Think Again

Think Again: Google

In only eight years, the darling of the Internet world has rocketed to fame and fortune. Boasting users in every corner of the world, the popular search engine is the quintessential American success story. Yet it has begun to draw skepticism from Wall Street and the ire of human rights groups. Is Google really as kind, ubiquitous, and omnipotent as it seems?

"Google Is Truly Global"

Not really. Google is the gateway to the Internet for hundreds of millions of users worldwide. From Arabic to Zulu, the search engine can be used in more than 100 languages -- even fake ones such as Esperanto and Klingon. In the United States, Google is the unquestionable market leader. It holds a commanding lead, with an estimated 48 percent of all Internet searches in early 2006, over rival Yahoo, which is used 22 percent of the time. Google is growing more rapidly than its major U.S. competitors, and it continues to develop new technologies to attract new users. In fact, you could even say that it's on its way to becoming universal; Google Mars offers interactive maps of the Red Planet. As a brand whose name was officially listed as a verb in Webster's Dictionary earlier this year, Google has entered Americans' everyday lexicon.

But around the world, Google faces tough obstacles. In developing nations, the Web is inaccessible for all but a wealthy few. In technologically advanced countries, Google faces the emergence of government-backed rivals. The competition in Asia is especially fierce. In Japan, Yahoo leads the pack with its millions of registered e-mail users. The leading search engine in China is, which enjoys strong government support. And, though Google's popularity in China is increasing, it can't seem to gain any traction in nearby South Korea. There, the government has invested heavily in making high-speed Internet service widely available, as well as facilitated the creation of a number of domestic Web search firms that are the market leaders. Google has become so frustrated by its inability to crack the Korean consciousness that it has done the unthinkable -- spent money to promote its brand name, something the online giant has rarely had to do anywhere else.

"Google Is the Next Microsoft"

Wrong. Talking heads like to say that Google is like Microsoft 20 years ago -- a fledgling company led by young, iconoclastic engineers who aim to change the world with ubiquitous, innovative technologies. Critics of both companies think Google could eventually grow so large that, just like Microsoft, it will stomp on its competitors and strong-arm those that get in the way. As proof, they cite areas in which Mountain View has already managed to surpass Redmond. Google's search engine leads both Microsoft's and Yahoo's in its number of users. In addition, Microsoft has lost more than a dozen of its best and brightest employees (including the former head of its China operations) to Google, which has set up its own outpost near Microsoft headquarters to attract defectors who don't want to move from Seattle to Silicon Valley.

But those who fear that Google is aiming for world dominance forget one important fact: Though Google must compete against Microsoft, Microsoft never had a Microsoft to compete against. Microsoft's deep pockets -- more than $40 billion in cash -- and its continued dominance of desktop computer operating systems have already forced Google to make a number of costly decisions that are hurting its bottom line. Google recently paid $1 billion to Time Warner for a 5 percent ownership stake in AOL. That defensive maneuver was driven entirely by Time Warner's simultaneous negotiations with Microsoft, which was willing to pay big bucks to knock Google from its perch as AOL's search engine of choice.

In addition, Google fears that Bill Gates will leverage the ubiquity of his operating system by embedding MSN Search in the next version of Windows for new computers. To keep Microsoft at bay, Google is paying millions of dollars to Dell, one of the largest PC manufacturers in the world, to make Google the default search engine on its new machines. Google may be a giant, but Microsoft is still many orders of magnitude bigger.

"Google Is the Most Inventive Force in the World"

Hardly. Google Desktop, Google Talk, Google Earth. These are just a few of the new, free products that Google has rolled out in the past couple years. There's no question that the company has provided high-quality service and remained nimble and creative. But Google rarely comes up with new ideas; instead, it improves on the inventions of others. For starters, it was Yahoo that first rolled out a major directory of Internet sites in the 1990s. As the Web grew, AltaVista did the best job of any search engine by comprehensively crawling the entire Internet. Google did not invent the Internet search. Users flocked to Google because it did a superior job of ranking search results based on relevance, and returning those results in the blink of an eye.

