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Originally published December 22, 2008 at 12:00 AM | Page modified December 22, 2008 at 7:52 AM

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Brier Dudley

Is the honeymoon really over for Google?

A month ago we reported that Google is trying to sublease one of the three buildings on its brand new Kirkland campus. Now it's trying to lease part of a second building, as well.

Seattle Times staff columnist

Apologies for sharing more bad news on what should be a joyful week, but I've learned that Google's going to give up even more of its Kirkland campus than previously disclosed.

A month ago we reported that Google is trying to sublease one of the three buildings on its brand new Kirkland campus.

Now it's trying to lease part of a second building, as well.

Altogether, that covers 78,000 square feet in the 195,000-square-foot development on Sixth Street.

Google still plans to occupy at least a "portion" of the campus sometime in 2009, a spokesman said.

For now, the three buildings are sitting there empty, overlooking Lake Washington toward Microsoft Chief Executive Steve Ballmer's place on Hunts Point.

It reminds me of the artillery bunkers at Fort Worden, the defunct base in Port Townsend that was state-of-the-art a century ago but never used in battle.

This was going to be a year-end column, summing up 2008 and looking forward to 2009.

The forecast in a nutshell: There will be more uncertainty, a flood of mobile applications and more aggressive ad tactics used by "free" online services. Microsoft will regain stride with Windows 7 and consumers will wish they could afford the new and thinner TVs from Asia that will connect directly to the Web.

But, most of all, it will finally sink in that Google's honeymoon is over.

The stock's plunge this fall was one indication that the bloom's off the rose, but it will come back eventually.

Meanwhile, the massive, gleaming new Google North campus on Sixth Street in Kirkland will remain — a half-empty monument to the company's golden era and hubris. Sort of like the Macworld conference next month in San Francisco that Steve Jobs abandoned, marking the end of a great stretch for Apple.

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Google's empty space in Kirkland could also be a symbol of the end of a technology-business cycle largely defined by the company's success and wild enthusiasm for its platform.

Or maybe it just represents the uncertainty that's frozen so many companies. They're all in limbo, watching and waiting to see when conditions will improve and how much they'll be affected in the coming year.

It's hard to believe Google's in the same boat as others. Just yesterday it was the friendly new gateway to the Web for consumers, a mecca for programmers and the thrilling new yin to Microsoft's yang, the biggest challenge to Redmond's dominance since Linux.

All along, Google executives politely declined to say negative things about Microsoft. That's why the Kirkland campus stands out, because it was such a confrontational move.

At one level, the Kirkland campus is just another victim of the real-estate downturn. Every major city now has fancy offices built for technology tenants that never materialized.

Google has offices all over the place that are undergoing changes. It's adjusting plans to expand near its Mountain View, Calif., headquarters, and it's subleasing offices in New York, where at one point it lined up more space than it had in Kirkland.

Google maturation and moves to slow growth don't mean a financial catastrophe, although I'd be surprised if it ever reached the 2,000 local employees envisioned a few years ago.

With or without the Kirkland campus, Google still employs more than 500 people here and is continuing to hire, although at a far slower pace.

It's not as generous with its employees' time anymore, but it's still investing, especially in technology to improve its delivery of local, geographically targeted advertising, which will probably drive its next phase of growth. That's where Google and others are heading with those handy online maps that sync with new handheld computers and smartphones, not to mention your car, game console and television.

But it's not the same as it was at the start of 2008, when the money was flowing and people still believed Google was pointing toward a never-ending river of Web advertising dollars.

A correction's already under way among Web 2.0 startups riding its coattails.

No wonder venture capitalists aren't expecting much action until at least 2010. With the Google era winding down, Microsoft and big media companies aren't in such a rush to buy promising Web startups.

It's time to reset expectations, which can't happen until Google comes down to earth.

Everyone needs a break from the chorus constantly singing the praises of this new platform. Companies need a little quiet time to reassess whether they can all build businesses emulating Google's mega-scale online business model.

Google's also sorting out its internal organization and spending, figuring out how to make it through the downturn without destroying its momentum and culture.

Depending on how it all shakes out, the position of lead dog/spiritual leader of the Web and the tech industry could be up for grabs again soon. Now that's a story to look forward to in the new year.

Happy holidays!

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or bdudley@seattletimes.com.

Copyright © 2008 The Seattle Times Company

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About Brier Dudley
Brier Dudley offers a critical look at technology and business issues affecting the Northwest.
bdudley@seattletimes.com | 206-515-5687

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