Google Fumbles Government Ball

February 14, 2009

MarketWatch ran a story called “Google’s Sales to Uncle Sam in Apparent Decline” here. For me the most interesting information in the write up is the analysis of Office of Management & Budget data that show Google’s government sales declining, not from a lofty peak but from a pile of pennies and nickels. For example, the OMB data reveal that Google’s government sales wizards–if the data are accurate–racked up these revenue figures:

  • 2006-$413,9060
  • 2008-$81,046
  • 2009-$4,030 (since September 2008 to the present).

I am not sure about these figures. Google, true to form, won’t talk to me, and the company’s financial reports are only slightly more helpful than the masterpieces of misdirection generated by Amazon’s financial knights.

Let me offer several observations, which set forth my opinion about these data:

  1. The GOOG has a number of resellers who sell to the US Federal government. Now MarketWatch is a pretty sharp outfit, backed by the brain trust that delivers CBS into my living room. Perhaps these New York and San Francisco specialists should navigate to the GSA Web site, run a query for Google, and check out the names of the resellers who are the authorized vendors to the US government. One of these outfits ships Google Search Appliances into Federal agencies with monotonous regularity. These authorized resellers collect the dough and then pay Google its share. The US government in general and the OMB in particular does not track these types  of sales as Google deals. Trust me. These are Google deals, and the appetite for Google Search Appliances is growing.
  2. The GOOG has partners who deliver services to various Federal agencies. Same deal as the Google Search Appliance resellers. The partners handle the customer service, do the work, and in some cases collect money. The GOOG bills for certain services; the partners bill for others. The relationship between Google and partners is murky, but the partners servicing the Federal government are an elite crew and the GOOG seems to be well pleased with the sales these outfits are generating.
  3. Various big integrators in DC Google-ize certain projects. Here’s how this works. The integrators are a type of Google partner. The integrator gets a contract. (No, I won’t name these outfits because I do work for one of the most respected and successful in the Federal space. OMB tallies what the integrator bills, and does not break out the payments the integrators make to the GOOG.

How far off base is the MarketWatch article? Well, here in the goose pond, the goslings and I would characterize the write up as being in the next county. MarketWatch has some big name writers with reputations hewn of dead tree tradition. Too bad the way the Federal government works does not match up with the financial acumen of the researchers, analysts, and writers laboring in the  MarketWatch vineyard.

The GOOG in the Federal sector is a disrupter and a big player. Check it out yourself. Navigate to some Federal Web sites and see what search engine is used. Then get a tour of an agency like the Post Office or maybe one of intel outfits. Count the Google Search Appliances. Once you have some first hand data and look into the reseller methods, then give me a call so I can tell you my estimate of Google’s Federal government footprint. In the meantime, when you see a figure like $4,030 attached to Google revenues over a six month period, it ain’t even close.

Stephen Arnold, February 14, 2009


One Response to “Google Fumbles Government Ball”

  1. Google: Dilemma Possible in Federal Sales Push : Beyond Search on February 22nd, 2009 12:02 am

    […] The story that ran in MarketWatch about Google’s making only $4,000 in sales to the Federal government in 2008. I mentioned this in the context of a major news outlet’s amazing ability to create the impression that Google’s presence in the US government is only slightly more than buying a Kentucky influence peddler to get a road repaved. Ludicrous. Wrong. Uninformed. Why’s this important? Whoever wrote the story doesn’t know much about government procurements, the General Services Administration, and Google’s growing footprint in agencies. Not surprising. Most experts find their information via Google and calls to some well-worn contacts. Little wonder Google was positioned as an incompetent loser in the Federal market. Totally wrong. Refresh your memory of this write up here. My write up is here. […]

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