26 February 2010

"Google will not survive* " (Prediction v2.0)

My post on this topic generated some interesting and thought-provoking feedback. In my post, the asterisk-footnoted qualification said: "* in its current form". An engineering-minded friend wrote to me and asked if there is anything that ever truly survives "in its current form". Having considered questions of entropy, biology, philosophy, and law, I suggested that perhaps a Hydrogen atom might.

This forced me to re-think, so let me re-state my proposition and follow-up with some additional detail. Here, then, is my Google Prediction (v2.0):

     Google will not survive*
          *as a thriving multinational enterprise with global business presence and global business interests unless and until it decides to undertake a major restructure of its corporate assets, its operational methods, and its technical architecture.

Now let me spell out what I predict will happen, unless Google decides to change all of the above.

First, Google will choose to withdraw from the Chinese market because it disagrees with China's developing policy on Internet regulation. Google could decide that the regulatory environment there is more trouble than it is worth (however one defines "worth"). Google might then try to withdraw from the Italian market, because it does not like having its senior executives tried in absentia for crimes related to data protection and privacy. This pattern could continue until Google withdraws from every market in the world where it feels it is to risky to do business the "Google Way" (i.e., the way it does today). If it follows this pattern then Google could collapse into the single market in which it seems most comfortable: the US.

By "withdraw from the market", I mean that Google would close down any physical office it may have, reject offers of business dealings from partners in those places, make certain that it has no assets in that country, etc. US multinationals routinely followed this pattern in the 1950s 60s and 70s, in response to changing laws (punitive taxes, exchange controls, property seizures, whatever) that were targeted at multinational enterprises.

Google might then go the extra step and attempt to block people who are in these "abandoned" markets from accessing the Google service, but maybe not. This is really a risk management exercise for Google. If they feel that allowing access could produce more liability than income, then blocking access from those countries is a rational response. (One of many.)

Then, some countries might decide that Google's service constitutes a danger to its own citizens and attempt to block people within its borders from being able to access Google's service. China might, for example, decide that Google is now "off limits" for any request traffic originating from within China.

Note that all of the above factors do not in any way depend upon any intervention or lack of intervention by the US government. This would really boil down to "Google vs everyone else in the world". (Personally, I'm betting on everyone else in the long term.)

If Google wants to avoid this result, then it needs to re-think its corporate strategy ("the Google Way"), re-structure its corporate assets, and re-architect its service offering to take account of the fact that the world is not a single community with a single set of rules.