Nor did Google create the pay-per-click advertising model that earned it more than $6 billion in Internet advertising revenue last year, roughly half of all the money spent by advertisers online in 2005. That pay-per-click model was created by a company called Overture, which was eventually acquired by Yahoo. Once again, Google improved upon what came before it. Whereas Overture sold premium placement of text ads alongside search results based on how much an advertiser was willing to pay, Google added an important twist: It ranked ads based on a combination of how much an advertiser would pay, plus the popularity of the ad as measured by the number of clicks it generated. Google is also widely credited with inventing the concept of 70-20-10 time, so energized engineers may devote 20 percent of their time to brainstorming company-related ideas, and 10 percent on anything else that interests them. But when Google founders Larry Page and Sergey Brin were mere schoolchildren, 3M was already giving its employees free time to work on outside passions, which led to the creation of Post-it Notes, among other things.

"Google Protects the Privacy of Its Users"

Yes, sort of. "In Google We Trust." That is Google's operating philosophy and culture; it must have the trust of millions of computer users and advertisers in order to thrive. Yet Google itself does not trust outsiders. Last year, a reporter for the online technology site CNET googled the company's CEO, Eric Schmidt, and wrote a story that contained personal information about him and his wife. In retaliation, Google said it would not talk to CNET or the reporter again for a year. After much adverse publicity about the hypocrisy of penalizing a news organization for using Google technology to learn and share information, the company lifted its embargo.

Google self-righteously protects its crown jewel -- its database of how Googlers search -- by claiming that it's in the best interest of its users. But in reality, Google operates in the best interest of Google. Recently, the U.S. Justice Department sought information from AOL, Microsoft, Yahoo, and Google for a child pornography investigation, asking for a week's worth of searches. The others complied, but Google put up a legal fight for several months before the Justice Department agreed in March to reduce the scope of its request. Google's motivation wasn't protecting people's privacy; it was a fear of losing its competitive edge. If Google were forced to disclose too much information about how its users search the Internet, then its competitors might be able to decipher secrets of its technology. Google will fight to protect its privacy at all costs.

"Google Is Unconventional"

Not anymore. The founders' letter written by Page and Brin states, "Google is not a conventional company. We do not intend to become one." On the surface, how could anyone conclude otherwise? After all, the Googleplex offers three free gourmet meals a day, free onsite medical care, beach volleyball, and all the toys a geek's heart could desire. There are even futuristic Japanese toilets -- replete with heated seats and push-button controls to wash and dry your backside -- that would make any champion of artificial intelligence proud. It's a graduate school campus on steroids that aims to stimulate creativity and teamwork by eliminating the distinction between work and play.

But don't confuse these artifacts of the culture with the company itself. Google, as a business, turns out to be very traditional. Just like Hewlett-Packard and dozens of other Silicon Valley companies, it was born at Stanford University. It soon moved to a nearby garage off campus and received funding from mainstream Bay Area venture capital firms. Page and Brin are a formidable duo, but so were Microsoft's Bill Gates and Paul Allen and Apple Computer's Steve Jobs and Steve Wozniak. When Page and Brin decided in 2000 to search for an outsider to become CEO, they poached Schmidt, an experienced manager from Novell. He has assembled a traditional management team to operate the business, implemented traditional mechanisms to measure the company's financial performance, and installed various safeguards against fraud and other activities. Google certainly tried to hang on to its idiosyncrasies by waiting longer than many other start-ups to offer shares to the public. But as soon as it announced its initial public offering, Google was beholden to the same rules as any other company. Like a rebellious teenager who learns to ditch her mohawk and piercings when she gets a job, Google has grown up.

"Google Is Morally Superior to Other Companies"

Perhaps. Page and Brin take Google's motto, "Don't Be Evil," very seriously. Conveniently, it is a highly effective recruiting tool that attracts those who might otherwise work for competitors such as the Evil Empire up in Redmond. Engineers see the world of technology and business differently than the rest of us mere mortals. In their view, technology can be used for good or for evil. It can free information by making the content of millions of books available online, which is good, as Google is attempting to do. Or it can be used to limit consumer choice by forcing individuals to accept a preinstalled operating system, which techno-purists see as evil.

