Google's Technology Not Reflected in Current Google Valuations

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Stephen E. Arnold asserts … Google's technical infrastructure supports "big plays" in telco, publishing, rich media, and enterprise applications.

Stephen E. Arnold, world-renowned online systems expert, revealed that Google's technology assets are undervalued. In a conference call to analysts on September 20, 2007, he said, "Google poised to make 'big plays' that could help the company reach $100 billion in revenue. Most companies neither understand Google's capabilities nor grasp the significance of the nine-year-old company's technology."

He added, "Google is a company built on mathematics, not applied engineering. Google has superb engineers, but it has better mathematicians than any of its competitors. Math makes a crucial difference in how Google operates and how it delivers certain services better, faster, and more economically than its competitors at this time."

In a limited access conference call organized by Bear Stearns (New York City), Stephen E. Arnold described the open source intelligence techniques he used to identify Google's little-known technology strengths.

Public documents, engineering papers, and technical briefings by Googlers contain a gold mine of information. Few analysts take time to dig through Google's more than 200 patent applications, its voluminous engineering documents, or its dozens of technical presentations.

"My team of seven analysts did work through as much open source information that we could obtain. We then applied text analysis techniques to help us identify what we call 'Google's undervalued technical assets.'"

He continued, "These 'as-is' technical assets make it quite easy for Google to launch disruptive products and services in publishing, ecommerce, back-office services to organizations, and Internet Protocol-based telecommunications services, among others."

He said, "Google is perceived as a Web search and advertising company. This is the conventional wisdom, and it is too narrow. Search and advertising lubricate Google's business model. The technical infrastructure and Google-proprietary technology revealed in patent applications gives it a significant advantage in today's marketplace."

The format of the session included remarks by Mr. Arnold, followed by questions from Robert Peck, Managing Director, Bear Stearns, and analyst authorized to query Stephen E. Arnold directly.

The occasion of the analysts' call is the imminent publication of Stephen E. Arnold's second analysis of Google. The new 266-page study--Google Version 2.0: The Calculating Predator--becomes available worldwide as an electronic book on October 3, 2007, from Infonortics, Ltd., a specialist publisher based near Oxford, England. ( The study is priced at $640 US for a single copy. A site license is available for organizations requiring multiple instances of the analysis.

This study is the first analysis of Google's more than 200 patent applications. The study contains analyses of more than 36 inventions ranging from game interfaces for online advertising campaign management to the mechanics of Google's Bigtable database designed to overcome the limitations of databases now available from IBM, Microsoft, and Oracle.

"The title," said Stephen E. Arnold, "refers to Google's emergence as a powerhouse in new business sectors such as content acquisition and dissemination, enterprise applications, and programming via Google Gears' technology. Google is no longer a search company. The word calculating refers to Google's solid mathematical underpinnings. Unlike its competitors, Google does math first, then builds solutions. The word predator describes the approach taken by Google's management team to 'watch and wait' for business opportunities. This approach is different from the aggressive marketing and in-your-face sales practices used by many companies today."

About Stephen E. Arnold
Arnold ( has spent more than 30 years in accessing and developing online technologies, as is the author of seven books about information technology. He is the author of more than 60 journal articles. For the last four years, he has been tracking and monitoring Google's technical innovations and monitoring the enterprise search technology of more than 50 companies competing in this market sector. He is the original author of The Enterprise Search Report, a 660-page encyclopedia of search technology, currently in its third edition from and his latest study Google Version 2.0: The Calculating Predator and its predecessor, The Google Legacy from Infonortics Ltd ( This Google monograph was the first report to document Google's technology infrastructure and tie it to the company's ability to generate new products and outmaneuver its competitors. He funds the Evvie, an annual award for excellence in search technology. This award is presented each year at the Boston Search Engine Meeting, organized by Infonortics Ltd.

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