Google, Its Strategy, and Cost Cutting: Excitement Looms
July 15, 2015
I will not mention Loon balloons. I promise.
Navigate to “Google Product Strategy: Make Two of Everything.” The write up points out that Google’s strategy is a variation on the Doublemint twins trope. If one is good, two are better. More better. Just like Vonage.
The write up points out:
The company’s actions have shown it doesn’t really believe in focusing on a single solution to a problem, regardless of how much easier that would make things for users. It has to deal with external competitors in all sorts of areas, and Google seems to see no reason why competition can’t also come from within—Google products competing with other Google products.
Internal competition good. Revenue? Well, now that is the one point I found lacking in the write up. Doublemint twins are expensive. Imagine being a frat rat trying to woo both of the Doublemint twins. Twice the cost. Exponentiate the management hassles. Yikes. Talk about complexity between classes and on weekends. I stayed in the library. A simple college life for me.
Google has for more than a decade done many things. The Googlers have many interests. I understand. I have many interests, but I have learned at age 70 that one must bring discipline to make any progress.
After many years of effort, Google’s business model is based on the GoTo/Overture pay-to-play approach to traffic. Google, if I recall the Yahoo settlement regarding GoTo/Overture methods, did not invent its approach to online advertising.
What has played out over the last decade has been online advertising generating 90 to 95 percent of Google’s revenue.
The wild and crazy stuff has not, in my opinion, has not altered Google’s dependence on the online advertising business model.
How much more profitable would Google have been if it did not do the two of everything method? How much money would the company generate for stakeholders if some of the moon shots were put back in the hanger and the lights turned out.
Solving death. Great idea. Live forever. Well, maybe. Frittering away dough on YouTube and creating a mass of unfindable and often forgettable video content.
The write up mentions Android and Chrome. Google Glass and the wonky Google watch warrant a mention. The author identifies more than 10 additional duplications.
In my opinion, the big message is a lack of discipline. Now there is a new CFO who wants to cut costs. See “The five things Wall Street Wants from Google’s new CFO.” The write up also misses the mark.
Wall Street wants the revenues from the good old days. Go back to the hockey stick financials from 2004 to 2007. The company is, as Steve Ballmer said, a one-trick pony.
Google might consider taking a gander at the Sakai’s concept of bunsha. Those Xooglers are cranking out innovative outfits once they leave the GOOG. Some of these are going to do the hockey stick thing. (Sorry, no company names in a free blog, gentle reader.)
What’s happening is that Google is embracing the procedures of a high school math club. Now you can ponder the Loon balloons, elevators to space, etc. etc.
Stephen E Arnold, July 15, 2015
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