But the world can't be so easily divided into good and evil, a lesson that Google has learned recently. When the company launched its search engine earlier this year, hoping to tap into China's vast market of 105 million Internet users, human rights watchers lambasted Google for acquiescing to Beijing's demands to omit select results on searches for politically sensitive terms, such as "democracy" or "Tiananmen Square." Google defended its decision, somewhat lamely, by saying that providing information in China -- even censored information -- could foster positive change. It's only fair, though, to note that Google seeks to lessen the damage by posting an online disclaimer for Chinese users. On every Internet page that China censors, Google posts a notice indicating that the search results are incomplete.

Whether or not Google's motivation is genuine altruism -- or, more cynically, to create positive PR -- is debatable. But, at the very least, Google is putting its money where its mouth is. Last year, the company announced a donation of 3 million shares (equal to roughly $1 billion in March 2006) to a new philanthropic arm, In February, Page and Brin hired Larry Brilliant -- a well-regarded physician who spent many years working with the World Health Organization and other public-health groups to eradicate smallpox in India, combat blindness in Africa, and fight other diseases -- to be executive director of the charitable foundation. Page and Brin have said they hope that their global philanthropic work through will someday eclipse Google itself in importance.

"Google Can’t Be Toppled"

Yes, it can. Clearly, the honeymoon is over for Google. Not only has the darling of search been subject to close government scrutiny, its finances are taking a hit, too. Amid heightened competition, Google's marketing costs are rising, its profit margins are shrinking, and its slowing rate of growth has disappointed Wall Street. The high-flying stock that once exceeded $475 per share has plunged to less than $350, a drop of more than 25 percent in less than three months. Google's absolute refusal to provide Wall Street analysts with any forward-looking financial guidance only compounds the risk, uncertainty, and volatility involved in investing in the company.

Does Google have a second act that can match its early success? Or, will its rapid expansion lead to costly mistakes? Certainly, the company has managed to spew out new products at a feverish clip. But unlike its core search engine, none of them has become a blockbuster. Google Video, Google Talk, and Gmail may be good products, but they are not yet market leaders.

There is little question that Google, a quintessential American success story with a gilt-edged brand name, will have staying power in the United States for many years to come. But as the company's tentacles extend across the world, its one-size-fits-all strategy simply won't work where different customs and laws prevail. Last year, French President Jacques Chirac announced Franco-German support for the creation of an ambitious new European search engine, called Quaero ("I seek" in Latin). The French government, which is the main financier of the project, created the Agency for Industrial Innovation with $2 billion in seed money, most of which will go to Quaero. For Google's global winning streak to continue, the search engine born and nurtured in Silicon Valley will have to do more than simply translate its whimsical home page from English into other languages. It remains to be seen how successfully Google can navigate the challenges posed by distinct cultures and foreign governments as it aggressively pursues global growth in the Internet Age.

Think Again

Think Again: Israel vs. Hezbollah

The recent war revealed neither a vulnerable Jewish state nor a Lebanese militia carrying the hopes of the Arab world. In truth, Israel could never have delivered the decisive victory its citizens expected, and Hezbollah has been left weakened and resented. The conflict was bloodier than anyone anticipated, but it just might set the stage for a new order in the Middle East.

"Israel Lost the War"

No. Israel did not decisively win the war against Hezbollah, but nor did it lose. The goal of the Israeli operation was to force Hezbollah out of southern Lebanon and to weaken the militia's capabilities considerably. In both of these objectives, Israel succeeded. Israeli air strikes destroyed 70-80 percent of Hezbollah's medium- and long-range missile arsenal, and the militia lost hundreds of its best guerrilla fighters. Hezbollah has earned the resentment and suspicion of much of the Lebanese public. Israel also sought the deployment of the Lebanese Army along its border, a move the Lebanese government had long rejected, due to Hezbollah's dominance in the south. Today, the Lebanese government has taken on this commitment, and UNIFIL, the U.N.-mandated force, is keeping the peace.

