Iskold argues that Google seems to possess unlimited demand and unlimited supply, something he claims violates the basics of business economics.
This is not what I think is going on with Google. I think Google is a perfect example of a company in the right place, with the right model, at the right time. All juggernaut companies on the upswing look invincible.
While Google is making tons of money off its online ad business -- the company has several products that have yet to turn a profit or gain mass traction on the Web. Google tried to beat YouTube at the online video game, but it had to give in and buy the company. This is proof alone that Google isn't invincible.
And Google could still be dragged down by its non-stop legal fights over intellectual property.
You don't believe me? Let's turn our attention to Microsoft in the mid-1990s. At the time, Microsoft was riding high on over a decade's success in the software industry. Microsoft was at the pinnacle of its success. It was a company with the right model, in the right place, at the right time.
Flash-forward ten years. Does Microsoft look that invincible today? No. Why? Because the market factors that made Microsoft indestructible then have worked against it in the last decade. In business, time wounds all heels.
And ironically enough, it was a series of legal fights that broght Microsoft's crashing down to earth. While Microsoft's initial anti-trust fights didn't cripple it, they did signal the end of Redmond's seeming omnipotence. Google too may taste some humble pie if it continues its fight to end the current IP structure.
Google's reign at the top may last another five or even ten years, but eventually, the market will shift -- in fact its shifting right now, we just can't see it. And once enough factors change, Google will go from being invincible to vulnerable.