Google Is the Microsoft of the Internet
NEW YORK (TheStreet) -- Most people who invest in Google(GOOG) consider it a technology leader.
It's not. Google is a follower.
- Google didn't invent search. Yahoo!(YHOO) was the first success in this area. Yahoo! was also the first big backer of the "big data" program Hadoop, and of cloud technology in general.
- Google didn't create the first recognizable smartphone to enjoy big success or the first big-selling tablet. Apple(AAPL) did.
- Google didn't create the idea of a tablet integrating shopping with content. Amazon.com(AMZN) did.
What Google has done, in all these cases, was to focus on process and doing things better for less, and becoming the value leader.
Google is the Microsoft(MSFT) of the Internet Age, and Larry Page is its Bill Gates.
There are many investors and analysts who don't understand that first-mover advantage isn't the key to technology success and never has been.
- IBM(IBM) didn't create the first computer. Univac did.
- The Apple II was the first PC with today's familiar design of a TV for output, a typewriter for input and magnetic storage.
- The first open PC operating system was called CP/M, from a company called Digital Research.
- Apple put the first graphical user interface into the mass market with the Macintosh, years before Microsoft Windows existed.
- A company called Ashton-Tate had first-mover advantage in the database arena before Oracle(ORCL) overtook it.
- Facebook(FB) wasn't the first big social network. MySpace was the first-mover there.
The history of technology shows it's second-mover advantage that takes the day. The second-mover sees what the first-mover did and overtakes it through scale and focus. The second-mover lets the first-mover take the glory. The second-mover takes the market.
Google's innovations in cloud technology were all aimed at overcoming Yahoo!'s first-mover advantage. Its PageRank system was designed to do Yahoo!'s search function better. Google bought its own dark fiber to reduce its costs for search. It built server farms based on commodity hardware, knowing virtual systems cost less. It also innovated in energy, opening windows and reusing waste heat, in order to lower its costs.