Googlesoft Redux

05 Feb 2009

Some might think that there is a subtext (Microsoft is Evil! Google is becoming like Microsoft! Ergo! Google is Evil!) underlying my previous post, so let me disabuse that now: Microsoft is not Evil. Follow the reasoning from there.

However, Microsoft is Big. And Microsoft has a Lot of Money. And Microsoft is looking for New Sources of Earnings. Because Microsoft makes all of its money in One Place (well, two). Sound familiar?

When an organization gets as successful as Microsoft or Google in one market, it has lots of cash and time on its hands to play around in other markets. Ever see a cat play with a mouse? It’s fun… for the cat.

What twigged me was the Google Latitude announcement (incidentally, thanks CBC, for the scary technology story last night). Hey, mobile social networking… just like Loopt!

How did it go down? Like this?

Google: Hm, we’ve got maps on Android and iPhone, we can get location, we should use this for social networking. Hmm, Loopt is already doing that.
Google: Hey Loopt! Wanna be bought?
Loopt: Sure, that’ll be $100M.
Google: Are you insane? In this market? Try $10M.
Loopt: But our investors are already into us for $10M…
Google: Sorry, thems the breaks. We can build it ourselves for less than $10M, if you know what I mean, wink, wink, nudge, nudge, say no more, say no more.
Loopt: sob

Or maybe like this?

Googler A: Let’s build a mobile social networking site!
Googler B: And then play some beach volleyball!
Googler A: Yeah!
Loopt: sob

Really, no matter how the story goes, it ends up with the notional value of Loopt shares falling by 50-80% on the day Google Latitude is announced.

And the investors who dropped their millions into Loopt? What are they going to think the next time someone comes with a great technology idea, maybe a little ahead of its time, but a chance to build out and be ready to rock when the pieces fall into place. Maybe they’ll think: yeah, this could grow into something huge, but as soon as the market matures enough to be valuable, Google is just going to steal it anyways. Pass.