Comments for Is Google Spreading Itself Too Thin?

Is Google Spreading Itself Too Thin?

2008-09-24T01:40:48Z

Google's search advertising is the best cash cow ever invented for the Internet. None of the well funded alternative search engine contenders are able to put a dent into that dominance. But all of Google's other experimentation, all that frenzied innovation from their assembled brains trust, seems to be hitting headwinds. A tiny Indian company called Zoho is giving them a run for their money in Web Office and the latest report indicates that Knol is not even making a dent into Wikipedia. YouTube monetization is also hitting hurdles. We look at why all of this should matter to Google.

]]> Rounding Errors and Confidence

All these experiments are mere rounding errors in Google's financial results. So why does it matter? Confidence matters to Google. More importantly, the fear of Google matters. It is important to them that every initiative has the early adopters jumping on board and declaring the space that Google has just entered to be "game over" for the existing players. Then VCs won't back anybody in that space.

This game worked for Microsoft for decades. But the market is bigger and savvier today and the Internet just looks too darned big for any single firm to dominate.

The Bigger Game - Creating More Content for Search

One explanation for Google's almost anarchic experimentation is that revenue from those products don't matter. They just want more "search fodder" to feed their cash cow. That makes sense. Zoho is committed to being ad free, as is Wikipedia. They have different reasons for being ad free, but that is not what matters.

If Google doesn't dominate web office, they will only be offering advertising on those who cannot afford to pay Zoho their really low price - which sounds like advertising to the sub, sub prime market. If Knol cannot get content up to Wikipedia standards, advertisers will have to associate with sub, sub prime content.

That does not look like the strategy of a winner.

What About Chrome?

Chrome showed Google's brand power in the market. A pretty geeky story (better performance and sandbox security for plug-ins) got tremendous traction in the media and prompted people who had never even made the jump from Explorer to Firefox to look at Chrome.

But it is very hard to see any strategic advantage for Google in splintering the browser market even further. Surely their interest lies in making sure Firefox gains against Explorer? Why not simply continue helping Mozilla?

This looks like an engineering project (yes, a very cool engineering project) that got out to market with a "oh, well, why not, seems a shame to throw it away" rationale.

Has Boredom Become an Issue Inside the Googleplex?

It is almost as if Google is bored. The cash just keeps rolling in. How do they exercise those amazing minds? This is not an uncommon problem. My first job was with a small publishing company in London that had one amazing cash cow and lots of "loss leaders". I naively asked one of the owners why he did this, why not just have the cash cow? He thought for a while and said "well, what would I do every day?"

YouTube, Now That's a Biggie, Right?

Well yes, it is the dominant online video sharing site. However as an advertising business YouTube still has big problems and may still be losing money. At Web 2.0 I asked many people "how would you monetize YouTube?" and a surprising number came up with the solution of getting people to pay to upload. It sounds plausible, small amounts from millions of uploads might add up. But that is totally contrary to Google's mantra of free content funded by advertising and it would allow a "free to upload" competitor to potentially disrupt the market.

Is The Sum Bigger Than the Parts?

Google looks increasingly like a giant private equity firm with lots of unrelated businesses betting on one making it big.

About one year ago, an internal document by Brad Garlinghouse, a Yahoo senior vice president, said that Yahoo was spreading its resources too thinly, like peanut butter on a slice of bread.

Is Google doing the same? Albeit with a cash cow that is massively better than Yahoo's?

What do you think? Is Google spreading itself too thin?

Comment from Chinarut on 2008-09-25

2008-09-25T16:32:02Z

is it a challenge to leverage their existing resources, yes.

are they spread too thin, not in my opinion -it's a bit of a dance.

I think Google is doing the right thing by strategically releasing the products that need to be out there to give the market their best conceptual prototype of what a desktop and/or mobile experience should be.

I feel if they up the ante and further educate a select pool of Google evangelists out there like you, Tom and Gary, without leaving you in the dark in regards to where this is all heading - it's more power to everyone!

is it straightforward - no!

Comment from Kid Tech Guru on 2008-09-25

2008-09-25T11:05:35Z

Yes of course, Google is spreading itself too thin!

Comment from rod / techfold.com on 2008-09-24

2008-09-25T01:23:43Z

I got into this exact meme yesterday too:

...meanwhile, Google Labs, which should be their beta ghetto IMHO, looks more and more like where projects go to die - look at the update dates: of 14 projects listed, 11 haven’t been touched since 2006.

Google's got the luxury of cash flow. But it can only sustain them for a certain amount of time under the scrutiny of a public company.

http://techfold.com/2008/09/23/does-anyone-else-think-google-is-over-extending-itself/

Comment from Dwayne on 2008-09-24

2008-09-25T01:20:30Z

I think Google are just trying to get their name every place imaginable (even in real life).

