The Economist has this week a great leader and briefing on Google, its exponential growth, business model, culture and future challenges as it becomes more and more a monopoly on its own right.

Google's business model is assumed to be based on servicing as much of its customer needs as possible, to store the information, datamine it and generate healthy profits through advertising. Incremental cost is close to zero thanks to the "cloud" architecture, though one could argue YouTune or DoubleClick were not free. Hence the need to expand into new services such as email, payments, navigations, office applications, etc... The more your customers remain in this "virtual" walled garden, the more you know about them and can monetize them.

Issues arise when people - and politicians - get wary about privacy, and that the need to expand means conflicting with even more industries/companies, e.g. media companies, Microsoft in software, banks in payments, telecom operators in internet connectivity, etc...

I am really looking forward to seeing how things unfold for Google. They did benefit so far from a perfect storm - smart people, weak competition, booming advertising market - and were impressive in executing their strategy and achieve a $160bn market cap. Curious to see how they would face some downturns - e.g. bearish advertising market, brain exodus, antitrust reviews, copyright lawsuits....