Ram Posted November 6, 2007 Share Posted November 6, 2007 Excellent article on Google, asking the question, " Is it doing too much at the same time ?" ------------------- In the 18 months since its stock market flotation, Google has been transformed from a company that prided itself on being simple and effective, into a multi-headed high tech beast which wants to get involved in everything. According to Marissa Mayer, vice president of search products at the company's Silicon Valley headquarters, Google likes to release new products "early and often". And that means, she cheerfully admits, that nine out of ten ideas will fail. "We want to try things out, lots of things. Our goal is to fail fast, get the product out, and see what users like." Already Google's original internet search tool sits alongside Google Maps, internet-based phone calls, email, photo storage, a searchable satellite view of the globe, and (here's one that might "fail fast") Google Ride Finder, which shows the live position of individual taxis in 15 American cities. Google is sensitive to the charge of losing focus on its core activity. 'Anti-portal' stance There's a history here, because when Google emerged in the late 1990s to challenge existing web portals like Yahoo and Lycos, its success was based on the idea of doing one thing well, "like a pencil", as they always said. "If you make a list of all the things that a portal is," says Google-watcher John Battelle, "today, Google checks every one of those boxes. "But when you say to them 'you're a portal now', they get very upset, because they built the whole company on the idea of being anti-portal." Google justifies its vast new range of services by explaining they all still fit the original company mission statement, to "organise the world's information." If you count video footage, conversations and the last email you wrote as "information", then, arguably they do, but only in the geeky sense of information as data, rather than what most people understand by it. And in that sense, there really is not anything you can send over the internet that is not information. Dangerous strategy If Google is in danger of over-diversifying its product range, its source of income remains largely one-dimensional - and therefore potentially vulnerable. Google makes its money from advertising. If you run a Google search, the chances are you will find a list of what it coyly calls 'Sponsored Links' - that is adverts - to the right of the search results. They are from hundreds of thousands of companies, which have picked particular words as triggers for their ads to appear, hoping for instance that if you search for 'France holidays' you will be a likely customer for their particular brand of French package holidays. Only if you click on the advert does the advertiser have to pay Google, which is good news for advertisers, because they are only paying for motivated customers to visit their website. Google UK's David MacDonald says that for advertisers the system is "a magic money-making machine", because of the measurable returns they get for what they pay Google. Indeed, so scientific is the pay-per-click system these days that Google even offers advertisers suggested mis-spelling of search terms to add to the list of words that trigger an advert's appearance. One of the hardest spellings for British Google users, apparently, is "Britney Spears" - also one of the most popular searches. So Google now offers a comprehensive list of more than 1000 ways in which her name has been misspelt (most likely mistakes: brittany spears, brittney spears, britany spears; least likely: brinthey spears, brirrany spears, buttney spears, grittney spears, prietny spears - all of which were typed by more than one person within 3 months.) Potential risks Google's ad system earned the company $1.5bn during the July to September quarter of 2005, almost double what it made a year earlier. (Google's final results for 2005 will be announced on January 31st.) Ad income has given Google the resources to bring out products like Google Earth and Google Desktop, which have, as yet, no detectable source of income. And ad income is the power behind Google's stock, whose apparently unstoppable rise makes the financial community's initial scepticism now look humiliatingly wrong. At the last count, Google was worth around $140bn, almost five times its value at flotation, and comfortably more than the likes of Coca-Cola and Time Warner.Google's energy and speed of change show how determined it is to avoid resting on its laurels. "While the outside world sees a success, those of us inside know the many different challenges and possible failure points and risks," observes Ms Mayer. Google's canny founders are also all too aware that Silicon Valley has seen many high tech companies, from Netscape to Pets.com, which in their heyday appeared to be unbeatable, but are now all but forgotten. -------- http://news.bbc.co.uk/2/hi/business/4598090.stm Link to comment Share on other sites More sharing options...
apocalypse Posted November 6, 2007 Share Posted November 6, 2007 Link to comment Share on other sites More sharing options...
fineleg Posted November 6, 2007 Share Posted November 6, 2007 They have billions of cash piled up, that allows them flexibility to try different things, and also flex their muscles in new areas they venture into. As arun lal would say, "Only time will tell" - this used to be A.Lal's favorite along with Indeed. Link to comment Share on other sites More sharing options...