This summer's war was a battle over expectations, and the Israeli public expected too much. The cost of the conflict was higher than the Israeli public anticipated, and the benefits fewer. The war offered few tangible military achievements that could comfort the public: Hezbollah's leader Sheikh Hassan Nasrallah evaded capture or death, no white flags of surrender were flown, and Hezbollah prisoners weren't thrown into Israeli jails by the truckload. But despite the blistering criticisms of the Israel Defense Forces' (IDF) performance, Israel did achieve one of its primary objectives. The border with Lebanon is expected to be calm for the foreseeable future.

The war ultimately resembled a minor heart attack: It served as a warning that unless Israel solves its fundamental problems with its neighbors, it will be haunted by troubles on a grander scale. Observers fret that the war reveals a weakened and vulnerable Jewish state. They would do well to remember that military victories often result in historical defeats. Israel achieved a stunning military victory in 1967 with the Six Day War, and it has been cursed ever since with the irresolvable problems of occupation. Israel was handily defeated in the first phase of the 1973 Yom Kippur War, but it emerged with the outline of a peace treaty with Egypt. This war provides a similar historic opportunity. Although the conflict was not handled as well as Prime Minister Ehud Olmert promised, it was no defeat.

"Hezbollah Won the War"

Hardly. Hezbollah wears two hats: Under one, it advocates a perpetual, regional fight against Israel, encouraged and sponsored by Iran and Syria. Under the other, it is an active player in Lebanese politics, representing the Shiite community in government. Nasrallah did an impressive job balancing these roles. He rallied the Arab street to his cause, while insisting that he had nothing but the security of Lebanon at heart.

But the war revealed his weaknesses. It devastated his primary constituency, the Shiite community of Lebanon. More than 700,000 Lebanese, many of them Shiites, were displaced, and the economy of the south is in shambles. He lost hundreds of fighters and much of his Iranian-provided arsenal of arms. Nasrallah's popularity rose across the Middle East, but he lost ground in Lebanon.

The real challenge Nasrallah faces now is to retain his veto power in Lebanese politics. Hezbollah is making amends with the Lebanese people by distributing tens of millions of dollars provided by Iran. But, despite leading reconstruction efforts, Hezbollah is under attack in Lebanon and around the region. Many Lebanese, including influential Shiites, are furious with the organization for provoking Israel and setting back the country's hard-won rebuilding efforts for decades. Arabs across the Middle East are increasingly wary of a militia that takes orders from Tehran.

Nasrallah can no longer pretend that he is the great defender of Lebanon. He managed to score a propaganda coup this summer, but he leads a broken and battered force. He has, in effect, been neutralized. To remain a political player, he must lead the rehabilitation effort, distance himself from the mullahs in Iran, and deepen his relationship with Hamas.

"The Israeli Response Was Disproportionate"

No. Israel is guilty of overreacting to the July 12 kidnapping of two IDF soldiers by Hezbollah guerrillas, an act of war for which Israel has historically shown little patience. But, given the opportunity and supported by the United States, Israel's goal became disabling Hezbollah. It accomplished this objective to an impressive degree and, despite many reports in the international press, often with surgical precision.

Reports of Israel's damage to infrastructure in Lebanon have been grossly exaggerated. During the war, 9,300 Israeli air strikes hit about 5,000 targets inside Lebanon. It sounds excessive. But the vast majority of strikes targeted -- and hit -- Hezbollah compounds in Beirut's southern suburbs or Hezbollah strongholds that were being used to launch missile attacks in the Shia south. The Israeli Air Force disabled the runway of Beirut's airport (but not the newly refurbished terminal building) and several bridges in order to prevent the flow of arms and ammunition. Haifa, Israel’s third-largest city, was paralyzed for weeks by daily barrages of Hezbollah rockets, while much of Beirut continued with normal life.

