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This weekend, Google celebrated its 10th birthday.

In September 1998, armed with $100,000 in seed money, Stanford graduate students Sergey Brin and Larry Page began a journey that a decade later has seen the development of a $150bn company that employs more than 20,000 people.

Google's story is truly remarkable and is deserving of acclaim, but while the company parties and looks back on its humble origins, it's worth considering what the next 10 years hold for arguably the internet's most powerful brand.

The reality is that for all of the attention Google commands (one need look no further than the launch of its Chrome browser to see how easily Google can lure press) and for all of its other "projects" - from Google Docs to Google Earth - Google's incredible journey over the past 10 years overshadows the fact that it has failed to really grow beyond search in any meaningful way.

According to its latest 10-Q filing with the SEC, Google indicates that 97% of its revenues come from search advertising (primarily AdWords/AdSense).

Its 10-Q also includes the statement:

"Revenues realized through the Google Print Ads Program, Google Audio Ads, Google TV Ads, Google Checkout, YouTube and Postini were not material in any of the periods presented."

Given the hype around some of Google's products and acquisitions, this should be of concern.

After all, it's hard to ignore the fact that for all of Google's money, brains and efforts, it has not yet been able to leverage its dominance of online search to expand with similar success into new markets in the same way companies like Microsoft were able to expand their dominance to other markets (legally or illegally).

Google Print Ads, Audio Ads and TV Ads haven't exactly shaken up print, radio and television advertising.

Google Checkout has failed to put a dent in PayPal's market. Google's arrogance vis-à-vis media companies led to a $1bn lawsuit and has given News Corp. and NBC Universal's Hulu an opportunity to thrive while YouTube changes strategy in an effort to monetize.

Mainstream consumers and enterprises are not switching from Microsoft Office to Google's "office in the cloud" - Google Apps. Google Finance hasn't even eeked out a position on comScore's list of top business/personal finance websites.

In short, when looking at Google's "portfolio" of products and services, there are few clear winners, at least financially-speaking.

Beyond the fact that Google has been largely unsuccessful in proving that it's more than a one-trick pony or one-hit wonder, there are even more reasons to question what the future holds:

  • Google has not proven it has what it takes to service the enterprise market. While Google clearly covets a position in enterprise markets and this is the logical market in which to find growth, it has yet to demonstrate that it is capable of meeting the needs and providing the services that enterprises demand.

    Many companies are skeptical about trusting Google with their data, and Google has not yet convinced the enterprise market that it can be relied upon for support as it often promotes a "self-service" approach that doesn't work for many corporations.

  • Google is trying to do too much. When looking at Google's portfolio of less-than-successful products and services, it's hard not to ask, "Is Google losing its focus?"

    While some see a master plan in its hodgepodge of products and services, the reality is probably far less masterful. Such a hodgepodge is unlikely to miraculously transform overnight into a coherent suite of products and services that enable Google to dethrone other major technology companies in Google's non-core markets.

    Even analysts have noted this.

  • Google is arrogant. From Hollywood to Madison Avenue, Google has stepped on a lot of toes. I think this is because Google believes that technological prowess trumps people prowess.

    I have the perception that Google sees every problem a market or company faces as a technology problem. This is not always the case and Google's "our way or the highway" approach to those who don't agree has been less than productive.

  • Google has become Big Brother. Concerns over all of the data that Google is collecting about individuals and businesses is constantly rising. And rightfully so - the company's stance gives little reason to believe that it is respectful of privacy rights.

  • Google is already attracting scrutiny from regulators. The company's dominance in search and online advertising is recognized by almost everyone. This is increasingly drawing the attention of regulators.

    Google's deal with Yahoo, for instance, is being greeted with far more scrutiny than it anticipated. Look for this type of scrutiny to become more intense as time goes on.

  • Many say that Google has a homogenous, elitist culture. I've spoken with quite a few people who have noticed that Google's workforce is quite homogenous (you'd think Stanford is the only university in the world) and that elitism is rampant.

    I even know several people who turned down job offers at Google to work at "less desirable" companies (including Yahoo) because they were turned off by Google's corporate culture.

The bottom line is that Google is now a tween but given its prodigious childhood, it needs to grow up fast.

The window of opportunity for taking advantage of the position it's built over the past 10 years won't last forever.  Google finds itself in an industry where long-term positions are established by adulthood and Google will be an adult before we know it.

Drama 2.0

Published 8 September, 2008 by Drama 2.0

237 more posts from this author

Comments (1)

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elliot

I think Google's biggest accomplishment was not search, but monetizing the search. As a result of their superior technology and their monetization strategy they are the #1 force in internet advertising. No one knows how to monetize phrases like "Long Island cruises" like Google.

I agree with most of the points, however, I think any other company with such an amazing 10 year growth spurt would come out much worse.

almost 8 years ago

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