Google: More Cause for Doubt
August 10, 2008
SFGate.com offers interesting views of business actions. The article “The AOL Flub Has analysts Revisiting Google” delivers on two counts. First, Ryan Kim summarizes Google’s admission that its investment in America Online has lost value, lots of value. Second, the write up rekindles the ashes of Google’s attempts at diversification have failed. You can read the August 9, 2008, story here. Mr. Kim revisits Google’s scattershot product development and reminds the reader that Google has been distracted by investments in companies such as YouTube.com, which has become a magnet for litigation and a challenge to monetize. Google may have overpaid for such properties as DoubleClick.com and gobbled small companies and done nothing to make them grow. More troublesome is Google’s interest in technologies unrelated to its core business; for example energy and space travel. For me the most important point in the article was this statement:
“Other than search, what has Google done right? They have 1,001 products in beta, but what’s been successful?” Chowdhry {\[an analyst quoted by Mr. Ryan] asked. “There has been a sequence of missteps and failures, and this is not the end. They miscalculated the valuation of AOL, and this is the first time they’re admitting to it.”
Google has a dominant position in Web search and advertising. The company has a track record of success in online advertising. Is it now time to reassess Google as company with a single business model and little else?
Stephen Arnold, August 10, 2008
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