Ram Posted November 6, 2007 Author Share Posted November 6, 2007 As they keep diversifying, its just a matter of time before they experience a high-profile failure and that could hurt them badly. Link to comment Share on other sites More sharing options...
Lurker Posted November 6, 2007 Share Posted November 6, 2007 As they keep diversifying' date=' its just a matter of time before they experience a high-profile failure and that could hurt them badly.[/quote'] Boss that news is almost year and a half old :embaressed_smile: Apart from Google's thrust on ingenuity, one reason why they have diversified so much is rather easy to explain - they are sitting on pile of cash. Since the company is doing very well, has great profit and brand value AND has a lot of cash it becomes an easy target for takeover. Reminds me of the time I worked for a Copper mining company. It was a 125 year old Enterprise and had just posted its most successful year ever. Was sitting on a pile of cash 2-3 billion dollars(of pure profit) and were trying to do everything possible to get rid of it(read buy other companies). But before they could, they were bought themselves!! xxx Link to comment Share on other sites More sharing options...
coffee_rules Posted November 6, 2007 Share Posted November 6, 2007 Thay are looking to invest in broadband wireless access as well. Link to comment Share on other sites More sharing options...
fineleg Posted November 6, 2007 Share Posted November 6, 2007 As they keep diversifying' date=' its just a matter of time before they experience a high-profile failure and that could hurt them badly.[/quote'] Their growth rate is mind boggling, and their cash pile is huge. Thats the reason why they can do all this stuff. IMO, they will continue to gobble up other successful companies (by acquiring them or beating them), and will thus try to safeguard themselves. Link to comment Share on other sites More sharing options...
fineleg Posted November 6, 2007 Share Posted November 6, 2007 Thay are looking to invest in broadband wireless access as well. Yes, they even have an OS (aka platform) for mobile devices. Google unveiled a complete mobile phone stack under an open-source license as an alternative to proprietary platforms from Microsoft and Symbian. Aimed at the roughly 3 billion mobile phone users around the world, Android, as it is called, is a Linux-based mobile software stack, including an operating system, HTML Web browser, middleware and applications. Google will make a software developer kit for Android available within a week to allow programmers to begin testing it. Link to comment Share on other sites More sharing options...
Ram Posted November 6, 2007 Author Share Posted November 6, 2007 Boss that news is almost year and a half old :embaressed_smile: Apart from Google's thrust on ingenuity, one reason why they have diversified so much is rather easy to explain - they are sitting on pile of cash. Since the company is doing very well, has great profit and brand value AND has a lot of cash it becomes an easy target for takeover. Reminds me of the time I worked for a Copper mining company. It was a 125 year old Enterprise and had just posted its most successful year ever. Was sitting on a pile of cash 2-3 billion dollars(of pure profit) and were trying to do everything possible to get rid of it(read buy other companies). But before they could, they were bought themselves!! xxx Google is a target for takeover ? What do you mean Lurks ? Nobody is taking over this $140 billion dollar behemoth. Their growth rate is mind boggling, and their cash pile is huge. Thats the reason why they can do all this stuff. IMO, they will continue to gobble up other successful companies (by acquiring them or beating them), and will thus try to safeguard themselves. I doubt that. Google prides itself in its culture of innovation and excellence. Their employess have a distinct culture. Inorganic growth through acquisitions might hurt that. Google's strategy is quite clear. They want to be a part of every aspect of a person's life, from advertising, to mail to entertainment to travel to even document management. Their goal is deeply entrench themselves into the life pattern of the ordinary consumer and then roll out a sling of paid products. Link to comment Share on other sites More sharing options...
Ram Posted November 6, 2007 Author Share Posted November 6, 2007 j6h-gm01Fb0 Everybody's dream company to work for..... Link to comment Share on other sites More sharing options...
ludhianvi Posted November 6, 2007 Share Posted November 6, 2007 daem, that looks good. Didnt know Google they had so much stuff in their office. I would just live there. Now only if they had cricket nets with bowling machines :tounge_smile: Link to comment Share on other sites More sharing options...
Bumper Posted November 6, 2007 Share Posted November 6, 2007 What a turn around for a company that negotiated with yahoo for a 100M takeover (which the genius Terry Semel turned down). The time Page & Brin implemented their idea, all they had was a product with virtually no strategy to make money. From that nothing, Google has been turned into a 800 pound gorilla that it is today. Google however must be seriously worried about the emergence of Facebook. Thats perhaps the only threat Google will be wary off. Not Microsoft, not Yahoo, but Facebook. Who would have thought these stoopid portals would be worth billions! Link to comment Share on other sites More sharing options...
