robot to the moon, it should perhaps concentrate on mobile search and advertising. Not that it's slacking: 500,000 handsets using its Android mobile software are estimated to be sold in Q4 of this year.

As for the challenges, the law of big numbers comes into play. As Google grows, maintaining that growth rate becomes ever harder. Also, if the stock flags, the brilliant PhDs will quit to start their own companies. That's what we've got to watch for - not just Google and its next big thing, but who's coming after that.


- Mark Howe, joint managing director, Google UK

For Howe, who oversees the agency side of the business, Google's future is firmly rooted in search, which now provides the starting point for virtually every online journey. "In the early days, people were unsure of Google and what it was all about," he says. "Now it's become part of the vernacular around the world. Our challenge is to keep investing, keep innovating, keep striving to remain relevant to consumers.

"Google is about speed and latency," he adds. "Every extra web page we index and every second we shave off search results affects the consumer experience and ultimately our revenues.

"The opportunity to grow our business by improving the way consumers search the web via PC or mobile is entirely down to speed."

Positives out of a negative

Howe, a TV veteran of more than 20 years before joining Google, believes the economic downturn will make search increasingly crucial to brands. "Search has never been more important than now at a time when people are cutting their marketing budgets," he says. "We don't have to aggressively sell search any more, but what we do have to do is encourage marketers to understand how it works with all other media."

The personal experience

In this respect, one of Google's most significant advancements promises to be universal search, which allows images, videos and maps to be displayed alongside the existing listings (see page 48). "With universal search, you have a very personalised service either on your desktop or mobile handset," he explains. "This will fundamentally change the way people interact with brands online."

Google's near-monopoly of the UK search sector has already landed it in hot water, with consumers concerned about the huge amount of personal data the internet giant stores. Howe is well aware of how damaging it is for Google to be seen as an Orwellian 'Big Brother'-type entity, vowing to do more to tackle privacy issues. "We don't go out and discuss enough of the good work we are doing about improving privacy," he says. "It is vital we get this message across."

For Google's success to continue into its next decade, Howe believes it is crucial it replicates its search dominance in other areas. "Our next biggest challenge is to do what we've done in search in video," he argues.


- Jonathan Nelson, chairman, Omnicom Digital

Google is certainly expanding its advertising platform well beyond search. But, I believe in its next decade, it will maintain the focus and discipline it needs to deliver on that opportunity. And whatever information and processes in the advertising business that Google can automate, as it has for Yellow Pages and search ads, it will.

For ten years, Google has focused on building a better marketing mousetrap that automates the buy and sell sides of media placement on its networks. So while others define their conflicted relationships with Google as "frenemy" or "froe", we welcome Google and its marketing algorithms, because we believe more efficient media facilitates more effective advertising. We and our clients look forward to wishing Google a happy 20th.


- Jeff Henry, chief executive, ITV Consumer

Let's go back more than 50 years, when there was a different new entrant into the market - ITV. But there was one stark difference: the regulations placed upon us to ensure an open market have, to date, failed to appear on Google.

Take the launch of Chrome. Should we not be horrified about an organisation with such power it even has the mindset to think about launching an application that asks consumers to sign away all rights as they innocently type into a browser?

Should this responsibility be left to the likes of the Chinese government [which banned Google] or does one leave it to natural market forces?


- Erik Huggers, director of future media and technology, BBC

One of the biggest challenges for Google will be to find other mass-market applications beyond search that can be monetised using advertising. There are many opportunities, but two in particular that I would highlight.

First, on the back of its current search business Google will create global economies of scale in data centres. With this capability in place, it will make a big push into software as a service. Google Apps is a nice start, but in a couple of releases we could start to see major companies adopting these enterprise services.

Second, given the size of the global radio and TV advertising business, this must be an attractive target. Early and expensive forays into it via the YouTube acquisition have yet to pay off. As the media and entertainment industries move online, it will be interesting to see how Google intends to get into our living rooms to claim a piece of the business.

Maybe the biggest challenge of all will be for Google to retain the trust of its users. At what point do consumers feel uncomfortable with a company that knows more about them than they know about themselves? The well-known motto 'Don't be evil' will not be enough.


- Nigel Morris, chief executive, Isobar

In the next three years, Google will create the 'Cloud Computing Environment' - an operating system in the sky. It will have more data storage and processing power than anyone can imagine.

