The Future of Google: Search, Sales, or Showmanship?
June 28, 2012
The news “thing” makes me nervous. Mr. Murdoch wants to sell his “real” journalist news properties it seems or he wants to take some other action. Bloggers are reporting on events in near real time, confusing me with reports of various events which, in most cases, have little significance in the world of the addled goose in rural Kentucky.
I wanted to raise one question, triggered by the flood of information about Google’s demonstration day at Google I/O. “What is Google?”
I am okay with whatever Google does. The company does not have a material impact on my life. For many, however, Google is the Alpha and the Omega of “the future.”
I scanned the Thomson Reuters’ “news” story “Google Goes Up Against Amazon, Apple with Nexus Tablet.” The main idea is that Google is—yawn—in the hardware business, competing with Amazon and Apple. This is new information? Hardly. I also took a look at “Project Glass Demo: Hangouts in Air.” How does skydiving improve the relevance of the queries I run on Google? Ah, future improvements when I jump from an aircraft and want to locate a doc in the box.
Let me step back.
First, Google is dependent on advertising for revenue. I read but do not fully agree with the assertions in “IgnitionOne: Growth Slows For Paid-Search Spend.” For the sake of intellectual joy, let’s assume that:
Marketers continue to allocate budgets to U.S. paid-search advertising campaigns, but growth slowed to 15.5% in the second quarter of 2012, compared with the prior two quarters. In Q4 2011, paid-search ad spend grew 22.4%; and in Q1 2012, 30.3%, according to a quarterly report that IgnitionOne will release Thursday [June 28, 2012].
I keep trying to relate Google’s hardware and technical sky diving to ad revenues. Frankly, I am coming up a few cans short of a six pack. Google can generate ad revenue by participating in large markets. A good example is China. Oh, I almost forgot that Google has created a bit of tension between itself and the Chinese government. There are quite a few Chinese mobile phone manufacturers using Android, but these phones don’t generate direct ad revenue for Google. I wonder if that gap can be closed. In the hardware game, Google has pitted itself against Amazon, Apple, and Microsoft. In general, I wonder if there might be more revenue to gain with positive relationships with these firms. Oh, I almost forgot that a scorched earth policy is being used with these three giants. Well, let’s hope that ad revenues are not softening because selling hardware can be tricky. I wonder if Barnes & Noble has cracked the code. Oh, I almost forgot that the classic middle man bookseller may be losing money on hardware.
Second, Google has been generating some interesting rhetoric about Google Plus. The most fascinating example boils down to one word in an write up featuring Vic Gundotra I believe. The post does not have a title, but you can read the French language version on the GPlusProject subsite. The key word is the description of Google Plus as a “small project.” Note that the French word petite does not appear in the French version, which is interesting. The English version is here but may go dark. Now the passage:
A year ago we started a small project called Google+—to bring friends and family closer together, and to inspire new connections through meaningful conversation. Today more than 250 million people have upgraded to Google+, and we want to give thanks. To you. It’s your support and your voice that give the service soul, and we’re grateful.
Small is an interesting word considering that Google Plus, according to Larry Page in his 2012 CEO letter:
Google+ helps solve this problem [next generation search] for us because it enables Google to understand people and their connections. So when I search for Ben Smith, I get the real Ben Smith (for me), right there in my search box, complete with his picture. Previously, the search box would just have had the series of letters I had typed, with no real understanding that I was looking for a unique person. This is a huge and important change, and there’s a ton more work to do. But this kind of next-generation search in which Google understands real-world entities—things, not strings—will help improve our results in exciting new ways. It’s about building genuine knowledge into our search engine.
Google+ is fueling Google’s compensation program. Google+ is being integrated into various Google services. Google+ is destined to be a Facebook killer. Oh, I forgot. Facebook has user contributed data, 900 million users, and a number of opportunities to pursue. Facebook can fumble the ball, but Google is playing catch up. So what’s with the word “small.” These are definitely big points, big investments, and big strategic “me too” moves. Point of fact: Google is doing the me-too thing with Apple, Amazon, and Microsoft. Even Google’s ad system was a me too of the Yahoo Overture method I believe. So “small” seems to be a bit of rhetoric borrowed from Joseph II. Kingly but wide of the mark.
Third, Google has a number of challenges to resolve. These range from calming some real journalists’ concerns about Larry Page’s health. See, for example, “Larry Page’s Lost Voice Provokes Widespread Worry.” There are dust ups with various regulatory authorities. See, for example, “Italy Antitrust Chief Warns of Google Publishing Monopoly.” The mini flap over Jeff Huber and his ability to deliver the revenue goods on time and on budget. See, for example, “This Exec May Have The Hardest Job At Google, And His Colleagues Are Tired Of Seeing Him Get Trashed In The Press (GOOG).” My reaction is a question, “What is Google?”
I no longer track the company’s every move. I do pay attention to certain interesting technology hot spots. When I was asked this question earlier this week, I had to reply, “I don’t know.” The person asking me the question told me, “Well, Google can continue to grow its online advertising revenue.”
I agree. So let’s see more robust growth. With talk of monetizing everything from YouTube videos to blasting ads at mobile devices, and nesting a results list in a frame of sponsored messages, I suppose revenue is the yardstick that matters. Oh, I almost forgot about cost control. Google, like Amazon, is doing a Wallenda stunt. The balance between revenues and costs is what * really * matters. Tightrope walkers wear safety lines just like Googlers wearing parachutes. A safe landing is important for the Googlers. If one accepts the odd assertions of ace venture capitalist Bill Davidow, writing in The Atlantic’s “What Happened to Silicon Values?”:
Internet consumers get locked in to one company and find it difficult to escape. In the process, they lose their power.
What’s the future look like through Google Glasses?
Stephen E Arnold, June 28, 2012
Sponsored by Polyspot, Insight enabling infrastructure/solutions
Comments
-
- Subscribe to Beyond Search
Feature archive
News archive
-
