Google has lost it’s edge
I was reading over at Amr Awadallah Blog that Google’s earnings were supposed to grow by 30% and they only grew by 22%. What caught my eye was
“Google also increased and plans to increase its spending significantly. They hired 700 more folks in Q4, they doubled their sales and marketing spend (over 2004-Q4), and they said their expenses are likely to rise significantly as they invest in long term projects.”.
Now that Google has so much money and pressure to do something big, they feel that they need to spend it. They don’t think like they used to. People will one day realize that Google is not going to be a Microsoft, ever. They have a nice little niche and that is search. They are by no means a power house like Microsoft. You can only go so far with search and their current way of generating revenue.
What they are doing now is trying to figure out how to make more money outside of what they know. The chance of Google hitting some new break-out way of making money and growing is no bigger than any other company with lots of money. They only have success in one area and that is search and ppc advertising. Anything else they do is a stab in the dark. Sure maybe Del Monte could come up with there own brand of computer but that is not what they know. They make green beans.
The people investing in Google have no idea what the company really does or is capable of. It is the 90’s all over again. It will be ugly when it all falls down. They are spending tons of money on all kinds of projects and they have no idea if those projects will generate revenue. Everything they make they offer for free. When has that ever been a successful business model? They will always be known for search and will always be the most searched website but that is a company with one product. They give things away for free and put advertising on it. That is all they do.
Sorry, I was looking up arguments that Google will one day fall from it’s grace. As Microsoft was once in a specific economic market (Computers) and then branched out and found a new Home as Playstation. Recently Toshiba, Acer, Macintosh, and Linux are diluting Microsoft and I would be surprised to see it dissipate.
Although I was wondering what you think now? As that Google has become a massive market. Making Phones, Computer Apps, Browsers, and Email… It does so much more then this to. I was thinking either it is becoming massive and the government will nerf it… But there is a chance that it is spreading to find a new niche to survive will competitors gone like Yahoo it seemed unlikely but Baidu is growing at an unfounded rate.
Just curious.
I can only speak for the search market. Google has a ton of cash and they are trying very hard to get into lots of other areas. I still think that Google will keep their market share in search. Just like MS has tried to do so many other things but has yet to enter another market and dominate like they do the OS. MS & Google could lose their market share if there is a huge shift in the way the Internet works. The only way this could happen is if something changes how we get information. Google means search for most people and they won’t lose ground because of that. Even people who don’t have internet at home use the term “Google” when they refer to getting information.