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Big Company-itis
This isn't going to be a long and thoughtful post on Google (GOOG), just some observations which hopefully I'll come back to and mine for more depth.
Google is a different company than it was even a year ago. It's still got the world's best search engine and I use it maybe a hundred times a day and really can't think of not using it. It's like firefox, a fundamental part of my daily web experience, a starting point for most anything and everything. Search for Google is like Windows for Microsoft, it's the product that pays the bills for everything else and is ubiquitous.
That said, YouTube was the beginning of the end of old Google and the beginning of new Google. I personally love that Google bought YouTube, because I love YouTube and everything it's about. But that was the line in the sand that Google crossed with the media owners. Google is now public enemy number one with content owners of all kinds. Witness Sam Zell saying that "Google steals newspaper's content". That is just not true. But the claim that YouTube (ie Google) steals Viacom's content rings a bit truer (I also don't agree with that statement). Google is big, powerful, and rich, but it's also now in the same shoes as Microsoft was in the 1990s. They are the big powerful company that everyone hates (not me).
Look at the DoubleClick deal. They outbid everyone. That's what Google can do. They have the big pot at the table and can win by just making it too expensive for anyone else to play. But the losers are going to get their revenge by calling in the Feds to look at the deal. Google's lawyers are going to become their most important asset and when lawyers are more important than engineers to a company, you lose.
Finally, Google is losing engineers, at least some engineers. And the "HR acqusition" model may be losing its effectiveness for Google, because they cannot give every project the attention that it would get as an independent company. Just look at the Dodgeball founders exit interview to see what I mean. These guys sold their company to Google and then watched entrepreneurs who had more freedom to innovate beat them to the promised land.
Big companies are not the best places to innovate and guess what, Google is a big company now.
April 16, 2007 in Venture Capital and Technology, stocks | Permalink
Comments
I had coffee a few weeks back with a mobile industry vet felt that GOOG has no comprehensive mobile strategy at all. There are several competing mobile groups within the organization, each has a different, and not necessarily complimentary strategy.
I don't disagree.
Posted by: Erik Schwartz | Apr 16, 2007 7:47:58 AM
For Google, its about instilling "big co" management practices, like GE, to handle all the initiatives and disparate teams. Strategically, Google has identified a solid acquisition strategy.
Tactically, successful acquisitions have a 100-day plan of execution for integration. In looking at the news release, the YouTube acquisition was in October '06. What were the anticipated goals of the merger and how have they been realized? I'm not close enough to know whether they've integrated the Goog Video team with YouTube and migrated the services operationally.
Along those lines, DoubleClick is another strong acquisition target for Google. What are Google's goals for the acquisition in its first 100 days both financially, operationally and strategically?
Agree that these are big business issues.
Posted by: CoryS | Apr 16, 2007 9:31:49 AM
Google may or may not have a mobile strategy, but those Dodgeball guys are just
Posted by: Scott Yates | Apr 16, 2007 11:28:07 AM
Google may or may not have a mobile strategy, but those Dodgeball guys are just big whiners.
(And my HTML is rusty, sorry about the duplicate posts.)
Posted by: Scott Yates | Apr 16, 2007 11:30:40 AM
Look, Google is an advertising company. They've been masquerading as a search company for some time now, but now everyone is realizing that they serve ads for money. They're looking to take over the advertising world, both online and off.
That will obviously make them a very large company with very large ambitions. If you read Shelly Palmer's blog, you know that TV advertising is around a $70 Billion business, and a lot of this will eventually shit to online advertising.
Google is putting themselves in place to get a large chunk of that. That is sure;y going to give thm a bad case of "big-company-itis."
Kimberly
Posted by: Kimberly | Apr 16, 2007 1:13:24 PM
"They have the big pot at the table and can win by just making it too expensive for anyone else to play."
But c'mon. It's not as though Microsoft are hurting for cash. They just didn't apparently have the balls to get the deal done. As many folks have noted (and you hint at), their behavior is EXACTLY the kind of thing MS used to do. The "soft" in Microsoft used to be anything but. I just wonder why that changed...
Posted by: fewquid | Apr 16, 2007 1:36:21 PM
Fred, this has to be the most priceless phrase ever written on your blog:
"TV advertising is around a $70 Billion business, and a lot of this will eventually shit to online advertising."
[from Kimberly, above]
And I actually think that this typo hits on the most important business change that the Internet can force: the shift of marketing from nuisance to utility.
If TV advertising does in fact "shit" to online, brands will have missed a huge opportunity to redefine themselves as functional members of society instead of annoying hucksters.
People recognize that Google is one crazy advertising machine, but it's obvious to me that they got there by tactically "not being evil." The only way you can communicate to consumer markets is through a messenger that they trust. Trust is the only thing that matters.
Anyways, the whole "legal advantage more important than strategy/engineering advantage" conundrum sucks. I hope Google can juggle this because I so so want the "Don't be evil" strategy to work. What an incredible precedent to set [for the sake of humanity].
In general, it seems like this "redefinition of property" thing is going to take a while and be pretty bloody.
http://www.benkler.org/wealth_of_networks/index.php/Main_Page
Posted by: Ethan Bauley | Apr 16, 2007 2:59:13 PM
You are right on. Having been competing with Google and Microsoft for a long time there is a pretty obvious switch that happens when companies get so large. Namely, they need to start telling the world exactly what their game plan is - its the only way to develop the ecosystems that justify their size. Makes it hard to be very crafty when you are forced to publish your playbook.
As a veteran of a few acquisitions of medium stage start-ups, I can tell you that its almost impossible to get right. If you think Google is going to be any better at it than the average company you are kidding yourself.
Posted by: Steve | Apr 16, 2007 8:33:08 PM
What is more important is what this move says about the current strength of the NY tech community. Great that Dennis and Alex saw better opportunities outside of the goog...in NY nonetheless. Looking forward to seeing more folks spin out of goog NY -- and perhaps being drawn back into goog's orbit at a later date.
Posted by: Adam Erlebacher | Apr 16, 2007 11:08:32 PM
Google is a big company with Web services in its DNA, the same way Microsoft is a big company with packaged software in its DNA. Right now, we're moving from packaged software to Web services.
At least until the Web services model is superseded, I'm rooting for Google.
Posted by: Mike @ Emerging Earth | Apr 18, 2007 4:02:13 AM
Sometimes I think people and companies are prone to become what they dislike.
Posted by: captain flummox | Apr 18, 2007 11:32:58 AM
"Sometimes I think people and companies are prone to become what they dislike."
Just like children that don't want to grow up into adults and be like thier parents.
Posted by: James | Apr 20, 2007 5:59:45 PM
That two lazy hipsters would find Google not to their liking is definitely a good thing. From what I can tell, Google has little dead wood yet (at least in engineering), but those two would qualify.
Posted by: Thomas Reuber | Apr 20, 2007 11:28:53 PM