But judging from most media coverage, Lebanon appeared to be destroyed. One burning oil tank on television looks like 50 when played on loop, and a few destroyed bridges hardly presage the demolition of the entire country’s transportation grid. Of course, the loss of civilian life was regrettable. More than 1,300 Lebanese were killed during the hostilities, many of them innocent civilians caught in the crossfire. But the majority were Hezbollah fighters. Compared to the weekly casualty rolls from Iraq, to cite one terrible example, it is a relatively small number.

That did not prevent Israel's critics from accusing it of some of the worst abuses of war. Amnesty International declared Israel guilty of war crimes for "indiscriminate attacks" against civilians. U.N. Secretary-General Kofi Annan suggested Israel deliberately targeted a U.N. observation post in southern Lebanon. In a speech to the New America Foundation in Washington, former U.S. National Security Advisor Zbigniew Brzezinski compared the Israeli actions in Lebanon to the killing of hostages.

These accusations mask a major dilemma that many critics chose to ignore. How can a country under attack from a terrorist organization based in another country defend itself and its citizens? Hezbollah was not only launching military operations from Lebanon’s soil, it was -- and still is -- a member of the Lebanese government and parliament. It operated from apartment buildings in Beirut and villages in the Shia south, often disappearing into the civilian population and hiding behind human shields. Under these circumstances, who is the hostage, and who is the killer?

"The War's Outcome Was a Blow to Bush"

Wrong. For U.S. President George W. Bush, the conflict was win-win. If Israel had won the war decisively, he could have argued that it was another victory in the global war on terrorism. If the war ended indecisively, as it ultimately did, Bush could have used the conflict to rally allies to the threat Iran poses for the region. Eventually he chose both, portraying the war's outcome as an unalloyed Israeli victory and using Hezbollah’s brazen methods as further cause to stop Iran from becoming a nuclear state.

Throughout the conflict, and despite appearances, the Bush administration was torn between two allies: Israel, and the Lebanese government led by Prime Minister Fouad Siniora. Lebanon's burgeoning democracy and the evacuation of Syrian forces from the country in early 2005 was considered a great success in Washington, one of the few positive achievements of the administration's Middle East policies. But Hezbollah was always a thorn. Washington's basic strategy during the conflict was to allow Israel the chance to hit Hezbollah effectively and, at the same time, avoid any fatal damage to the Siniora government.

The strategy worked. Siniora has emerged from the war a stronger, more effective, and popular politician. The U.N. Security Council’s resolution has provided him with the political cover to assert his authority. It appears the damage to Lebanon was, from an American point of view, regrettable but nonetheless worth the cost.

"Iran and Syria Are Stronger Than Ever"

Yes, but only for now. Iran is unquestionably the great regional winner of the past several years. Its worst enemy, Saddam Hussein, was ousted in Iraq, leaving the United States trapped in a political and economic dead end there. Oil prices have soared. Hezbollah and Hamas have won electoral victories. And the rest of the world shows more reluctance than determination to prevent Iran’s nuclear ambitions.

The Lebanon war was a PR victory for Iran, but it ultimately leaves the Islamic Republic vulnerable. Iran loudly praised Hezbollah's fighters, but it never came to the aid of its brothers-in-arms when it was needed most. Iran’s oil dollars are now helping Hezbollah make amends with the Lebanese, but governments throughout the region are looking warily at Tehran and attempting to counter its influence. According to Israeli government sources, the governments of Saudi Arabia, Egypt, and Jordan secretly encouraged Israel to confront Hezbollah. Some Israeli officials also claim that Iran planned to use the threat of Hezbollah's arsenal to deter Israel from launching attacks on Iran’s nuclear installations. That threat has now been largely neutralized, and the installations left exposed. The world has seen how irresponsible and dangerous Iran's behavior -- and the behavior of the militias on its payroll -- can be, and it will be unlikely to risk an encore.

Syria, for its part, emerged from the war pleased that Lebanon had found a new regional enemy and scapegoat, having been kicked out of Lebanon in disgrace only a year earlier. But Syria's complicity with Hezbollah -- it allowed rockets from Iran to be smuggled through the country -- put it in the cross hairs of Jerusalem and Washington.

