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Summary:

Google’s problems aren’t just a result of its huge size — its global ambitions and the impact it has on so many aspects of our lives has given it a whole new class of problems. In many ways, the company might as well be a nation-state.

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It’s no secret that Google isn’t the plucky young startup it was just a few years ago; it’s a colossus now, with more than $20 billion in annual revenues, over 21,000 employees, and business operations that reach into hundreds of countries. But Google’s problems go far beyond those that stem just from being a large company. The combination of its size, its far-reaching ambitions and global expansion, and its impact on so many aspects of our lives has given it a whole new class of problems. In many ways, Google might as well be a nation-state, and it continues to struggle with all the issues that come along with that status.

The latest is net neutrality — an issue some have called “the third rail” of communications policy, because it is so polarizing and contentious. Not that long ago, Google made emphatic pronouncements about the need for open networks, and the freedom for Internet users to do as they wished without having to bow to corporate demands. It was just the kind of thing a plucky startup would say. But now, Google has chosen to take the same kind of tack that other large corporations have: namely, diplomacy and carving out a deal, however lopsided or contentious it might be. After all, vision and a sense of wide-eyed optimism is great, but business is business. Even Facebook — which is growing increasingly large and suffering its own share of large-company problems — isn’t siding with the web giant.

In some ways, Google is like a group of young rebels who’ve spent years in the wilderness attacking the established leadership, only to suddenly find themselves in power and confronted by all the necessities of government — the need to cut deals, make concessions, scale back promises, and so on. In other words, the need to be realistic and pragmatic, and to look after the bottom line. Slogans like “don’t be evil” are so much easier to rally around when you are a group of young rebels, and so much harder to live up to when you become the establishment.

Net neutrality is just one of the thorns in Google’s side as it grows ever larger, and becomes (at least to some) an even more intrusive presence in our lives. Instead of focusing on battling with SEO spammers and poor search results or fighting to reduce page-load times, the company now finds itself fighting with entire countries: In the latest episode, South Korean police raided Google’s offices there over Street View-related privacy issues, something that’s led to potential criminal charges in Germany and a multi-state investigation in the U.S. Meanwhile, Italy convicted several key Google staffers in another privacy-related case. These are not the problems faced by a normal technology company.

One of the biggest clashes Google has faced recently as a nation-state is with China, over the search company’s ongoing attempts to balance its corporate needs with its desire to avoid surrendering to China’s demands that it filter search results. The need for that balancing act stems in part from the company’s “don’t be evil” approach (another company might just accede to China’s demands and move on, as Microsoft and Yahoo have), but it’s put Google in the same kind of position a nation might find itself in: sending envoys to negotiate with the government, trying to curry favor with other countries to build support for its position, and so on.

Although the feuds and potential criminal charges in various countries get headlines, perhaps nothing symbolizes the painful growing up Google has had to do more than the furor over wireless information collected by the company’s Street View cars. Here’s a service Google provides at considerable expense, by driving cars around over millions of miles of countryside in dozens of countries — presumably because it sees those photos as valuable for users, who (as with almost all of Google’s services) get the service for free. And what happens? Dozens of countries accuse the company of doing all kinds of nefarious things, take it to court, call on regulators to investigate, and so on.

If a small company had done the same — even Google itself, in an earlier incarnation — it might have been chalked up to inexperience, to naivete, to youthful exuberance. But Google can no longer rely on the good wishes of users and other companies, who might have cheered it on when it was smaller and less invasive. Now, its every move is suspect, and its motivations are invariably seen as self-interested, if not outright sinister. There is no more benefit of the doubt. By necessity, that’s going to continue to change the way the company behaves — whether it changes for the better remains to be seen.

Related content from GigaOM Pro (sub req’d): Google Fighting on Two Fronts — China and Privacy

Post and thumbnail photos courtesy of Flickr user Stu Spivack

  1. Nation State? Seriously? In the Forbes top 500 companies they rank 355. Their tiny $23 billion revenue is dwarfed by Walmart’s $408 billion, Shell’s $285 billion. And 21,000 employees? Walmart has 100 times as many.

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    1. Thanks for the comment, Rupert — it’s not just about size though, as I tried to argue in my post. It’s about the ways in which Google interacts with our lives, and all the things that attract regulatory or social interest, from net neutrality to privacy to the events in China. Wal-Mart is nowhere close in that sense. And even though Shell faces regulatory and government scrutiny, it isn’t on the same level either I don’t think.

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      1. You have a skewed sense of Wal-Mart’s influence, and an over-inflated sense of Google’s influence. If you don’t consider this an influence over the way we live our lives, I don’t know what will:

        Employing 1.4 million Americans – nearly 1 in every 20 people in the US.
        Their shaping of the national health care debate after all the criticism of these millions of employees being under-covered.
        Having the purchasing power and influence to get entire industries of US manufacturing outsourced (I consider that a bigger influence in China, since Google’s attempts at influence in that country have thus far failed.)
        Selling 12% of the music in the US. All censored, mind you – don’t you think that censoring is not going to shape the national culture?
        Driving local businesses out of business wherever their stores pop up.
        Influencing the debate on the availability of contraception, both from at one time not stocking it in their stores (cutting off contraceptive availability in markets without other pharmacies… which they drove out of business), and from denying medical coverage of it to those millions of employees.

        That’s much more of every day life than you give Wal-mart credit for. Google is peanuts compared to that; get your head out of the tech bubble and look around you!

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  2. Facebook and Google are true giants. 37 percent of all browsing is either done on facebook or on google sites(google.com, gmail, youtube etc) and that time is only going to increase ha ha. Though I guess facebook has a slight edge.

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  3. The number of unique visitors per month into walmart stores and number of unique visitors to Google/Facebook should be an interesting metric as well.

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  4. The biggest problem with this type of discussion: define “better”!

    How exactly would you like a company with revenues of $20Bn and market cap of $120Bn to behave? What would be considered good behavior?

    Google employees & shareholders have a different viewpoint from the general public. And yet again different from users.

    Whose view should prevail?

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    1. That’s a great question. We all want companies to act as ethically as people do, but the reality is that Google is a company with shareholders and investors — although it should be noted that Google set up a dual-class share structure specifically so that the founders could continue to control how it operated.

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  5. For better or for worse, Google has become everything it has said it did not want to become–EVIL. It is a natural progression of human nature when accumulating massive wealth and power. The founders used to be one of ‘us’. Now the founders are one of ‘them’. ‘Free’ search is no longer free. We have sold out our privacy and our identities, in plain sight, and quite happily I might add. Is this good? Depends on whom you ask.

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  6. [...] with the media, analysts and netizens decrying its capitulation. However, as my colleague Mathew noted yesterday, Google is a grown-up business now, and it may have to leave its days of rabble-rousing behind. [...]

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  7. “Employing 1.4 million Americans – nearly 1 in every 20 people in the US”

    Hmm, unless you think the USA has a total population of 28 million, your math is way off. California alone has >30 million people in it.

    This statistic is more like “nearly 1 in every 200 people”, not 1-in-20.

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  8. [...] as well as violating copyright, seems like both a Larry Ellison-style provocation against Google while it’s reeling from the network neutrality fight and leaked memos on privacy and the coming true of [...]

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  9. Very thoughtful post, Matthew, keep up the good work.

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    1. Thanks, Richard.

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