A Look Back At The Worries That Google Would Never Make Money
from the oh-look-at-that... dept
This is retrospective thinking. It looks back on things and pretends that it was obvious how Google and Craigslist would make money. It was not.
Craigslist was mainly a hobby for Craig Newmark for a while -- and every part of it was "free." It was only later that a business model was developed. And the situation was even more crazy with Google. I have admitted in the past that I never thought Google could make enough money to survive -- and it was something I was very, very wrong about. But, at least I wasn't alone. Howard Lindzon points us to an article from 2000 in Business Week fretting about Google's ability to come up with a real business model. Business Week wasn't the only one. I remembered a similar article in Wired, and just dug it up. It ran in October of 2001, and pointed to the huge dilemma Google had in proving to its VC backers that it was a good investment. Some quotes from both articles:
But how will Google ever make money? There's the rub. The company's adamant refusal to use banner or other graphical ads eliminates what is the most lucrative income stream for rival search engines. Although Google does have other revenue sources, such as licensing and text-based advertisements, the privately held company's business remains limited compared with its competitors'. -- Business WeekThis doesn't mean, of course, that sites like Twitter and Facebook will definitely find business models. But, it should give you pause before assuming that they can't. Business models often seem obvious in retrospect, but at the time, it's not clear at all. I wouldn't put it past the team at Twitter to come up with something that works (I'm a bit less sure of the team at Facebook... but we'll see).
The dilemma? Behind the anti-corporate facade, Google is in fact a company - even worse, a venture-backed company - and these days that means it must find a route to profitability fast or risk failure. Given that its far more commercial competitors, from AltaVista to Ask Jeeves, have been unable to come close to positive territory (the one moneymaker, Yahoo!, started as a directory), Google's prospects might seem bleak. -- Wired