Google’s Challenges Defined

November 1, 2008

Jeffrey Rayport’s “Can Anything Derail Google’s Growth Engine?” is a round up write up. Mr. Rayport’s analysis hits the big points about Google and its dominance in Web search. Business Week has put a line in the sand, and Google’s rivals have to do something or get used to breathing the GOOG’s exhaust fumes. You can read this story here. For me, the most interesting comment in the article was this passage:

So how does Google extend its winning streak? In the end, it’s arguably all about amassing the most talent without falling prey to what’s known as Big Company disease, a condition that can leave a once-fleet-footed business complacent, overstaffed, and bureaucratic. In a recession, Google will need to do what “normal” companies do: streamline its workforce, cut budgets, and realign investments.

Mr. Rayport’s article will become a touchstone for the foreseeable future. The focus on ad revenue, the promise of Google Apps, and the reference to “Big Company” disease will define some of the conversation about Google.

There are, in my opinion, several other issues that warrant discussion; for example:

  1. Regulation. Who will regulate what at Google? The company is a de facto monopoly in advertising and Web search, and it operates globally. Its ad efficiency is different outside the US, but the GOOG is a modern day Standard Oil, US Steel, and Leland Stanford railway in digital form.
  2. Collateral damage. Google’s success has created opportunities. One new sector is search engine optimization, but that business may be squeezed by Google itself as the company implements some of its newer technologies such as the programmable search engine. Other businesses may find that Google’s ability to slash transactions costs will be highly disruptive, thus exacerbating some firms’ financial problems and opening the door to Google in other business sectors almost “by accident.”
  3. Culture. Google continues with its math club culture. As Google grows, will the company be able to deal with the loose ends that are becoming more evident; for example, the issues with the Android G 1 phone’s security, the Gmail outage, and company’s legendary indifference to customers who want to know how to make a service work or why a Web page disappeared from the Google index.

Mr. Rayport has defined the Google of late 2008, but more needs to be done to address Google’s strengths and weaknesses. The Business Week article is a good start. Now more is needed.

Stephen Arnold, October 28, 2008


One Response to “Google’s Challenges Defined”

  1. Finding information on the Web: Google on November 8th, 2008 11:40 am

    […] Google’s challenges defined […]

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