The Year of the Google

7^th January 2006
The Malta Independent - Friday Wisdom

With hindsight, every few decades a particular year emerges that becomes a historic landmark for a new way of thinking or for the emergence of a new generation with a radically new approach, changing the long-established habits of the way we go about doing things. A new culture!

For people of my generation, 1968 was one such year. It was the year of the hippies and flower power, when Beatles mania started to fade into modern rock. In 1968 it became evident that America could not win the Vietnam War. As the post-war baby boomers turned into adults we felt that the old generation had let us down and we wanted to challenge everything, the good, the bad and the ugly. Conservatism gave way to permissiveness. Student revolutions started on both sides of the Atlantic and the revolt against the communist system had to be quashed on the streets of Prague by the military force of the Warsaw Pact.

It was just a postponement however of what was to materialise in the next landmark year of 1989, when the Berlin wall came down, Germany was re-united and the formal disintegration of the Warsaw Pact was the precursor of the disintegration of the Soviet Union. Existent communist states were liberated and new states were formed, some of which are still finding the transition out of communism painful and hazardous, as proven by the events of this week in Ukraine.

History is still too fresh to judge whether future generations will regard 2004 as the landmark year for the enlargement of the European Union by the incorporation of many of the states that were liberalised from communism through the events of 1989.

My hunch is that the next landmark year will, however, be marked by a new concept rather than by the mere prolongation of events started in 1989, which could take several decades to evolve into their final end through the process of true democratisation of Russia and the satellite ex-Soviet states that are still under Moscow’s influence. A process that will extend the EU into a loose political union from the Atlantic to the Urals.

If 2005 is to qualify for consideration by future historians as a landmark year, then the marking concept has to be much more universal and pervasive across all societies. 2005 may well be remembered as the year of the google.

It was the year when the power of the internet was placed at the fingertips of the population at large by search engine providers, foremost among which is Google. The brand has become so powerful that the brand word has assumed a popular meaning to explain the act of searching for something on the internet and the coined word may well end up in the official dictionary.

It is not so much that during 2005 the share price of Google that was marketed for the first time in August 2004 at $85 actually reached a high of $430, as Google’s business revenues from electronic advertising reached unprecedented levels. It is that more and more people are resorting to the internet to search for their particular requirements and that this is changing the business model of business organisations large and small.

The internet is no longer amazing technology. Google and its peers have turned it into a powerful information application for students, researchers and businesses alike. Perhaps this is more remarkable because 2005 has witnessed the shrinkage of a strong US brand which hitherto used to embody the commercial strength of the American model. General Motors (GM) found the going hard to compete against the agile Japanese and Korean car manufacturers that are not burdened with GM’s legacy of costs resulting from its past successes in the form of health care and pensions for existent and former employees.

GM saw its share price more than halve in 2005 to reach a 15-year low and its bond rating was cut in rapid successive steps from investment grade to high yield junk status.

There was a time not so long ago when it was normal to argue that what was good for GM was good for America. In 2005, it was more appropriate to say that what was good for Google was good for America.

This is probably the vision that should guide the US and European leaders in taking globalisation one step forward through trade liberalisation under the World Trade Organisation. America’s strength is no longer symbolised by its GMs but by its Googles, just as Europe’s strength is no longer typified by its FIATs but by its Vodafones and Nokias.

Developed countries have every interest in demanding and exacting intellectual rights protection and open markets for its new market leaders and, in compensation, conceding to open their own markets for agriculture trade from developing countries.

2006 may well be the year when the students and young people who revolted in the 1968’s cultural revolution will start turning into “young” pensioners. More people will turn 60 in the developed world during 2006 than in any other year before, as the babies born in the first full year after the end of the second world war approach retirement.

For Malta, it is imperative that 2006 be the year of implantation of a new pensions revolution if we truly mean for society to keep its capacity to sustain its growing pension obligations.