Commercially, during those three years, it will continue to lead the media agenda and grow revenues, and its valuation mostly holds up.

It fails to adequately monetise its media assets, and Facebook becomes the alternative as a critical mass of consumers seek opinion over neutral search results. As China's economic power strengthens, Baidu expands out of Asia to become a real threat to the core business.

Ten years out, Google becomes mired in a stream of anti-trust and privacy cases. As commercial performance stalls, the pressure mounts. But Google is still a strategic asset. To avoid a hostile foreign takeover by China Mobile, a deal is brokered by ex-president Obama. The commercial assets are acquired by Amazon and 'The Google Cloud Computing Environment' is taken under the control of the US Government. Or not.


- Jonathan Gillespie, head of media solutions, Google UK

Gillespie has arguably one of the most interesting jobs at Google. With responsibility for driving video and display advertising across YouTube and the Google Content Network, he plays a vital role in shaping the company's future UK strategy.

Having shelled out nearly $5bn (£2.85bn) acquiring YouTube and DoubleClick, Google has declared its intention to dominate in digital display advertising. Gillespie's job is to help make this happen. "Our philosophy is to bring transparency and interactivity into display," he says.

Magic of moving image

Video is crucial to Google's expansion beyond paid-search. According to comScore, YouTube already commands a 44% share of the online video market, a massive global audience that Google is rushing to monetise. But Gillespie is convinced success here depends entirely on developing ad formats that are sympathetic to users.

"The reason YouTube has become what it is around the world is because users get exactly what they want," Gillespie says. "We are trying to work out how brands can enter this sphere without ruining the consumer experience. This means moving away from the interruptive ad model."

He is already working to roll out InVideo, a semi-transparent ad format that sits over selected YouTube clips. However, he claims there are many more formats, including high-definition ads, in the pipeline aimed at helping brands exploit the boom in online video.

One-stop shopping

The next phase of development will see the roll out of rich-media ads across the thousands of websites in the Google Content Network. With DoubleClick under its belt, Google can now draw on the expertise of ad technology company Tangozebra to bolster its display credentials. The idea is that Google will eventually become a one-stop shop for all forms of digital marketing.

Again this is just a drop in the ocean. In the US, Google is already selling TV airtime and print ads in more than 200 newspapers. Its multi-platform reach will eventually enable Google to launch a universal trading platform. "Allowing marketers to use an AdWords-type interface to buy inventory across platforms has real benefits," Gillespie says. "Brand owners can look in a single place to see where their audience is."


- Babs Rangaiah, global head of planning, Unilever

Google has made great innovations in its brief history and these will continue over the next decade. Google is looking into more businesses than we can count. It is scanning every book ever made, digitising and customising health records for people, creating a TV network, launching a browser and rolling out a mobile phone. Google is building a loyal database with its customised services: iGoogle, Google Alerts, YouTube registrations and so on.

This, along with its search data and its acquisition of DoubleClick, will allow it to collect much deeper data and access to location, behavioural and demographic information that will offer marketers laser targeting abilities with customised creative that is currently unimaginable.


- Guy Phillipson, chief executive, IAB

While UK search is relatively mature, there's a lot of growth left on the planet for Google's first killer application. That's not to say rival companies won't do well - PPC is here to stay and some healthy competition will do Google good.

But considering Google's mission to "organise the world's information", I'd expect it to attempt to buy important gateways: for home entertainment, a Google Electronic Programme Guide, while Google Earth could mutate into a 3D personal navigation system. Copyright is the challenge. But as demand grows for free content, that vital barrier could be swept away. Then the fun really begins!


- Maurice Levy, chairman and chief executive, Publicis Groupe

In its first decade, Google created a formidable technology - for the first time in civilisation, everyone can have access to (almost) all information in the world, instantly.

Its long-term viability now depends on its ability to use the technology responsibly and generously. It must make sure that the media markets it influences are open and transparent to all players. It must ensure it supports the economics of a free and investigative press. It must encourage innovation from customers and competitors, and not be arrogant enough to think that these come only from within.

Google's power and influence carries huge responsibilities, and it also invites the world's scrutiny. We work closely with Google, and we believe the management team understands its role more broadly than just a mere IT firm and will use its power wisely. If its first decade was about scaling technology, the second decade will be about scaling its character.