Technology 13 Aug 2006 08:00 am
Google's new product "stickiness" doesn't matter
Recently I read an article in Business Week about Google ("So Much Fanfare, So Few Hits") and I found myself agreeing with the premise that Google certainly does release lots of new products and services — none of them as popular as their main site — but each probably gets a ton of traffic by themselves. So relative to www.google.com, they're tiny, but when the comparison is not made, they could be huge.
But these comparisons are ultimately superfluous. Allow me to explain…
Much ado is made about Google's 80/20 time. You've all heard about it: 20% of a person's time may be spent on personal projects of their choice. Google News, Gmail, and several other popular Google products came out of this 20%. The 20% keeps engineers happy by allowing them to work outside their primary focus, and it gives Google some new products.
A visit to Google Labs shows off some 12 "graduates." and many more still in-progress. Probably all of them cooked up in that 20% time.
I don't use all of Google's services — I have no use for all of them — but I do use a fair number. Gmail, AdSense, Google Scholar, Google Earth, Google Maps, Google Calendar, etc. to name a few. I find it easy to remember URLs, but not everyone else does, which could be why their secondary services don't gain the traction they otherwise might: Google doesn't really advertise their new products and services outside a limited scope (their blog which filters to the MSM and blogosphere in general). And we all know how long the Internet's collective attention span is…
Froogle and Google News are the notable exceptions. I think Google will try to solve their traction problem in the next 12 months: they're already beginning to integrate some services that you've already signed up for into your Gmail account. (Look in the upper left.) A rotating "Have you tried Google Blah lately?" that advertises Google services on the side of their home page might do wonders for increasing visibility without decreasing whitespace too much.
Why doesn't a high failure rate matter? Because the projects cost very little capital investment to create — they were created in engineers' spare time — and because of what Eric Schmidt considers one of their greatest physical assets as a company: their massive grid computer. Google has several hundred thousand computers working for them — the exact number is highly contentious and secret outside Google — set up in such a manner where if one fails, it is replaced and the rest of the grid picks up the slack.
It doesn't matter what you run on top of the platform once it's in place. That's why Google can keep throwing service after service onto the pile and it doesn't matter if most of them fail because the cost of maintaining them is negligible: the grid is running whether Google Product du Jour running on top of it or not. With plenty of capacity, there's no compelling reason not to keep adding to the list of products and services: users will cherry pick their services of choice.
Google remains an interesting company, if for no other reason than they let products thrive (Gmail) or wither (Orkut) on their own merit. Google doesn't need to start turning off services yet because their data center capacity is growing faster than their computing needs. They also don't need to worry about paying dividends on their common stock, which allows them to use their money more aggressively: they don't need to share it with investors. (Remember what happened when Microsoft said they would be spending more in R&D than analysts expected?)
Could you really see Microsoft letting the whims of its engineers dictate new products? That seems to be the difference between top-down vs. bottom-up management. Admittedly, I don't know much about the management culture inside Microsoft, aside from what I read in the press, so I could be completely off-base here. But I doubt it. When was the last time you saw a Microsoft product come to light that upper management didn't invest millions to make successful?
Now compare that to Google which uses the inherent public interest in their company coupled with PR in the form of their official blog to launch their new services. No expensive PR firms required. Some stick, some don't. Most are pretty good. In aggregate, no other company in the world has the array of web services that Google does. Not all of them are best-of-breed, but for people like me who would rather have a one-stop shopping approach linked under one account, they don't need to be: They just need to be good enough.
Further reading: AT&T Labs vs. Google Labs: not your grandfather's R&D
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on 14 Aug 2006 at 10:52 pm 1.rianjs.net » My favoritest software of all time said …
[...] I touched on this yesterday. I should probably give the full list of the Google applications I use regularly, if I can remember them all — my favorites are italicized: [...]
on 15 Aug 2006 at 4:36 pm 2.Emerging Earth - Google - What Lies Beneath said …
[...] Source: So Much Fanfare, So Few Hits Source: Google’s new product “stickiness” doesn’t matter [...]
on 16 Aug 2006 at 7:05 am 3.Hashim said …
I left a comment like this elsewhere, but I'd like to repeat it here:
Orkut could have been MySpace, if developed properly.
Google News could have been Digg, if developed properly.
Google Video could have been YouTube, if developed properly.
The company is missing out on many opportunites because of their haphazard product development. So, even though their current strategy is cheap and keeps engineers happy, they've missed out on some huge opportunities outside of search. Actually, I think search is keeping them fat and lazy.
on 17 Aug 2006 at 11:30 am 4.Benton said …
The problem is not so much that they can't continue to generate programs and services that people will use. Clearly they can do that. I believe that from the perspective of Google as a viable company, they are completely and utterly dependent on search for revenue. And search is completely and utterly dependent on people using only Google for search and not trying out and liking any other search engine better. The vast majority of their money is reliant on a product with no switching costs to the consumer.
I realize it is hard to imagine anyone approaching their juggernaut of a search engine, but it was also hard to imagine anyone approaching Yahoo's share of search back when Google overtook them.
