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Wednesday, October 20, 2004
Leaked Documents Reveal Google Growth Forecasts
The San Francisco Chronicle has obtained some leaked documents revealing Google's predictions of growth. Google has always remained tight-lipped about its future, refusing to issue forecasts, because, as the IPO prospectus explains, "A management team distracted by a series of short-term targets is as pointless as a dieter stepping on a scale every half hour." So, with the quarterly report coming tomorrow, someone has leaked out some internal Google documents forecasting expected growth over the next few years.

As the graphic on the right shows, Google expects to gain just under 100,000 advertiser accounts every year. Google made the forecasts as part of the specifications of a new billing system it had commissioned, showing the company, BFS Finance, how big it needed the system to scale. Google refused to confirm the validity of the document. Scott Kessler, an analyst for Standard & Poor, says the numbers are very good, but that the number of advertisers should prove less relevant over time, with more emphasis on the price of ads. The article mentions a Morgan Stanley study, which showed the rocketing price of two or three word queries.

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If the predictions were made as part of a specification to a company
that needed to handle these numbers, it's easy to suppose that the
numbers were intentionally guessed on the "high end" of
what-could-possibly-happen. It's a common practice when writing
specifications to say "We might get super-lucky and get this amount of
traffic... the system we're commissioning needs to be able to handle
it." This is the opposite of when you're making a budget when you
intentionally guess on the "low end" of what-could-possibly-happen.
So these numbers don't really mean anything except they give you an
idea of what Google thinks they could achieve if they really get lucky.
It doesn't mean Google seriously expects this kind of growth.
Comment: pub key

That is actually what I thought. Google pretty much would have to give them the overly optimistic upper end of the spectrum, or else the system wouldn't be able to scale. The one thing we can get out of it is that Google definitely expects serious growth, even if not that much. Since Google doesn't put out any forecasts at all, this is the closest we're going to get to a simple forecast of "positive".
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