Everyday billions of people go their computers and begin a search, many of them use Google because it is fast, it has a clean front page and it was institutionalized by many teachers. Let start with google, although there are other search engines in the marketplace. Have you ever wondered how Google became the search engine that it is? A book called The Search – How Google and its rivals rewrote the Rules of Business and Transformed our Culture by John Battelle, published by Portfolio Books, NY, 2005 will give you understanding of how we go to where we are.

When the internet was invented it was for a free flow of information, naturally some of it was about work then hobbies and normal life gets added in. As the internet grew to more users, there was a desire to rank information. What information is more important? what information is relevant to the user? In the example of Google – the founders Larry Page and Sergey Brin designed a search engine which was better than most. However, designing a better mouse trap does not mean selling a better mouse trap. In all businesses, revenues are needed to ensure the company meets its bills and grows, sometimes it is better to sell out to a bigger company. In every business the cost to acquire a new customer is sizable which is why many companies are very specialized. However for companies which appeal to the general public, there is advertising and sponsorship which put the company in the public’s eye. In the advertising world, it is often said advertising is wonderful, except for you never know which part of the dollar was good and which part was crap. The internet helped solved this problem, if someone searches for a product or service, they are likely interested in buying it. That is worth more money than blanket advertising.

In the beginning years, Google was more interested in designing a better search engine and combatting the spam which can and did push up spam (junk mail ads). The trick is traffic could be had for pennies, but if you charged higher prices for clicks on advertising and ad words, you would make a lot of money because advertisers would pay more than pennies for the right traffic or traffic which buys goods and services. The founders of Google came up and would continue to come up with a search engine for information better than the competition. It was not without its problems for Google tweaks its algorithm which is the basis for search every once in a while to Try to Do No Evil as well as to battle the junk mail companies. The junk mail companies pay some bills but no one wants the mail all the time.

Linking to dividend paying stocks, with Google and other companies designing a better mousetrap was the first stage of the company; if things had happened differently it might have been a small company or bought by someone else. Google had the right solution it terms of search and with the addition of advertising, made it work. Now they are the dominant position in what they do and it would seem there is less risk in the company. This is why a recent study indicated only 4% of the companies drive the stock exchange indexes, it is just difficult to pick the 4 companies.

There are more questions than answers, till the next time – to raising questions.