No Love Lost For Google Its feisty founders have taken a beating lately, but we haven't even begun to see what this company can do.
By Fred Vogelstein

(FORTUNE Magazine) – The sad truth about being popular is that the public's love rarely lasts. Just ask Sergey Brin and Larry Page, the founders of Google. The pair have been business and cultural folk heroes almost from the day they opened for business six years ago. But since they told the world last spring that they would take their company public, their press clips have been so negative that they look more like con artists. Indeed, it's hard not to wonder if Google--at least temporarily--hasn't taken Microsoft's place as high tech's whipping boy.

Since the end of July, in particular, one media outlet after another has declared the range of prices for the company's now-delayed Dutch auction IPO to be exorbitant. BEFORE YOU BUY INTO THAT IPO, SEARCH "LEMMINGS," said the New York Times. JUST SAY NO TO GOOGLE IPO, said trade magazine eWeek. Worse, most hint that Google has been disingenuous in the way it has marketed the deal. Their point: The founders may write passionately in the prospectus about how the Dutch auction structure of the deal is designed to look out for the small investor, but that isn't really their motivation. It's that they want Google to get the windfall that typically goes to Wall Street and its favored investors when a company goes public. In other words, the Google IPO is nothing more than a big greedfest for Brin, Page, their employees, and their private investors, who, assuming the deal gets done, collectively stand to cash in at least $1.85 billion of stock (60% of the money raised from investors). If the IPO backlash weren't enough, even the hacker community is on the offensive, aiming the MyDoom virus at Google and other search engines in late July and slowing their response times to a crawl. "In six months, Google's gone from a company everyone wants a share of to perhaps the single most scorned entity I can recall. Right out of the chute! Amazing," wrote investor-turned-pundit James Cramer.

But if Google isn't exactly loved right now, it is increasingly feared. Why? It is changing the way the world thinks about information with a rapidity not seen since the invention of the personal computer a quarter-century ago. AOL, Yahoo, and Microsoft all fret that Google is becoming too much like a portal and will begin to draw customers away. In the auction world, eBay is worried that Google's cheap cost-per-click advertising formula will one day siphon listings off its site. Over in retail, Amazon is worried that users may one day use Froogle, Google's shopping site, for online shopping. To compete, Microsoft is spending billions to develop its own search technology for both MSN and its new operating system. Amazon now has a search engine called A9, which it has used to replace Google's search engine on its site. And Yahoo has beefed up its search and shopping sites with big acquisitions. Just think about the impact already created by Google's Gmail, a product that gives users a monster one gigabyte of e-mail storage free. It hasn't even been formally released, and competitors like Yahoo are scrambling to match it.

More frightening to competitors is that Google is just beginning to scratch the surface of what it will be able to offer. Few people realize that to run its business, Google's thousands of servers in effect function as one of the largest privately owned computers in the world. That will enable it to store and search limitless amounts of data more cheaply and efficiently than just about anyone else. The computing power is so vast that the Google brainiacs say they have only just begun to think about all the things that can be done with it. Gmail, with its bottomless archiving capability for saving and searching your mail, is just the first example. Applications to store and search photos no doubt will be next, thanks to Google's recent purchase of Picasa. And if you look at what Google is doing on its Google Labs site, it's clear that customized search according to preset preferences is not too far off. So while Google may not be loved right now, that may not be the most important thing. Just ask Microsoft.