Then, in the weeks after the cease-fire, several Israeli cabinet ministers, among them Defense Minister Amir Peretz and Internal Security Minister Avi Dichter, expressed a willingness to negotiate with Syria over the future of the Golan Heights, a Syrian territory occupied by Israel since 1967. The potential reversal of this policy, no doubt with the tacit support of the United States, is an invitation to Syria to change its behavior and perhaps remove itself from America's list of rogue regimes. But, as always, there is no free lunch. Either Syria must turn away from its current patron, Iran, and emerge as a legitimate power in the region, or it may find itself the first battlefield in the war to contain the Islamic Republic.

"Israeli Generals Make Better Leaders"

No. Since its establishment in 1948, Israel has fought seven wars and battled two Palestinian intifadas. A major problem in most of these wars was not a lack of intelligence on the enemy, but a failure to appreciate the shortcomings of Israel's own forces. Civilian leaders who don't have experience in the military cannot differentiate between an impressive slide-show presentation and a strategy that will succeed. Here, and only here, former generals who later went into politics, like Yitzhak Rabin and Ariel Sharon, were better equipped than their civilian colleagues. They insisted on checking and rechecking every detail of an operation and often canceled missions they deemed reckless or vulnerable to failure.

But Israel is not always at war. It needs leaders who understand backroom politics more than the battlefield, and who can approach neighbors not as veterans of bitter battles, but as potential negotiators. Too many times, former generals have failed in the complex field of Israeli politics. Gen. Ehud Barak, elected prime minister in a landslide in 1999, suffered a humiliating loss less than two years later. Gen. Amram Mitzna looked set to lead the Labor Party to victory in 2002. He was handily defeated and had to leave politics altogether.

This summer's war was not executed well, but it is impossible to say whether a leader with more military experience could have done any better. All of the major military decisions during the recent war with Lebanon were made by three men. The first two, Olmert and Peretz, are both professional politicians who have never marched soldiers into battle. That inexperience led them to rely too much on the advice of their generals. The other figure, Army Chief of Staff Dan Halutz, is an Israeli Air Force general who has little experience in full-scale war. His influence led the government to have too much faith in the effectiveness of an extended air campaign. A skeptical voice was needed to question the war plans. None of them could provide it.

But Olmert and perhaps even Peretz stand a chance of surviving the domestic political fallout of the war because they are seasoned veterans of Israeli politics. The popularity of generals as politicians wanes with the slightest evidence of military disappointment. Halutz, at least until the war, was portrayed by some in the press as the future prime minister of Israel. Today, he would find it hard to get elected to his building’s tenant committee.

"Israel Will One Day Defeat Hezbollah"

Unlikely. Israel cannot afford to fight guerrilla wars in the future. It is not simply that the IDF, despite possessing some of the best counterinsurgency strategists in the world, is not designed to fight a guerrilla army. The recent conflict has revealed the Israeli public's intolerance for even the appearance of failure. When the funerals of the war dead were broadcast on television and the doubts of the cabinet leaked to the press, Israeli public opinion turned against the war -- fast. The public wants only a rapid victory with few body bags and minimal collateral damage.

A democratic government cannot effectively fight a guerrilla army if it harbors these expectations. Neither Israel nor Hezbollah is eager to return to fighting. Hezbollah has suffered a crippling blow and can ill afford to ask the people of southern Lebanon to suffer another season of destruction and displacement. Israel, too, is mired in a period of domestic mudslinging over the conduct of the war. It is eager for the international community to hold the peace along its border so that it can focus more directly on what it considers the real threat to its survival: Iran.

Only by engaging Iran -- either diplomatically or, if necessary, militarily -- and tantalizing Syria with recognition as a legitimate power can Israel hope to defeat Hezbollah. Deprived of its state sponsors, Hezbollah cannot survive. That has long been understood in Jerusalem. These threats, particularly those emanating from Tehran, are too big for Israel to bear alone. Confronting Iran will not be an easy task, and there is growing doubt that others will volunteer to do the job. But time is running out, and the stability of the region depends upon it.