Google’s Real Problem
There’s some interesting chat about whether Google is in trouble, although none of the pieces ask the question that I think is the most important one. BusinessWeek points to the fact that none of its new products are really gaining traction, which may be less down to the quality of those products — Earth, Finance, Chat etc — and more down to the fact that the whole point about Google for most people is keeping things simple:
The problem is that every time Google branches out, it struggles with the very thing that makes its search engine so successful: simplicity. The minimalist Google home page offers a stark contrast with the cluttered sites of key rivals Yahoo and MSN. People go to Google to find information fast. So Google can’t showcase its plethora of new products without jeopardizing this sleek interface and the popularity that generates a $6 billion geyser of cash from search ads. But the lack of exposure for its new products means only 10% of Google visitors use it for anything other than Web and image searches, says Hitwise.
To that I’d add the fact that it’s not just about exposure. Most people use the Internet for simple things, like finding stuff. They’re just not that interested in other things, however much we’d like them to be.
Meanwhile Robert Scoble wonders aloud why there is no real Google presence at the Gnomedex conference, a select gathering of developers and dweebs. And someone called SlashChick writes along the same lines as BusinessWeek, pointing out that Google’s approach of allowing employees to use 20% of their time developing new ideas may be fine when it’s a private, smallish company, but now it’s getting big won’t work so well if those projects make only a few hundred thousand dollars for the company. Alongside the earnings from AdSense, assigning employees to maintain these products will be hard to justify:
Once Google realizes they have to cut back and only continue development on the projects that did “stick”, inevitably, they will crush a few of their developers’ hearts. I have a feeling some of those developers may even become jaded and go out and start their own companies (sort of like the many software companies spawned by former Microsofties in Redmond.) Those companies may even grow to become quite successful. Hmm…
Good points, and it’s interesting to see how this view leaves Google vulnerable. Of course, it only needs one of these products to be vaguely as successful as search to draw enough users to justify it. And perhaps Google is hoping that one of its Microsoft-killers will kick in, and then the tables will be turned.
But all this rests on the idea that Google Search and AdSense continue their symbiotic relationship. The first provides dominant search, the second provides dominant ads that (for the most part) come from people using Google Search. AdSense would never have been successful were it not for Search, since the latter gets the eyeballs, the former brings in the cash. But what happens when one starts poisoning the other? What happens if AdSense starts to undermine the efficacy of Search? I’d argue this is already happening: web spammers are already successfully manipulating search results so that users visit their AdSense-laden web sites. This is happening with both ordinary search and News Search. Despite the obvious conflicts of interest here, most worrying for Google’s shareholders is the idea that its search engine may not be good enough anymore. Is this what’s keeping Google’s developers away from Gnomedex?