Google likely trillion dollar company … Google has the potential to hit a trillion-dollar market cap in the next 10 years, according to one technology investing leader. Jim Breyer, founder and CEO at Breyer Capital and a partner in Accel Partners, expects the search engine giant to join Facebook in gobbling up smaller companies and continuing to grow rapidly. "The environment we're in now is probably the most interesting seismic change relative to the new companies that will be Internet leaders," Breyer said Wednesday at the Delivering Alpha conference presented by CNBC and Institutional Investor. – CNBC
Dominant Social Theme: Such fabulous companies very much deserve their success.
Free-Market Analysis: Nope. We are past believing in such fantasies as a trillion dollar company. These will not be companies but titanic mercantilist organizations.
Of course, for smaller, nimbler companies, such vastness is a good thing. As stock markets climb and trillions slosh around the global economy, entrepreneurial start-ups will continue to receive top dollar. Much of that cash may go to smaller tech companies, but start-ups in other industries (marijuana comes to mind) may also benefit.
One thing is for certain: We will be subject to endless media profiles of the new Kings of Industry – those that have ended up at the top of a trillion-dollar enterprise.
The rise of the first trillion-dollar companies was one of a handful of big ideas entertained during a tech-focused panel that also featured Shana Fisher of High Line Venture Partners. Fisher was an early partner in video-sharing site Vine. She said companies that can make it easier to make videos will do well.
"The technology limitations just dealing with getting something from your phone to the server is still a difficult hurdle," Fisher said. "The sky's the limit for video."
Breyer also predicted big things for digital currencies. He said the leader in the field may not end up being bitcoin, which is the most prominent name now but has faced price volatility, theft and scandal over the past year. Other providers will emerge.
"I have zero doubt in the next five to seven years that we will see at least half a dozen multibillion dollar digital currency companies," he said.
Bear in mind these "multibillion dollar digital currency companies" – if they come to fruition – will be tiny compared to the trillion-dollar behemoths that are also being contemplated.
The scale of these companies is almost too large to comprehend. And yet we are supposed to believe that they have emerged as a result of the competitive marketplace: They are simply a capitalist evolution writ large.
Not so fast. Let's just focus on Google itself. A 2011 post at RoyalPingdom.com estimates that Google's user base is over a billion – and perhaps as large as 1.5 billion. The only thing holding Google back is its lack of penetration in China.
But a terrific, recent post at Pando.com provides us with insights into the real Google and its historical roots. Like Facebook, the company aggregates enormous amounts of data and places it at the disposal of the alphabet soup of US government surveillance agencies.
This is ironic given that Google executives are painstaking about the company's anti-surveillance stance. Here's an excerpt from the Pando article:
The company funds privacy think tanks, opposes secret wiretaps and has been very critical of government surveillance in the wake of Edward Snowden's NSA leaks. Google chairman Eric Schmidt personally registered a complaint about government spying with President Barack Obama, and the company joined a forward-thinking Silicon Valley organization ostensibly dedicated to promoting government surveillance reform in the name of "free expression and privacy."
Google's big principled stance against surveillance is honorable — or it would be, if the company wasn't so deeply involved in the very thing that it claims to be against … Google makes its billions by spying on people for profit: it funnels as much of our online and digital activities through its own networks and compiles detailed dossiers on hundreds of millions of Internet users all over the globe.
But what few people realize is that Google has also been using its wares to enhance and enrich the surveillance operations of the biggest and most powerful intelligence and DoD agencies in the world: NSA, FBI, CIA, DEA and NGA — the whole alphabet soup.
And we're not just talking about giving spies access to Gmail, Google Drive or Google search. Google offers these agencies a whole range of customized services to organize and integrate their vast and disparate intelligence streams. Some of Google's partnerships with the intelligence community are so close and cooperative, and have been going on for so long, that it's not easy to discern where Google Inc ends and government spook operations begin.
The article tells us that Google's ties to the military-industrial complex go all the way back to the 1990s when Google's founders, Sergey Brin and Larry Page, "were still run of the mill computer science PhD students at Stanford."
Not surprisingly, we learn that their work involving web search and indexing was partially funded by the Pentagon's DARPA. "The two nerdy inventors even gave the DoD's research arm a shout out in a 1998 paper that outlined Google's search and indexing methodology."
Brin and Page continued with their research but left Stanford to pursue it privately. No doubt they were encouraged to do so by their DARPA backers, though as is often the case, the details of this transition are not easily accessible. The next public disclosure of Brin and Page's expanding customer base involves "a $2.07-million gig to outfit the National Security Agency (NSA) with Google's search tech."
"The NSA paid Google for a search appliance capable of searching 15 million documents in twenty-four languages," according to Consumer Watchdog, which obtained contract documents outlining the NSA-Google partnership. The contract was to last only a year and apparently was never renewed by the NSA, nonetheless Google kept providing its search services for two full years — free of charge.
At exactly the same time that Google was trying to improve the NSA's internal search capabilities, the company was in negotiations with two other intelligence agencies: the Central Intelligence Agency and the National Geospatial-Intelligence Agency (NGA), a close cousin of the NSA that primarily deals with geospatial/satellite intel for both combat and civilian operations.
These negotiations had to do with Google's purchase of Keyhole, a tiny tech startup that developed 3-D mapping technology. The company's main product was an application called EarthViewer, which allowed users to fly and move around a virtual globe as if they were in a video game. Google purchased Keyhole in 2004 for an undisclosed sum, and folded its technology into what later became known as Google Earth.
Just like Facebook and other vast tech firms, Google's advance was steered by the US military-industrial complex and funded by it. What is also clear is that these ties were obscured by mainstream media reporting that presented Google as a product of capitalist enterprise when its evolution was otherwise.
Google is just one example of how big business is inextricably entangled with government power and military force. The operative term is "mercantilism" – in which an enterprise receives an unfair advantage through statist privilege. At every stage, Google has benefited from government resources, both legislative and pecuniary.
A great deal has to do with various kinds of immunity, beginning with corporate personhood. Google officials have also received immunity from lawsuits aimed at its posting of potentially libelous material via the US Communications Decency Act.
This is how US industry works these days – and has for at least the past 100 to 150 years. Google not only benefits from corporate personhood; it also receives support from the US's Federal Reserve system. As waves of monopoly fiat paper issue out into the economy, Google receives inordinate benefits because it is already so large.
Google and its fellow titans will likely become some of the first trillion-dollar corporations. They will be hailed as triumphs of entrepreneurship but they are no such thing – only links in a mercantilist chain. Such companies are surely to be valued for their unique apex positions as much or more than for their technological advances.
Capitalist enterprise at the higher reaches of Western industry seems to be something of a myth. Of course, we have the Internet to thank for this insight …