No matter what Google does (even if it fails), it will always see it's experiments as another means of creating a fall-back when things don't go right.

Each experiment is a barrier protecting it's core search engine property. Besides, Google has so much money that they can just throw it away with experiments that might fail, but it doesn't matter too them. They also have the resources and worker momentum.

Comment from fjpoblam on 2008-09-24

2008-09-24T23:31:54Z

Yes, Google is spreading itself thin. One may see an example of this in mere support of current products and new products. If responses are garnered at all, they are all too often of the generic sort, "We're working hard on that" or "We'll get back to you on that." Notice how many Google products are still in "Beta" after all these years. Fruition. Start with doing a few good things well. Branch out, from there, one good, solid, substantial, well-supported thing, at a time.

Comment from Tom on 2008-09-24

2008-09-24T22:59:34Z

There are definitely some "warning signs."

As I mentioned before, it seems almost "bizarre" or "disconnected" that they launched all those Gmail "Labs" things.

Granted, some are useful (and should have been a part of the real release), such as scheduling away messages.

But, if you visit the "official" support group for Apps, Google's getting a lot of requests for the "basics," like a "Send-to" button in Docs, setting the default sending font in Gmail, and the (LONG overdue) "To-do" list.

I just kinda tip my head sideways when I see all those requests getting ignored at the same time a bunch of (presumably) well paid engineers are creating silly things like "Super Stars," and some silly game to embed in Gmail??

The point of this article, I realize, was "Is Google spreading itself too thin?"

I think the question is, "Can Google actually manage a platform that we, the users, can depend on?"

Comment from Gary on 2008-09-24

2008-09-24T22:29:30Z

Have to agree with Tom (#18). I, too, tried to be an "individual evangelist" for Google Apps, and feel like they left me hanging-out in the breeze once they got bored, and moved-on to other things.

Six months ago, I was practically drooling, thinking about being among the first to get a "G-Phone."

Even though I'm already a T-Mobile customer, and my contract has expired (I'm a "free agent"), I couldn't bring myself to click the "Current customers pre-order now" button.

I'm sorry to say that my "gut" tells me there's a 75% chance they're going to just walk-away, and move-on to something else (better rollerblades?).

Bless Bobby (#22), who points to the good things that have come-out of Google Labs, like Gmail.

However, last time I checked, it still says "Beta" - Google stuff is always in beta, even when it's at 2.0+

Comment from Nick on 2008-09-24

2008-09-24T21:35:56Z

The best thing for Google to do, at this point, would probably be to sell off its search business. I don't believe that there is really anything else they can do to add to it, or enhance it (it's more than likely maxed out, innovation-wise), so it has reached stagnation point.

They should recycle the funds and invest more in their online docs biz; that's where the money is now. I'm sure they could sell the search engine component off to MS for at least 200-300 million, and that would help MS with their plans as well. Seems like a win-win. We'll see what happens I guess.

Comment from Bobby McDonald on 2008-09-24

2008-09-24T20:50:14Z

I don't see the situation as Google spreading their resources too thin. Take the Google Labs for example. These are the majority of their beta projects that they allow everyone to try. The best ones are rolled out to widespread use (Google Docs, Gmail) and others that don't work very well eventually find their way to the dumpster.

Google is dipping into a bunch of different projects because they have the money to. They have the money to try a lot of things and then only choose those that show the most promise.

Comment from JuegosEnMovil.com on 2008-09-24

2008-09-24T19:50:07Z

Google wants to do all and it could be a problem, nobody can do all by himself.

Comment from Josh Cochrane on 2008-09-24

2008-09-24T19:17:39Z

There's a lot of inefficiency and dead-ending in Google's "be everywhere" strategy right now.

Fundamentally, though, it is reasonable to assume that text-based PPC ads, while dominant at the moment, are not the permanent standard for web advertising, and Google is right to be pushing aggressively to establish bulkheads in related and emerging areas.

Better to invent the alternatives that will make your current offerings obsolete than to let someone else do it for you.

Comment from Bernard Lunn on 2008-09-24

2008-09-24T17:40:27Z

# 9. HaHa. Actually a boring print directory called Graduate Opportunities.

Thanks Tom # 18. I was thinking I was the only person who thought this. I don't mind marching out of step for a while, but it does get lonely occasionally!

It would be interesting to just replace the name "Google" with the name "Yahoo" and list all the same initiatives. I suspect that lots of people would say Yahoo was spreading too thin and would be highly critical. Obviously Google has a better search cash cow than Yahoo. Are their other initiatives any better than Yahoo's, either functionally or as money-makers?

What you highlight looks like an attention span and focus problem. It's cool to do the Beta, but who does the relentless hard work of just making it better all the time?

