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Analsys & Opinion My Shout Google yet to translate search success to other markets
Analsys & Opinion My Shout Google yet to translate search success to other markets | Google yet to translate search success to other markets |
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| by Stan Beer | |
| Thursday, 01 June 2006 | |
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Schmidt reportedly contends that mergers and acquisitions to buy traffic is a bad business strategy and does not match Google's values as a company. That's nice motherhood stuff but try telling Rupert Murdoch that mergers and acquisitions in order to expand the company's reach was a bad business strategy for News Corporation. He might disagree. It goes without saying that Google is a phenomenally successful company. However, search and the advertising it generates is still the only business that Google has built up to the point of domination. It's true that search is a very lucrative game, as Google's fast growing pile of cash demonstrates. However, despite releasing a bevy of web services products and trying to move into the content space, Google has not yet made a serious impression in any market other than search. While talk abounds of possible mergers involving various subsets of Microsoft, Yahoo and eBay, Google has remained aloof, maintaining a go it alone stance. Perhaps the Google brains trust believes the company's near 50% share of the search market makes it invulnerable to even the combined forces of major online competitors. If so, then it may be suffering from a bout of over confidence. When one thinks of news, finance and other online content, one thinks of Yahoo. When one thinks of instant messaging, it's Microsoft, AOL and Yahoo. Google also lags way behind Microsoft and Yahoo in web email. When one thinks of online retailing and auctions, one thinks of eBay. Music downloads? iTunes. Books? Amazon. Those are a lot of markets that Google doesn't own or, in some cases, even play in yet. And the competitors are formidable and very innovative online companies themselves. It would be hard to believe, however, that Google does not take competitors like Microsoft seriously. While Schmidt dismisses the desktop as less relevant in the age of search advertising, his words are belied by Google's actions with Dell last week. There's no doubt that Google thinks that the desktop is extremely relevant if it is prepared to spend a purported US$1 billion to be on Dell's desktops for the next three years. And, despite Dell's strong position in the PC space, the vast majority of desktops are not Dell. Creating a new market through innovation is something few companies ever achieve. Google is one of them. Although it's possible to repeat its phenomenal success with search in other markets, the odds are against it. Where the internet is concerned, there are a lot of innovative companies. Google bought one not too long ago called Writely, which has developed a web-based wordprocessor. With its growing bank account of billions, it's a fair bet that Google would not be averse to a few more strategic acquisitions. {moscomment}
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