Web 2.0 In Depth

As I write this, the stock price of Google, Inc. just exceeded $500 for the first time in the company's still-brief (two-year) history as a public company. That gives the search colossus a market cap of $150 billion, many times in excess of its physical assets - currently $10.2 billion.

Whether the latest surge in value is being driven by the perception that Microsoft may be losing its golden touch, or whether it is Google's sheer Web 2.0-style inventiveness that is causing investors to pile into its stock, matters not. What matters is that the company that snapped up video-sharing site YouTube for $1.65 billion now doesn't seem quite so profligate.

So, why is a company started 8 years ago in a Silicon Valley garage by Stanford University graduate students Larry Page and Sergey Brin now worth $150 billion, when one started 24 years ago by Andy Bechtolsheim, Bill Joy, Vinod Khosla, and Scott McNealy - a.k.a. Stanford University Network - is worth just $19.5 billion?

The answer may lie in Andy Bechtolsheim. Because not only is he famous for being Sun's "employee No. 1," he is also equally famous for being the author of a $100,000 check that represented nearly one-tenth of Google's total capital when first it was founded in 1998, back when it was still running off the google.stanford.edu domain - in other words, the Stanford University website.

Although Bechtolsheim rejoined Sun in February 2004 when it acquired the privately-held company he co-founded, Kealia, based in Palo Alto, California, Sun's first disruptive innovator is uniquely independent in spirit. What he saw in Google back then, long before it became The Big G, while very different from what we see today, must have captivated him: their front end of public search and advertising algorithms, he must have realized, had unusual potential.

Just five years later, another Sun employee, Eric Schmidt, reached a similar epiphany. In a vision summarized later as "The Network Is the Computer," Schmidt wrote:

"When the network becomes as fast as the processor, the computer hollows out and spreads across the network." Under such new circumstances, Schmidt figured, profits would flow very differently:

"Not to the companies making the fastest processors or best operating systems, but to the companies with the best networks and the best search and sort algorithms."

Schmidt left Sun and, as we now know, gravitated (via a stint at Novell) toward the Chairmanship of the very company that by then was most clearly demonstrating the accuracy of his 2003 vision.

So the answer to the $150BN vs $19.5BN question above is simple: Google is still near the beginning of an Internet technology cycle that could last an entire generation, while Sun stands at the end of an i-Technology cycle that is already 24 years old.

But Bechtolsheim was once asked "So is the game over?" and I have never forgotten his reply: "Only if no one changes the game."

While the last few years may have been disappointing for people who thrive on accelerated progress in technology, the world is moving faster again. Lest I be accused of puffing air into Bubble 2.0, though - especially since this is the month when I typically poll so many minds for their i-Technology predictions - it would perhaps be as well if I were just to remind readers of technology visionary Geogre Gilder's chastening words:

"Amid the beckoning fantasies of futurism, the purpose of whatever comes next - like that of today's petapede - will be to serve the ultimate, and still the only general-purpose, petascale computer: the human brain."

Google figured that out first. Web search assists us in thinking, writing, and doing. Nothing more, but nothing less.

Even with the best will in the world, I'm forced to wonder if mere Java can ever match that?