This interesting dust-up between Chinese search-engine Sohu (NASDAQ:SOHU) and Chinese wannabe Google (NASDAQ:GOOG) ought to be interesting to shareholders for a couple of reasons. The first is that Big Goo felt it necessary to kowtow to avoid a scandal surrounding its reported use of some Sohu code for typing in Chinese. (Google admits to "leveraging some non-Google database resources," which is, I'm sure, the non-evil way of admitting you copied someone else's work in order to try and make a few bucks.)
More important, I think, to investors is the irony that Google is continually described as such a major innovator at all -- a situation thrown into relief by this latest snafu.
Yes, Big Goo's search engine was a big step forward, and its text-based ads revolutionized the industry and made a few billionaires, but whence all these other great Google "innovations?" Picasa? Google Earth? Writely? Blogspot? YouTube? These are nearly universally presented by the fawning newsmen out there as amazing Google innovations.
But they were bought and paid for, actually, not innovated -- at least, not by Google. Other people thunk 'em up and sold 'em to Big Goo. Google's reliance on outside innovation might not be a worry if this Frankenstein's monster of an online software suite was worth the dough. But how many of these Google operations (besides Blogspot, which is such a fertile home for revenue-producing splogs) make any money for shareholders?
Knowing what to buy is fine, but Google's shoot-first and profit later acquisitions may someday come back to bite shareholders -- at least those who don't know how to get out while the getting is good.
Comments? Bring them here.
At the time of publication, Seth Jayson had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.
