Was I Wrong About Google?
In my August 16 blog (“Google Dominating Microsoft? Gimme a Break!”), I argued that Google’s mission wasn’t to dominate Microsoft but to dominate search. I thought I made a pretty compelling case, but over the past few weeks, the explosion of new products, services and alliances makes a lot of observers wonder about the company’s real motives.
Google’s latest forays include some pretty compelling products (like internet telephony and blog search), a partnership with NASA (which will involve Google’s building an enormous campus on a former military base), and a proposal to provide San Francisco with free WiFi. The buzz is strong, to the point that a recent BusinessWeek cover story examined in breathless detail the exodus of 100 “top talent” Microsofties to Google.
So was I wrong? Is Jordan Rohan, an analyst for RBC Capital Markets, right? He says that “Google has pulled off the greatest obfuscation in the history of Silicon Valley: Everyone thinks they’re a one trick pony” when in reality, they’re “going after Microsoft in a big way.” Rohan was quoted in a San Francisco Chronicle lead story that was ominously entitled “Tech Titans Ready to Brawl: Google, Microsoft Look to Square off on Net and Desktop.”
Well, Rohan and the Chronicle may be right, but I still think I am. Google execs are smart, and challenging Microsoft directly is dumb. Remember that Microsoft is ten times Google’s size in both revenues and profits, and its flagship quasi-monopolistic products Windows and Office are still growing at a 15% annual rate. The installed base is deep and worldwide.
Second, when I wrote that Google wants to dominate search, I didn’t mean that it would be content to simply be a little search engine. What I meant was that Google wants to be the primary player in helping us organize and customize the available information on the Internet. That’s a pretty big mission, but it doesn’t mean that Google want to be a Microsoft-plus-2%. There are plenty of new unchartered paths towards achieving that mission without trying to be another Microsoft. Further, as one executive of rival search engine Ask Jeeves notes, Google’s new products are products “that can be searched.” Google seems to be staying true to its mission.
Third, I believe Marissa Mayer of Google Consumer Web products when she says her strategy is not to kill Microsoft but to look for areas where Google can create some new value for users, and if the results get into product spaces that have been owned by other companies, well—so what? In my own research, I’ve found that the best companies are less concerned with beating competitors than with staying ahead of the pack by creating new products and markets.
Does that mean that Google might one day come up with a Web-based alternative to Office? Possibly. Would that hurt Microsoft? Definitely. Remember how Salesforce.com’s fast, flexible, and cheap web-based customer relations software seriously wounded Siebel’s entrenched business?
But again, I think that what is really happening is that Google is simple an innovation machine that is continuously building upon its expertise in searching and organizing the Internet. The company has a ridiculously entrepreneurial environment, where individuals can take 20% of their work week to work on whatever pleases them, and where tiny teams of three can have a real impact. Obviously, some of these innovations will get into areas deemed sacred by companies like Microsoft, but that doesn’t mean that Google executives spend a lot of time figuring out comprehensive strategies to topple Microsoft.
One warning: In my upcoming book Break From the Pack, I document how companies that try to be all things to all customers do worse than those who focus on dominating select slices of the market. That’s one reason that Microsoft trails Google in speed, new product introductions, and growth. If Google starts trying to control the Web, or starts looking like a “one stop Internet shop” with something for everyone, it might find itself looking like Microsoft—overly complex, unclear in its priorities, and financially stagnant. If that happens, Google would be in trouble, because it doesn’t have Microsoft’s reach, legacy, or its $40 billion cash hoard.
Google’s latest forays include some pretty compelling products (like internet telephony and blog search), a partnership with NASA (which will involve Google’s building an enormous campus on a former military base), and a proposal to provide San Francisco with free WiFi. The buzz is strong, to the point that a recent BusinessWeek cover story examined in breathless detail the exodus of 100 “top talent” Microsofties to Google.
So was I wrong? Is Jordan Rohan, an analyst for RBC Capital Markets, right? He says that “Google has pulled off the greatest obfuscation in the history of Silicon Valley: Everyone thinks they’re a one trick pony” when in reality, they’re “going after Microsoft in a big way.” Rohan was quoted in a San Francisco Chronicle lead story that was ominously entitled “Tech Titans Ready to Brawl: Google, Microsoft Look to Square off on Net and Desktop.”
Well, Rohan and the Chronicle may be right, but I still think I am. Google execs are smart, and challenging Microsoft directly is dumb. Remember that Microsoft is ten times Google’s size in both revenues and profits, and its flagship quasi-monopolistic products Windows and Office are still growing at a 15% annual rate. The installed base is deep and worldwide.
Second, when I wrote that Google wants to dominate search, I didn’t mean that it would be content to simply be a little search engine. What I meant was that Google wants to be the primary player in helping us organize and customize the available information on the Internet. That’s a pretty big mission, but it doesn’t mean that Google want to be a Microsoft-plus-2%. There are plenty of new unchartered paths towards achieving that mission without trying to be another Microsoft. Further, as one executive of rival search engine Ask Jeeves notes, Google’s new products are products “that can be searched.” Google seems to be staying true to its mission.
Third, I believe Marissa Mayer of Google Consumer Web products when she says her strategy is not to kill Microsoft but to look for areas where Google can create some new value for users, and if the results get into product spaces that have been owned by other companies, well—so what? In my own research, I’ve found that the best companies are less concerned with beating competitors than with staying ahead of the pack by creating new products and markets.
Does that mean that Google might one day come up with a Web-based alternative to Office? Possibly. Would that hurt Microsoft? Definitely. Remember how Salesforce.com’s fast, flexible, and cheap web-based customer relations software seriously wounded Siebel’s entrenched business?
But again, I think that what is really happening is that Google is simple an innovation machine that is continuously building upon its expertise in searching and organizing the Internet. The company has a ridiculously entrepreneurial environment, where individuals can take 20% of their work week to work on whatever pleases them, and where tiny teams of three can have a real impact. Obviously, some of these innovations will get into areas deemed sacred by companies like Microsoft, but that doesn’t mean that Google executives spend a lot of time figuring out comprehensive strategies to topple Microsoft.
One warning: In my upcoming book Break From the Pack, I document how companies that try to be all things to all customers do worse than those who focus on dominating select slices of the market. That’s one reason that Microsoft trails Google in speed, new product introductions, and growth. If Google starts trying to control the Web, or starts looking like a “one stop Internet shop” with something for everyone, it might find itself looking like Microsoft—overly complex, unclear in its priorities, and financially stagnant. If that happens, Google would be in trouble, because it doesn’t have Microsoft’s reach, legacy, or its $40 billion cash hoard.
posted by Oren Harari at 11:32 AM
0 Comments:
Post a Comment
<< Home