Ram Posted November 6, 2007 Author Share Posted November 6, 2007 Just did a search for Google products and came up with a list of containing a mind-boggling 119 items ! But here is the catch, almost all of Google's revenue comes from two of those, adwords and AdSense and therein lies the risk. Link to comment Share on other sites More sharing options...
Bumper Posted November 6, 2007 Share Posted November 6, 2007 Just did a search for Google products and came up with a list of containing a mind-boggling 119 items ! But here is the catch' date=' almost all of Google's revenue comes from two of those, adwords and AdSense and therein lies the risk.[/quote'] Thats not as big a risk. Its like saying all of ESPN's revenue comes from NBA & NFL & there inlines the risk. Their biggest threat is the emergence of Facebook. Nothing else will stop them. Google's ad revenue will keep growing in the forseeable future, with more & more folks getting on the net everyday Link to comment Share on other sites More sharing options...
Lurker Posted November 6, 2007 Share Posted November 6, 2007 Google however must be seriously worried about the emergence of Facebook. Thats perhaps the only threat Google will be wary off. Not Microsoft, not Yahoo, but Facebook. Who would have thought these stoopid portals would be worth billions! Bumper, Why do you think Facebook is a threat to Google? Facebook's USP is quite different to Googles, that is search capability. If Google has withstood Myspace(which as we speak is bigger than Facebook) why wouldnt it withstand Facebook? Link to comment Share on other sites More sharing options...
fineleg Posted November 6, 2007 Share Posted November 6, 2007 I dont think Facebook can dethrone Google. Link to comment Share on other sites More sharing options...
ludhianvi Posted November 7, 2007 Share Posted November 7, 2007 who knows, maybe google will buy facebook like youtube Link to comment Share on other sites More sharing options...
fineleg Posted November 7, 2007 Share Posted November 7, 2007 Possible. Link to comment Share on other sites More sharing options...
Bumper Posted November 7, 2007 Share Posted November 7, 2007 Bumper, Why do you think Facebook is a threat to Google? Facebook's USP is quite different to Googles, that is search capability. If Google has withstood Myspace(which as we speak is bigger than Facebook) why wouldnt it withstand Facebook? No one can compete with Google in search. They are the brand name & have already captured the market. Google's only threat is from an emerging internet based business concept -- which is social networking. Google acquired its own employee's company (Orkut) to address its void in this space. However Facebook is the fastest growing social networking site in North America. Recently Facebook opened up its platform for generic application providers. While a majority of these apps are BS (such as throwing mud or sheep at friends -- nevertheless contributing to hits), there are some interesting ones too. One of my friends mentioned about this mapping application, which lets a user mark the places he visted along with how often he visits etc & forward it to his friends. While this may seem like an ordinary application, think about what this means to Facebook. One of the biggest areas Google & Yahoo are struggling to master, is tracking user behavior. If Google knows user A is a travel enthusiast, Google can maximise its revenue off travel ads. Similarly if user B is a movie buff, Google can target this user for movie ads & so on. This is a very very hard problem & inspite of the amount of intelligence they can build into their algorithms, Google or Yahoo can at the most do a speculative job. OTOH, people go to Facebook & voluntarily give out this info. In the example i mentioned, Facebook has managed to get the user to voluntarily provide them information on where he travels, how often he travels & when he travels etc, all by just changing the rules of the game. THIS IS ONE OF THE BIGGEST REASON why Google & Yahoo are scared of Facebook. Both Google & Yahoo made acquisition bids which were turned down by Facebook. Microsoft recently bought a stake in Facebook valued at $15B. Thats a ridiculously high valuation for a company thats making $100M in revenues. But there are some good reasons to back this hype. Overall i think Zuckerberg & co have the best chance to topple Google as the next internet giant. Zuckerberg dude has a good head on his shoulders. They way he's turning down acquisition bids (the guy hasnt made serious money yet), suggests that he has long term visions for the company and aint lookin for a quick exit! Link to comment Share on other sites More sharing options...
Rajiv Posted November 7, 2007 Share Posted November 7, 2007 OK, I have fooseball and pool at my office too :haha: But, ...darn I'd love to work for Google Link to comment Share on other sites More sharing options...
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