Is Google too big to fail?

by Larry Magid

I’m starting to worry Google will become the world’s SPOF — that’s short for “single point of failure.” I also worry about the company’s power to determine whether certain other businesses make money.

A SPOF is a component in a system that — if it fails — brings down everything with it. We generally think of a SPOF as a point in a discrete system like a computer or a house. If the CPU or the hard drive in your computer fails, the entire machine is unusable. If the circuit breaker or fuse box in your house goes down, so do all the electrical appliances.

Mission-critical operations try to avoid SPOFs. That’s why commercial airliners always have at least two engines and two or three ways to perform many critical tasks, such as bringing down the landing gear. It’s why radio and TV stations and hospitals have backup power sources and why smart computer users back up their data.

I’m told that Google has plenty of redundancy within its own infrastructure so that, when a server or group of servers goes down, customers aren’t usually inconvenienced. But sometimes — such as happened Thursday — lots of people are affected. On its blog, Google explained that a system glitch caused it to route Web traffic via Asia, causing about 14 percent of users to experience slow services or even interruptions. The outage reportedly affected Google Search, caused Google News to slow to a crawl and created problems with YouTube, Google Maps, Google Docs, Google Reader and Google Analytics.

As you’d expect, a lot of details about the outage came via Twitter, through which people around the world immediately shared their experiences as Google services went down and back up. Twitter’s search term for this particular outage is googlefail.

I wasn’t personally affected by this outage, but as a Gmail and Google Calendar user, I have been unable for brief periods of time to gain access to my messages and schedule. That raises an important question: Is Google too big to fail?

We lately have applied the “too big to fail” argument to banks, automakers and a few other big businesses whose failure would have an enormous economic impact on thousands or millions of people. But when it comes to reach, companies like General Motors, AIG and Citibank are tiny compared with Google, which touches the lives of hundreds of millions of people in every part of the world.

A Google failure — even a temporary one — doesn’t just inconvenience people. It can cost them money. In addition to the potential financial loss and waste of time when businesses and professionals are not able to get e-mail or check their calendar, there is a large cadre of businesses and entrepreneurs that depend on Google advertising revenue.

Any Web site that participates in the Google AdSense program — and there are a lot of them — stands to lose money if Google’s ad servers go down. Businesses that buy ads will lose sales, and the Web sites that carry those ads will temporary lose that advertising revenue.

And it’s not just outages that people worry about. Google has software that ranks Web sites based on their importance. Page rank and other factors determine where a site shows up in a Google search. The higher your site is in the results, the more visitors you’ll get, which — if you’re an e-commerce site — translates into more sales. If you use display advertising, it means more hits and therefore more ad revenue.

The algorithms that determine how a site is ranked are, of course, controlled by Google, and when Google tweaks those algorithms, there are winners and losers.

Google has also been known to punish Web sites for violating its policies. The company has a “webmaster guidelines” page where it outlines “some of the illicit practices that may lead to a site being removed entirely from the Google index or otherwise penalized.” Google says that “if a site has been penalized, it may no longer show up in results on Google.com or on any of Google’s partner sites.”

Being penalized by Google could have a bigger financial impact on a small business than a fine imposed by a court or regulatory body for violating a federal or state law. But our legal system operates with some transparency and offers a chance to confront your accuser and put up a defense. Google does have a place where you can “submit your site for reconsideration,” but that’s not exactly the same level of protection that you would get if you were accused of breaking a real law.

This posting originally appeared in the San Jose Mercury News