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Mistakes & Learning True Differentiation

Before we get unnecessarily nostalgic for the kerrrazy days, we have already spoken about Google's need for change. Co-founders Brin and Page were just 27 years old when they decided to enlist the help of former Novell CEO Schmidt, then 47, to assist them in running their three year old company in 2001. Now both former boy geniuses are approaching 40 (Page below) and, like many of us, their youthful idealism is fast becoming more practical.

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This hasn't come solely through age, but also bitter experience. The company, which had long demonstrated a Midas touch, has seen a number of recent failures. Buzz failed to trouble Twitter, Wave failed to reinvent email, Knol proved no match for Wikipedia, Chrome OS could potentially do more harm than good to the perception of Cloud computing and Google TV has stalled dreadfully. What hasn't been hurt in all this, however, is Google's bottom line.

This month Google reported record Q2 revenues, beating all analyst expectations. Interestingly it was also the first full quarter over which Page has presided. Year-on-year Q2 revenue rose 32 per cent to $9.03bn and shares leapt 10 per cent to $581 dollars each. The figures were fuelled by Google's core business: ads, while 69 per cent of total income came from Google-owned sites. It was another example of Google looking inwards and realising that long term prosperity comes from core products.

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It is a model established giants like Apple and Microsoft know well. Microsoft in particular, always a target for the naysayers, broke its own Q4 financial records just yesterday on the back of mainstay businesses Office, Windows and Xbox. That doesn't mean Apple or Microsoft are failing to evolve. Both have recently pushed to embrace Google's obsession with the Cloud. Microsoft through Office 365 and Apple with the impending iOS5, but they are evolutions, not revolutions.

Likewise Google finally appears to be taking this advice to fix its biggest weakness: social networking. So far Google looks capable of success, something Page was desperate to emphasise in the Q2 results. "I'm super excited about the amazing response to Google which lets you share just like in real life," he proclaimed. Google isn't revolutionary, it is an evolutionary development of functionality from Buzz, Wave and 1 into a href="http://www.dailytech.com/Report Google Reaches 20 Million Visitors/article22227.htm">http://www.dailytech.com/Report Google Reaches 20 Million Visitors/article22227.htm potentially viable Facebook rival.

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For the first time Google is showing it knows not only how to capitalise on successes, but how to learn from failures. In turn it has become more cold, calculating and corporate, arguably less exciting and the 'Don't Be Evil' motto will be under closer scrutiny than ever before. The wide-eyed, innocent, kerrrazy Google has gone. So too has its determination to do things differently. It has grown up. It has realised the only necessity is to do them better.

raytr

July 24, 2011, 6:43 pm

Innocent or Innocence?

Gordon394

July 25, 2011, 3:54 am

A highly philosophical question!

Though I suspect you just spotted a typo?

Pbryanw

July 25, 2011, 8:25 pm

Yes, on the front-page no less, though as with most typos, by the time this comment gets approved, it'll probably be fixed :)

(As an aside, very much enjoying these frequent opinion pieces - though he'll be missed on news, I think Gordon's new role makes up for this.)

Gordon394

July 26, 2011, 5:17 am

Very kind Pbryanw. I cannot say opinion pieces will always be quite as frequent as they are currently, but they should certainly be at least weekly. The aim being to cherry pick and analyse the most interesting topic of the week's news.

Daniel Gerson

July 29, 2011, 5:02 pm

A very good piece of writing.

I think it's incredibly challenging for big companies to keep their corporate culture. Fortunately/unfortunately most big companies will fail with time. It's simply too difficult to be bold when designing products by committee. The path to either dinosaur, graveyard or alternatively being bought out by a new rising star seems inevitable by a corporations own design.

Having said that I think Google has faired better than most. I think practices such as their 20% alternative work week have been paramount here. How many companies do you know that practice this or even have copied Google here? So I think Google might be on form for as long as the original shareholders are inside the business.

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