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To: Lizzie Tudor who wrote (1786)	6/8/2005 11:59:30 AM
From: Wyätt Gwyön	Respond to of 15857

you are certainly right that the market will grow--i guess we'll see how close it goes to the "sky". there are also unanswered questions about the long-term market for keyword-vertisement. as pointed out in a WSJ article some months ago (i think it was linked here). one subject which will be interesting is what kind of competition GOOG will have. how difficult is it for others to encroach on their turf? most of GOOG's profit-making technology seems to have been developed with less than $1 billion, perhaps less than $500 million, in development costs. if that billion or so can get you 80 billion in market cap, why won't competitors go after the market? we have seen Ebay is able to retain its position; perhaps it is a kind of "natural monopoly" (which is why they pulled out of Japan). but, is the search engine a natural monopoly of the same ilk? and more important: how effective will competitors be? just as an example, couldn't MSFT build a search function into its next browser? they certainly have the capital. does GOOG have sufficient IPR to protect its unique position as the search destination of choice? once upon a time, it seemed Yahoo had a great search engine, yet look what happened. personally, i always use GOOG which is built into Firefox. that might change, though, if MSFT comes out with a decent browser in Longhorn which has similar functionality. if not for me, then perhaps for the 90% of users who continue to use IE. a lot of people just rely on the search engine built into their portal, and portals are certainly a competitive space which do not seem to be a natural monopoly. i am sure GOOG will come out with their own browser/portal at some point. considering that MSFT has quite admirably taken on Netscape, and more recently Sony in the console space, with much larger capex requirements over a longer time frame, i do not think they will shrink away lightly from the GOOG challenge.