Rudelle Blogging

Google impressive financial quarterly results seem to confirm the tremendous power of its model. Furthermore, despite his increasing domination on the Internet, Google manages to still be perceived as a cool user friendly start-up, as opposed to Microsoft often depicted as the Big Evil.
However on a closer look, Google situation is somewhat fragile. First of all, 99% of its revenues come from advertising, and above all from AdWord. On the other hand, AdSense is facing a more challenging situation in terms of returns. Outside the comfortable cocoon of its search engine, Google indeed has some serious difficulties to generate actual efficient ads returns. AdSense semantic engine is regularly pointed out to show poor outputs, resulting in disappointing click through and transformation rates.
Furthermore, so far, all attempts of Google to diversify were failures. This includes in particular video, email, cartography, storage or shopping guide. In these areas, Google has not been capable to grab a significant market share compared to its main competitors. For video, the failure of Google Video has even forced them to acquire YouTube. This acquisition has also made Google to discover the charming world of copyright infringements.
Eventually, the power of Google is due mainly to its amazing market share in search. Its domination in this area is particularly strong in Europe. The question is therefore: can anyone ever challenge Google search domination?
Google’s power is due to the fact that the search industry has not evolved in the last seven years. No one has indeed succeeded to come out with any disruptive technology. Still, disappointing experience of search engines shows that some serious improvement should be expected sometime down the road. We all experience ourselves that any search results are not exploitable.
The day a brilliant start-up will invent a revolutionary approach, the position of Google will soon become uncomfortable. Either Google will manage to copy very quickly the new algorithm of the intruder, or the shake-up will soon proved very serious. Indeed, nothing is less sticky that a search engine. Barriers to change are pretty low. In two clicks, you can loose a user you had for years. Irony is that it's precisely this way Google started his irresistible growth in the early days, passing by incumbents like Yahoo! who were incapable to react.

Following the take-over of YouTube by Google last fall, we have seen many comments on the return of the Internet bubble. This 1.6 billion dollar deal for a company with virtually no revenues was illustration that irrational thinking was infecting us again.
Well, 6 months later, it does not look at such a bad deal for Google. On the contrary, the fast growing on-line advertising market shows that it should not be such an issue for Google to monetize this extra inventory.
On-line advertising growth is very much connected to the growth of Internet itself, especially of broadband access. And this broadband access is accelerating in all major countries. As a result, e-commerce is also growing at a nice 30% rate per year with no sign to cool down.
This strong and steady e-commerce growth is financing portals, media and community sites with profitable advertising budgets. This makes the whole picture much healthier than in 1999 & 2000. This is why there is not much to worry about a bubble bust as so far, there is no bubble at all, just plain fast growing market.
Remember all those crazy IPOs in 99. Anything similar today? Not really. Not only companies are getting profitable much quicker, but investors are also much more selective. It looks like for the first time they show some memories of the past to keep the market at a reasonable and healthy level. Not bad at all. ;-)

A couple of months ago, only experts were debating over the web 2.0 phenomena. But recently, we see more and more mainstream national Medias covering Web 2.0.This new buzz gives a fresh smell of bubble.
But what is behind all the excitement?
In fact, what fascines before all the mass media, is clearly not new technologies related to Web 2.0 (Ajax or RSS for instance), nor even the community aspect (which has existed for a long time). What fascines them is two things:
1) the irresistible growth of giant Google which is eating more and more in the mouth of old superstars Yahoo! and MSN
2) the irruption of an unexpected new generation of Net players. Unknown sites like YouTube, Flickr or MySpace made spectacular rises in traffic rankings in matters of months. And even more dary, they have achieved this spectacular rocket growth almost without any dollar spent in advertising!
In 2001, after the burst of the Internet bubble, one believed that the game was over. The survivors seemed to be able to lock the market, in particular large e-commerce sites. A that time, everyone considered for instance eBay untouchable. Moreover, traditional brands finally thought they had their revenge over those arrogant pre bubble start-ups.
Suddenly, this reassuring feeling disappeared. People were surprised to rediscover a basic rule of business: positions are never secured for ever. On the Internet even more than in the old economy, new entrants can always change the rules.
Fast successes tend to fascinate people. One thinks that there must be some hidden dark secret behind such miracles. Well, in some ways, this secret could be called Web 2.0 ;-)