

Is Google heading down the Yahoo path? - swombat
http://www.sitepoint.com/blogs/2008/07/12/is-google-heading-down-the-yahoo-path/

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jnovek
Perhaps the big difference between Google now and Yahoo then is: Google has
more cash than they know what to do with. They aren't "taking a gamble" on
some new markets, think of it more like VC. As long as they monetize a couple
things in a pile of ideas, they win.

I think they do a pretty good job of keeping it from diluting their brand,
too. Somewhere after GMail and Google docs, they stopped branding stuff
outside their search business with a big bright Google logo -- rather, most
things keep their own brands (YouTube, Lively, Orkut, etc.) even thought they
are Google companies. As a result, if I ask my mom, "What's Google for?"
She'll say, "Looking stuff up on the internet."

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fauigerzigerk
The problem is that they are not seen as a VC. So when one of their projects
fails people say look google has failed, they are losing their focus, they
have peaked and now they're going down.

And that means more money will go into stuff that google competitors are doing
because now they can say to their investors, look, google can be beaten.

They will stop selling their businesses to google at the earliest possible
moment. More startup founders will be willing and able to go it alone, and
fewer will want to go work for google just to watch their baby flounder like
all those other half hearted me too projects.

There's another reason why they cannot act like a VC. Much of what they do
needs size and network effects. If people doubt that a particular app has a
future, it doesn't get traction, which means it's not going to get big fast.
An app by a big vendor that doesn't get big fast is not geeky and cool, it's
dead in the water and totally uncool.

Microsoft has lost its influence long before their profits started to go down.
That's why google absolutely needs focus and they need to be very convincing.
They need to be so cool and then they need to say, oh and by the way, we'll
crush any competition, so don't even try!

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jnovek
First, let me say, your comments are very insightful. You force me to amend my
position a bit. :-)

Regarding your first point -- you are right. Google can't really be like VC.
As a company, they are not expected to have failures. Looking at their trading
history in 2008, it looks like concerns over stuff like monetizing YouTube is
kicking them in the reputation.

I think, however, that they are also suffering from a thing that the media
loves to do -- turn in its darlings. Once a "gee-whiz" media baby stops being
exciting because of its newness, it is popular to try to take the "darker"
angle on it. I think this started in the geek community with the Google in
China business a few years ago, and now it's hitting the wider world. I think
this would be a problem for Google regardless of their product strategy.

I also suspect that, while Google can't be like VC, they're not really like
normal companies, either. I think people expect them to be a little more
experimental and to fail a little bit more often -- although, on a smaller
scale than YouTube. I think that people still think, "Small failures from
Google are just signs of progress." It probably wouldn't hurt them to be a bit
more conservative right now with their stock taking a dive.

Finally, I don't think that Google has lost their geek-hipness just yet. I,
for one, still think tha Google spits out a couple interesting services every
year. They aren't us cool as they used to be, and the Google cool factor will
probably wear off for them eventually. But, as one of my co-founders says,
they can "burn that bridge when they get to it."

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apathy
Remember that 'Black Swan' article from a few days ago?

Minimize your downside extremal risk exposure, and maximize your upside
extremal risk exposure (20%, Lively, etc.)?

Well, the writer of this piece apparently didn't. The instant any of these
things starts draining resources directly from their core business, then GOOG
investors can start panicking. Meanwhile, the GOOG seems to have taken the
lessons of the market to heart. Not unlike YCombinator -- lots of little
dollops of money into little baskets, most of which will never be seen again,
but a handful of which can generate such absurd upside that the foregone
dollops are but an afterthought. Google seems to get this.

You'd think their entire business was originally based on probable inference,
or something...

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vaksel
To me Google has the core search and advertising down stat. They have that
monopoly and will do anything to keep it.

But like someone said they have so much cash and so many employees they can
afford to get into every single market on the web. If it succeeds? Great, more
money to the bottom line. If it fails? Oh well, we only lost .000001% of our
resources trying for it.

And if its really a business they want to get into, one where they'll get a
lot of pageviews for their ads, they'll just buy up the competition. Because
they can afford to pay 100 million without really flinching.

~~~
adrianwaj
Last point sounds like Yahoo.

Google should actually setup an incubator for external extrepeneurs, providing
funds, infastructure and a supportive community - imagine the dealflow and
ideas it'd receive.

It already has a VC:

[http://www.businessweek.com/technology/content/sep2007/tc200...](http://www.businessweek.com/technology/content/sep2007/tc20070831_697591.htm)

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jrockway
If Google didn't come up with new things once in a while, the article we'd be
reading would be called "Google is boring me" and the thesis would be "why
doesn't google come up with anything new? they must be dying."

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ashleyw
Google has been like this for a long time. And its one of their biggest assets
in my opinion!

Microsoft needs to keep a good focus. But Google and Yahoo? I don't think so.
Obviously they shouldn't do something really unexpected, but if they can carry
on improving and creating apps/sites - why the need to stop?

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sanj
Google considers everything it does a mechanism to get folks to use Google's
properties and to create more ad-revenue.

A TV network analogy would be that Apps, Lively, Earth etc. are programs. We
tune into Google because it has the best programs. And then get served ads.

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swombat
Google have always said they had no interest in producing content
themselves... some of those products are definitely reversals on that
decision. That may be the right thing to do, but it's definitely a change.

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edw519
_What do you think: is the search giant losing focus of their core business?_

You have it backwards. It's the strength of their core business that enables
them to make big bets on the future.

They've gotta know as well as anyone: in this industry if you milk your core
business too long, it may become a dinosaur too quickly for you to react.

~~~
j2d2
This matches my reaction too.

To elaborate a little, I don't see any attempts at other markets as a bad sign
from google or as behaving yahoo-like as long as they stick to their core
principles of simplicity for everyone, including the power users.

