Google Gazing
I was chatting with my roommate, Pierre, the other day, and I somehow got into a protracted rant about shifting perceptions with respect to Google. The release of Google Talk seems significant in this context since it has no obvious relevance to their stated mission of organizing all the world’s information. Of course, you could argue that a lot of information is holed up in chat messages, but I can’t see how releasing its own IM client will help Google stay on top of this. Add to this the lukewarm reviews the new app has received and you have to wonder: is Google flailing?
Then there’s the New York Times article from last week entitled: “Relax, Bill Gates. It’s Google’s Turn as the Villain” :
“I’ve definitely been picking up on the resentment,” said Max Levchin, a founder of PayPal, the online payment service now owned by eBay. “They’re a big company now, doing things people didn’t expect them to do.”
Mr. Levchin, who last year founded a multimedia company in San Francisco called Slide, said Google “still has a long wick of good will to burn off,” but he added, “I’m surprised at how fast the company’s reputation is changing.”
Bob Cringely weighs in as well, wondering “Has Google Peaked?“:
But what if everyone is mainly wrong? What if search and PageRank and AdSense are Google’s corporate apex. Most companies would be content with that, but Google isn’t supposed to be like most companies. But what if they are? I hear a lot of talk about Google doing deals for video and music distribution, but where are those deals? So far it is all just talk.
I hope Google does pull off a couple more spectacular product feats, but I won’t be all that surprised if they don’t. It will take the company another five years just to mature the businesses they already have.
Perhaps the most damning evidence of this trend (and certainly the funniest, by far) is this South Parkesque comic posted to Microsoft’s Channel 9 website. It’s easy — so easy — to mock the naïveté of Larry and Sergey’s “Don’t Be Evil” motto.
My take: I wouldn’t write off Google just yet, but they are going to have to reinvent the business in a big way if they are going to make good on people’s expectations of their future financial performance. I just don’t believe that they will be able to drive strong growth forever with a model based almost entirely on advertising. I think that Cringely is right that they need to move into media sales, but it isn’t a no-brainer that this will be successful. I definitely wouldn’t be in any hurry to buy their stock at the current price.
The other lesson: it’s very hard for an ambitious, fast-growing company to “not be evil.” It’s even harder not to be perceived that way. Look at Apple: they have the cultish devotion of millions of Mac and iPod users, but they still do evil stuff, frequently. But they don’t take as much flak because they didn’t paint a big bull’s-eye on their back. Further proof that, no matter how smart your company founders are, you might not want to put them in charge of PR.
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