Thursday, August 25, 2005

Google's growth stifles rivals, say firms
By Akin Oluwamuyiwa, (with agency reports)

GOOGLE, the phenomenally successful search-engine has apparently notched up its way to displace Microsoft in Silicon Valley. But it has also allegedly taken over the notorious garb of Microsoft.

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On the trail of Google's success has been the allegation that it is unfairly treating its competitors, keen on throttling them.

As part of its rapid growth, Google is set to take on online voice and instant messaging service providers such as Skype, Microsoft and Yahoo.

The firm yesterday released a free service called Google Talk, which enables e-mail account holders to talk to each other via a PC, microphone and speakers.

Many in Silicon Valley are skittish about its size and power. They fret that the very strengths that made Google a search-engine phenomenon are distancing it from the entrepreneurial culture that produced it - and even transforming it into a threat.

A year after the company went public, those inside Google are learning the hard way what it means to be the top dog inside a culture accustomed to pulling for the underdog. And they are facing a hometown crowd that generally rebels against anything that smacks of corporate behaviour.

Nowadays, when venture capitalists, entrepreneurs and technologists gather in Silicon Valley, they often find themselves grousing about Google, complaining about everything from a hoarding of top engineers to its treatment of partners and potential partners. The word arrogant is frequently used.

The news last week that Google plans to sell an additional 14 million shares of stock, adding $4 billion to its current cash reserves of $3 billion, will only provide more reasons to gripe.

"I've definitely been picking up on the resentment," said Max Levchin, a founder of PayPal, the online payment service now owned by eBay. "They're a big company now, doing things people didn't expect them to do."

Levchin, who last year founded a multimedia company in San Francisco called Slide, said Google "still has a long wick of good will to burn off," but he added, "I'm surprised at how fast the company's reputation is changing."

It was not that long ago that Google reigned here as the upstart computer company that could do no wrong. Now some working in the technology field are starting to draw comparisons between Google and Microsoft, the company in Redmond, Wash., that Silicon Valley loves most to hate.

Bill Gates certainly sees similarities between Google and his own company. This spring, in an interview with Fortune, Mr. Gates, Microsoft's chairman, said that Google was "more like us than anyone else we have ever competed with."

Google's success has already spurred Microsoft to develop its own Internet search engine (a project code-named Underdog), but Google has legions of engineers banging away on a range of projects of its own that, if successful, could dislodge Microsoft from the pre-eminent spot it has enjoyed since the early 1980's.

Of course, Silicon Valley has had past pretenders to the throne. Netscape, which went public 10 years ago this month, and its Web browser, Navigator, were supposed to fell Microsoft - but it is Netscape that is no longer in business. And while Google is riding high, those closely following the company caution that it is hardly invincible; an inflated stock price, a desire to compete in too many sectors simultaneously or simple hubris might cause it to stumble, they say. Even Microsoft, after all, has had legal troubles.

Just as Microsoft has been seen over the years as an aggressive, deep-pocketed competitor for talent, Internet start-ups in Silicon Valley complain that virtually every time they try to recruit a well-regarded computer programmer, that person is already contemplating an offer from Google.

Google Talk will also offer instant messaging, but unlike other services such as Skype or Vonage it will not let users make calls to landlines or mobile phones.

Google Talk system unites net telephony with an instant messaging network and builds on the Gmail e-mail service that was released in March 2004. Google Talk is not a telephony service and cannot be used for emergency calls. Google Talk enables one to call or send instant messages to friends for free-anytime, anywhere in the world.

Google Talk offers the following:

• Choice: Get in touch how and when you want to-over email, IM or a call;

• Quality: Talk through the computer but hear your friends as if they were in the same room;

• Convenience: Your Gmail contacts are pre-loaded into Google Talk so inviting or talking to your friends is just a click away;

  Google Talk is in beta and requires a Gmail username and password.

  By downloading, which takes about three minutes on a modem (900K), a potential customer agrees to the terms of service and privacy.