The changing media world — and a dumb business decision

Employees take their lunch break in the sun at Google headquarters in Mountain View, Calif.
REUTERS/Erin Siegal
Employees take their lunch break in the sun at Google headquarters in Mountain View, Calif.

Google has a current market value of about $150 billion.

But barely a decade ago, Google’s founders offered to sell the young company to Excite, one of the leading Internet portals of the dot-com era, for $1 million. The CEO of Excite turned them down — thereby entering the pantheon of dumb business decisions alongside the Decca Records executive who declined to sign the Beatles.

During the same decade that saw the rise of Google, Craigslist helped kill off 70 percent of the newspaper industry’s revenue from classified ads — an exceptionally lucrative business for more than a century.

We’re living through a communications revolution the likes of which the world has never seen. It’s disrupting long-established business patterns and remaking the ways in which we engage with each other.

Some researchers, in fact, believe that the Internet is actually reshaping the way we think.

And we’re still just at the beginning of this revolution, which will continue to play out over our lifetimes and those of our children. As the examples above show, there’s no telling what tomorrow may bring. Any one of a hundred start-ups might turn out to be the next YouTube, Google or Facebook.

Right now, new applications and services are cropping up too fast to keep track. But most of them are probably doomed to obscurity. I often compare the Internet to the automobile, another invention that profoundly changed our society in ways large and small.

In the early days of the auto business — from roughly 1900 to 1930 — thousands of car companies sprung up, in places as diverse as Anderson, S.C., and Luverne, Minn. The automobile was the focus of immense entrepreneurial zeal.

But nearly all those companies eventually failed, and the business became the domain of a handful of Detroit-based manufacturers, with a few scattered outposts in places like Toledo, Ohio (Jeep), and Kenosha, Wis. (Nash, later American Motors).

Similarly, I often wonder if the key communication functions of our society will become concentrated in the hands of companies like Google, Disney, Verizon, Yahoo! and others. Right now, the leading Internet and communication companies seem to be almost unassailable, growing their market share and revenue even as other industries falter.

They’re on the verge of overturning our government’s historic support of net neutrality, which would dramatically enhance their power and wealth.

Still, if the Wild West of the Web has taught us anything, it’s that giants can rise from nowhere. Just ask the guy who thought Google wasn’t worth $1 million.

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Comments (2)

  1. Submitted by Rich Crose on 09/13/2010 - 11:58 am.

    The internet may be the most wonderful invention in the world today but in twenty-five years we could be looking back on it as the force that destroyed our society.

    It used to be that you made social connections at work or church or in a bar –face to face. You are less likely to be odd when the person across from you disagrees.

    Now, no matter how warped you are, you can find someone with your interests on-line, from the privacy of your computer screen, who will support your views and even encourage you.

    Pedophilia? Google it and find thousands who think it there is nothing wrong with it. Search for “Birther Movement” and get back 115,000 results.

    The world is splintering into millions of tiny factions, many of whom believe that they alone are right and the world would be a better place if everyone who disagrees with them is eliminated. As these factions coalesce, a peaceful society could very well disintegrate.

    If that happens, we won’t have to worry about the price of oil anymore.

  2. Submitted by John Reinan on 09/13/2010 - 04:09 pm.

    I’ve definitely given a lot of thought to the costs of the Internet, Rich.

    I’m very social and prefer to make connections with real people. I was discussing this with a friend who’s an uber-online type, and he replied, “Oh, you like to live in the meat world.”

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