Comment from Tom on 2008-09-24

2008-09-24T16:51:38Z

This article hits the nail on the head. I'm a long time fan of Google (and one of its first Apps Solution Providers), and have been finding it increasingly frustrating to watch them fiddle in so many different arenas, constantly wandering-away from half-done offerings.

It's amazing to look at a company like Zoho, which is running circles around Google Apps (and from India, no less)... Better (and faster) implementation of Google's own Gears is just the tip of the iceberg... So far, Google's only implemented it in its RSS Reader (where it's pretty useless, since most RSS feeds only include "teasers"), and a sort-of half-baked implementation in Docs (You still can't create new Docs offline, for example).

To this day, it's still missing in Mail, and Calendar, where it would have been most useful from the start.

And then, there's Gmail... Now, they've got a bunch of people goofing-around with new "Labs" features (including games), but there's still no way to set a default font for sent messages!?

I could go on-and-on-and-on, but I think it comes-down to an (almost) complete lack of competent product managers.

Nobody there seems to act as though they're accountable for a product - The engineers (as engineers will) just seem to "wander off" to whatever amuses them at the moment.

Unless they're just happy to let all the fruit rot, and fall off the vine, Larry, Sergei, and Eric need to wake-up & realize that brilliant engineers left to their own devices, eating free food, without product management, leadership & accountability, are not likely to ever complete much.

Comment from Steve on 2008-09-24

2008-09-24T15:50:29Z

Considering that Google will report record revenue and record net income I doubt Google is spreading itself too thin. Wall Street is notoriously impatient but I hope they are not that impatient. Chrome was released to the public just a short while ago and Knol has not been out that long either.

Comment from CoryS on 2008-09-24

2008-09-24T12:19:14Z

The real question:

Does Google have the managerial and operational focus like that of GE to ensure they garner above average profits from all these LT bets?

So far, there has only been the likes of WalMart and GE while hundreds of Fortune 1000s have collapsed on themselves in failure.

Comment from Eddie on 2008-09-24

2008-09-24T12:16:03Z

as Google's all service all most totally depend of Browsers so when Firefox became more bigger and suppress IE then they (Firefox) will asking for more better share of Ad revenue fm Google. so Google don't want to make it happened . but if Google has its own browser then google can secure to earn more money fm default seach . also using its own browser Google now can get more use info so that they can profile us more detail and accurately . that will really make AD Sense (though Profiling user will not be good for privacy) for that owning a browser definitely make a business sense.

Comment from Wolf Garbe on 2008-09-24

2008-09-24T11:11:47Z

Perhaps Google is attacking on a even wider front, beyond the browser and search war.
I think this is more strategic and beyond any short term revenue goals.

Google OS
Google's Chrome integrates Google Gears to make Google's online services work also offline.
I see this as an expansion into Microsoft's desktop territory (the only serious competitor being left).
Chrome could be Google's vision of an online desktop located on Google-Servers, sometimes also referred to as "Google Operating System".

Data collection
Besides this, Google is collecting (and possibly aggregating) information from various sources: Web Search, Desktop search, Google Talk, Google Analytics, GMail, Orkut, Social graph, Adwords/Adsense, Google Checkout, Chrome, Google Health, 23andMe ... No other entity has such complete insight into the (digital) life of our planet. Rich information about individuals, about connections between those individuals (and companies) and as aggregated trends. And People are generously revealing all those data.

What could be more valuable in the information age? Well, they are not yet market those data. But I see this as building up a solid foundation of a future business and power.

Comment from Raul on 2008-09-24

2008-09-24T09:44:39Z

I dont know, this kind of analysis emphasises the present at the cost of future potential and the strategic long term objectives Google may have, which will always remain elusive.

But given the kind of talent they have onboard I think it will naive to presume they are just throwing things out in the hope it sticks. Of course like the article this is speculation so it could be all wrong, but I do feel Chrome and Android are small pieces in a big puzzle that will unravel as time goes by.

Comment from Rich Osborne on 2008-09-24

2008-09-24T09:42:44Z

One thing that strikes me about Google is their ability to accurately predict future directions. Much of their developmential activity only makes sense after time, so can appear odd at first.

Interestingly with Chrome I've now adopted it at home for it's sheer speed. Taking the prediction idea above, and faced with an ever growing complexity in spaces like Facebook which are starting to slow browsers down dramatically, developing something like Chrome seems to me to be answering a question that no one has asked yet. Instead of waiting for web designers to make things faster, or perhaps more importantly for users to start complaining that browsers are too slow, Google has sidestepped them both by bringing Chrome out. I don't think people really appreciate that it's designed for the future, not for now.

Comment from Kamal on 2008-09-24

2008-09-24T09:28:38Z

Google search is the most successful product they own, but with the concept of one account for a variety of services; they have attracted most of the Google searchers to try/use most of their free products. I think Gmail and Blogger have helped them to produce so much space for their advertising.

