It seems appropriate to start the “50 Content Companies That Matter” list with Google.
If I had posted this a year ago, many would probably question whether Google even belongs on the list. They hardly create any proprietary content. They don’t even house other people’s content in their databases or servers. In essence, all they do is provide links. Yet, Google is probably impacting business models of more content providers than any other company today.
This past week, Google raised a lot of eyebrows when it announced its intention to raise an additional $4 billion in the equity markets. Of course, being Google, it’s decided to based the number of shares in its secondary offering on the first 8 digits after the decimal point in Pi. Good to see that engineers can have a sense of humor even at the $4 billion level. Most Street assumptions are that Google is looking to build up its war chest for potential acquisitions into China, Russia and elsewhere. It probably won’t be a single $4B deal, but rather they will look for deals between $500M - $1.5B. The transaction could also bode well for computer hardware and telecom manufacturers, as Google will have plenty of cash to upgrade servers, switches and the like.
Regardless of how (or whether) Google spends its $4 billion, they are certainly among the most influential players in the content space. AdWords is at the heart of almost every company’s advertising campaigns, and the AdSense ad network program has enabled content providers to capture advertising revenues without hiring sales reps. The existence of Google has forced advertising-supported publishers like Thomas Register to completely overhaul their business models.
Perhaps most interestingly, Google has become a dominant content player by ignoring all the “rules” of the content markets. They haven’t reached out in a meaningful way to partner with publishers (in fact, they’ve alienated quite a few through the Google Print initiative) and their “standard” model does not provide the flexibility content buyers and sellers have come to expect. Yet Google is set to capture more eyeballs and more of the desktop through its Google Maps, GMail, Desktop Search, Google Video and new advertising programs. With version 2 of the Google Desktop, Google has begun inching its way into Microsoft's territory, going beyond Search to include file access (and thereby skip the Windows Start menu).
It’s clear that Google is impacting the content market in a big way and will continue to do so into the foreseeable future. While they remain difficult to deal with, any publisher who ignores Google will do so at their peril.