Forrester on Google
There is a very refreshing report at Forrester Research regarding the Google IPO that's worth a read. It's refreshing because it is highly cautionary -- not really what you're used to hearing out of Wall Street. The report is free, though you have to go through an annoying registration process to get it. Here are some of the key sections:

Google has made lots of enemies. It is destroying the pop-up ad business and shifting ad revenue to paid search, of which it is the leader. MSN, AOL, Yahoo!, and other sites are getting bypassed and deconstructed by Googling users. ... The control freaks of Redmond do not like it when anyone starts bypassing their monopoly or slapping toolbars on top of their operating systems and browsers.

No barriers to entry. ... How long will it take to switch out of Google? Seconds.

The Web is changing. Google is a step in the long march to better search. Yes, Google's scheme yields fantastic results. But the Web is inexorably dynamic. During the next five years, it will move from containing primarily file-based content (HTML pages) to containing more executable content (e.g., online gaming or new structures imposed by Web services like XML). When that happens, the usefulness of link-based search will wane. Simply stated, Google is very much of the times, with no advantage in the more structured, executable Internet that lies ahead.

... (T)his makes the company a first awful IPO for a reviving tech equities market. It will all feel very familiar: over-excited investment bankers pumping air into the offering; a gullible, breathless press; cheering venture capitalists led by the teflon Kleiner Perkins; and thousands of actual users of the technology that will tee up their broker to get a piece of the "New eBay." What the world needs now is a calm, ordered, rational, smart equities market in technology -- not overpriced froth. Google at a $6 billion valuation would be great. Google with a cap north of $15 billion blows in the stench of Bubble II.

The big battle will be Google versus Microsoft versus Yahoo!. Microsoft won't have the best technology -- it never does and never will. ... Microsoft is going to persist, in its dogged way, and end up as No. 1. Yahoo! ... will play a strong No. 2 to Microsoft. Google, if it doesn't swoon over its IPO, will be in position for a long-shot challenge.

Well, heck, I've really excerpted too much of that. But I think it's good stuff and I highly recommend you register at Forrester to read the rest of it (they have lots of other free content) if you care about these kinds of things. On CNBC yesterday morning I caught the end of the interview with the guy who wrote this report (their CEO) but found the link to the report itself via Anil Dash.
- posted by Amy @ 2/27/2004 11:03:00 AM