As their main business is advertising, I don't think they would try to focus on one area and reach the top, rather would touch most of the areas producing different ways of advertising.

As a Google user, I'm pretty satisfied with all these free services.

Comment from jh on 2008-09-24

2008-09-24T09:26:45Z

I'm guessing your publisher's cash cow in the UK was Viz?

Comment from Time Tracker on 2008-09-24

2008-09-24T09:00:19Z

Gotta agree with some of the comments above. Google's spread is exactly one of it's strengths. I think it's a safe bet to say that a large majority of us either using gmail as our main account, or at least have a few gmail addresses. Hotmail? hotwho?

Just as stated above, Chrome got a media blitz and a lot of eyes focused on Google, yet again. I agree that it does seem a bit like a 'Well...it's built, why not just let 'em have it' project, as I haven't found anything with Chrome that's really mind blowing.

Given that Google does have one of the world's largest bank accounts, even if it was spreading itself too thin...heck, they've got the cash to do it...so why not?

Comment from Mike on 2008-09-24

2008-09-24T08:04:59Z

In some ways the Google spread is one of it's strengths.

Zoho is a great website, and their document and spreadsheet services are top-notch, but unless there is some specific feature of theirs that is needed, I still tend to use Google Docs.

The reason is that far more people have Google Accounts for easily collaboration, a public doc can be embedded easily in a Google Site, and there is familiar documentation for Google APIs.

As long as the services Google provides integrate well and enhance the value of its other services, the development resources are well placed.

Comment from firma on 2008-09-24

2008-09-24T07:03:53Z

veryy good thanks you

Comment from digitalizes on 2008-09-23

2008-09-24T06:34:50Z

Some of Google's projects outside of search may not have caught on in the manner initially expected, but they have always kept Google in the public eye. Whenever a new product or service is launched press coverage across the world is sure to follow and will remind anyone who may have forgotten that Google exists. Would we talk about Google so much if it only provided search results? I doubt it. Supermarkets do this all the time; they offer loss leaders to get people in store.

Look at the success stories though - AdSense, AdWords, Analytics, Gmail and Apps - that is were the really money is coming from. YouTube is way out there, but not making money.

What I love about Google is the way it offers these services for "free"; Google has empowered people around the world to make a living from doing something they love, be it blogging or selling stuff to niche markets, whatever it is it couldn't have been done five or ten years ago. Goggle has made a few mistakes along the way, but it has also made available some excellent services.

Yahoo! offers some excellent services too, but it does not brand them in the same way Google does. Yahoo! Del.icio.us, Yahoo! Flickr - doesn't sound right because the services have not been branded that way from the start. If they had, then competition between the two may be tighter.

So, is Google spreading itself to thin? No, I don't think so.

Comment from john on 2008-09-23

2008-09-24T06:06:36Z

yeah.. it does..
its not a wonder if someday google thinks to buy this planet.. lol :P

Comment from Mike Riversdale on 2008-09-23

2008-09-24T04:18:16Z

"Is Google spreading itself too thin?" - yes IF they leave all their experiments out in the cold. My view is that this is a year of joining up the dots for them in their effort to Facebook up the web.

They have somewhere for us to stick our words (Google Sites + Blogger + Knol), they have somewhere for us to say who we are (Google Profile), they have somewhere for us to store our media (Picasa + YouTube). They have something to help us find it all (Search). They have something to bring it all together (iGoogle). They have something for us to communicate (Chat + Groups + GMail).

In essence, all the bits of, say, Facebook, but disjointed.
But all on a much large scale that one single app.

They even have something similar (if not quite wide ranging) for enterprises (Google Apps).

All they need is something that "socialises" it all ... oh, Friend Connect!
(plus the crazily successful Orkut (successful in other places that USA, Europe and New Zealand - but I'm usure how that fits into it all).

If they manage

Comment from gregorylent on 2008-09-23

2008-09-24T03:35:34Z

natural cycles in all things .. it doesn't matter what you say as analysis, the flow goes on, in a natural cycle. everything that has a beginning, has an end ... it is a graceful thing ...

a quote from charles peguy, everything begins in mysticism and ends in politics ...

enjoy, gregory lent

Comment from Laurent on 2008-09-23

2008-09-24T03:22:47Z

Google wants to make sure people use the Internet: faster with chrome, anywhere with android.
They also need content, and good content is better (Google Books, Patents, Knol, Blogger).

These 2 things are what keeps ad revenues coming.

Apps and Gmail are there probably because they needed these tools anyway themselves: documents and email.

And because it's google, google engineers want to see large and not just build for google. So they release internally and then deploy to the world. It keeps employees' mental high: "we're doing big things at google"

Nothing wrong with that I must say.