Ross Greenwood speaks with Alex Pollak, the CEO of Loftus Peak, about the 19th birthday of the media giant.
Google celebrates 19 Years
Ross Greenwood: Welcome back to Money News right around the country. As we said, the Australian needs 86 runs to win a test match in Bangladesh. Also, around the place, we can tell you that the football in Adelaide between the Adelaide Crows and also the Greater Western Sydney Giants will start in approximately 15 minutes time. When I do all that, I could just jump on Google and can find that, can’t I?
It has made us so much more efficient, so much more knowledgeable. The sharing of knowledge, in particular, has transformed our economy. For good and bad, there is no doubt. Google now is a giant advertising vacuum cleaner. Basically, because of the analytics, it knows where you’re searching, what you’re hunting for. It knows your personal habits. It knows even where you’re going to. From that point of view, it is one of the most pervasive forces of nature in terms of studying people’s behavior and habits anywhere around the world.
It turns 19 years old this week. The interesting part about Google if you think about it is just so simple. It is breathtakingly simple. That is the genius behind Google. It’s obviously propelled itself to be now one of the largest companies in the world. Alex Pollak from Loftus Peak, the funds manager that specializes in technology investments here and around the world, is on the line right now.
As always, Alex, great to have a chat.
Interview with Alex Pollak, CEO Loftus Peak
Alex Pollak: Thanks, Ross.
Ross Greenwood: Google, as I say, is really breathtakingly simple. Everybody understands how to use it. You can give it to a child. As soon as they could type some words, they can actually get on the Google. You can get an 80-year-old. They will understand how to use it. That is the breathtaking part of it, but it is a massive business behind it.
Alex Pollak: It’s the biggest mail service in the world. It’s the biggest browser through Chrome, the biggest video platform through YouTube, the biggest ad network. You said it. It’s the biggest ever. It is true. It’s the biggest search service. It’s the biggest mapping service in the world as well. Don’t forget all that and all of that is backed up by an ad network.
Ross Greenwood: How does a company get that big in so many different areas in just 19 years? In the past, giant conglomerates like that might have taken generations to have become as large and as all pervasive as what they are.
Alex Pollak: Well, because the whole thing is kind of moved online and because the information in itself is digital, Ross. Before, when you had to disseminate information, you needed a printing press and a newspaper to do it. Now, when you want to disseminate information, you just do it as it were online. Google and all those online companies that came through there just understood that the whole thing that was previously a physical process of moving is around with newspapers, for argument sake, became a digital process or an online practice. That enabled them to suddenly hit the scale from nothing. With 19 years old, it was floated at US$20 billion. It’s now worth US$600 billion. That is what they drive into this ability to move from being a physical service into an online service, which other companies didn’t do. Google did do. That’s how it was huge.
Ross Greenwood: If you consider something as simple as say, for example, Microsoft Word, Excel, PowerPoint, all that type of thing, well, Google Docs really came over the top of that. It was almost seen as though Microsoft could not be touched in that particular space. There’s no doubt that what they have been able to do with the cloud-based productivity sweep, they’ve got spreadsheets, they’ve got abilities to create PowerPoint or the equivalent of those types of presentations. I mean, that was something that people said could not be done, that Microsoft could not be touched, but it just simply wasn’t right.
Alex Pollak: Google’s game in that one, if they can provide all the products that Microsoft previously provided, they can get you on their Google product. If they get you on their Google product, that allows them to study your whole lot of other services through the Google Cloud as you say. Actually, the whole spreadsheet and the PowerPoint and the Word, that’s all just a throwaway, giveaway product. Like Android is to mobile phone, that’s also Google. Forgot to mention that one. They use that almost throwaway stuff. If it’s spreadsheet, it’s their trip to get people to migrate away from Microsoft so that they can then sell in different things through the Google Suite.
Ross Greenwood: You brought the mapping you spoke about and it’s not just a mapping. Because, of course, if you have the most accurate and reliable maps in the world, then there’s every chance that you are also likely to be the very first service in the world to produce a driverless car. Simply because you know where they’re going to go and you also understand how they’re going to work.
Alex Pollak: Of course, that’s the next big battleground. The next big battleground is going to have that all backed into mapping and transportation. That’s all coming at you at a million miles an hour right now.
Ross Greenwood: We get to another small thing and this is project learned to try and live a free internet to everybody in the world. They’ve already tried this within the railway stations. Range of things that they have done. I mean, it’s just phenomenal. The more people they can put Google into their hands, the more information, the more ability they’ve got to sell the products.
Alex Pollak: Yes. That’s 100% right. By the way, they’re not the only people that are trying to do the internet to everybody. Facebook is trying it as well. There’s a whole stack of people that are trying to do it through these things called “low Earth orbit satellites,” which are trying to bring connectivity to people all around the world. Half the population of the world doesn’t have it, bring it to them as well.
Ross Greenwood: In regards to the share price, the enormous jump in the share price, which has been there and consistent over a long period of time, is it all over for it or not?
Alex Pollak: I don’t think so. I mean, I suspected ultimately what happens with companies like particularly Google is. Governments around the world gotta have to think about whether they want Google to be as big and powerful as it is because it is a massive company. Until that happens and even if that does happen, I suspect there’s still a bit of travel to go. People think because they got a mobile phone, then that’s the end of it.
Actually, that’s kind of just the beginning. The fun is just the device. Where we’re going to is a kind of connected world where everything is connected and the analytics behind that, which is one of the things that Google will do. Remember, there are eight major data centers in the world. Google is one of them. The Economist refers to this and others decide, and I even talk about it, data is the new oil. Data is the new oil.
Ross Greenwood: Tell you what, it’s not a bad line. Alex Pollak, the chief executive of Loftus Peak. We’re going to keep on moving, but I appreciate your time, Alex. Great explanation.
Alex Pollak: Thanks, Ross.