If search loses traction, the house of cards falls.
on 17 Aug 2006 at 12:01 pm 5.dmd said …
>There have been some industry analysts lately who
> have called into question Google's real success,
> claiming that while Google's search remains a big
> winner, it has missed the mark when it comes to
> generating profitable, secondary products
Ummm…doesn't google make 95% of it's profit from Adwords? Fair enough search put them there, but they don't make much from that.
Pretty off the mark here.
on 17 Aug 2006 at 12:09 pm 6.feha said …
If Google would take over all services than it will compete with other companies advertising on Google.
In my opinion they don't want that.
If Google would offer all possible services you can imagine what others would do ??
It would be like one single human on the Earth, boring.
on 17 Aug 2006 at 12:29 pm 7.Rian said …
AdWords is most profitable when it's triggered via search, not AdSense. (In fact, if you're an AdWords customer, you can opt out of having your ads shown by AdSense.) Something like 30% of Internet searches are commercial in nature: people looking to buy something. This is where AdWords shines. Without search to power AdWords, there would be no Google.
They are two parts of the same equation.
on 17 Aug 2006 at 12:46 pm 8.AndréB said …
Who said that Orkut failed? I don't know in other places, but here in Brazil Orkut is doing very well. I teach at an university and in all labs the students use Orkut. We are even considering banning access to it due to the time they spend on it…
I heard that Orkut is not so well in other countries due to the overwhelming presence of Brazilians. They tendet to use portuguese instead of english in the conversations and thus 'scared' away other people.
on 17 Aug 2006 at 12:48 pm 9.Rian said …
Yes Orkut's huge in Brazil. And that's the only place it's huge. Compared to Facebook and MySpace and LiveJournal and the other social networking sites, Orkut's insignificant.
MySpace dominates social networking more than Google search dominates web searching.
on 17 Aug 2006 at 12:49 pm 10.Rian said …
Incidentally, welcome Slashdot readers. Akismet is a little overzealous when it comes to spam. As I must leave for work where there is no Internet access until 9pm EST, some comments might get flagged as spam. I will sort through them tonight and approve them all as soon as I get home.
Thanks for your patience.
on 17 Aug 2006 at 1:25 pm 11.Jimi said …
I think you miss the point. Nobody is arguing that the failure of most of their non-search products is harming the bottom line in any significant manner. The problem with their failures is that the Google stock price and analyst expectations have priced in significant growth in the non-search areas. Everytime they release a new product, it's hailed as a "____-killer" but they have not killed anybody. They dominate search and little else. And their position in search is maintained primarily through the loyalty of their users and their reputation. In reality, most of the major search engines are very similar in terms of their results these days.
Hashim is dead on. Google was in a position to own the markets that are now led by upstarts like MySpace, YouTube and Digg. Google has basically been a non-player in the whole "Web 2.0" craze. The fact that it didn't even capitalize on a single one of the many new market opportunities makes one question the leadership, competence and organizational structure of the company now that it is monster-sized. It's very easy to espouse a lean, fast philosophy but it's much harder to execute that way when you're a gigantic company.
Google is not divine. In fact it's starting to look rather human. Recent reports indicate that the rate of growth in Google's expenses has overtaken the rate of growth in their revenues. This is an ominous sign. I have also questioned the rationale behind many of their acquisitions. The recent purchase of biometrics firm Neven Vision is very curious and I don't see strong synergies with a lot of Google's recent acquisitions. Many people see the same randomness in Google's moves but think that Google is so genius that there must be some grand plan that only Google is aware of. Given their failure to deliver success in any other area outside of search and the fact that 95% of their revenues still come from a single source, I think it's more likely that we're simply looking at a one-trick pony that was in the right place at the right time with the right product. It's also worth noting Brin and Page's recent purchase of a 767 "party plane" apparently with company money, which smacks of a company that has become so wealthy so fast and lost all the principles and culture that made it so successful in the first place.
on 17 Aug 2006 at 1:54 pm 12.bigpicture said …
Just a couple of points about the Google secondary products. A lot of these are still in beta trial ware version, for feed back on further development.
I see these products as "value added" to Google search. It will become increasingly difficult to stay ahead of the search engine market, but Google can distinguish themselves from the crowd by providing better "value added" such as the Gmail, Calendar, Google Earth, Spreadsheet etc. Keeps their customers coming back.
Some of the products are still raw but have potential, especially if functionality is integrated. I know it keeps me coming back.
on 17 Aug 2006 at 3:58 pm 13.Max Smolev said …
Most of the "not-so succeeding" projects are irrelevant to the regular user. What I am afraid of is people will start thinking that Google is not capable of anything new and great any more (after trying so many "so-so" services people usually stop trying alltogether). Which probably could put a dent in Google's desire to invent.
Meanwhile it becomes more and more difficult to use primary Google service — search engine. Search spam attacks are increasing and I, personally, run into many cases where searching returns no results at all. *sigh*
on 18 Aug 2006 at 8:21 am 14.Droc said …
Great post, particularly your point about low cost product development coming from the engineers.
I use Google's personalized home page for my reader, gmail, calendar, you tube and flickr.
I was wondering, however, does anyone have any thoughts about the effects of Dell shipping computers with Google software pre-installed?
Personally, I think that kind of mass rollout will have a tremendous impact on extending Google's reach.
on 18 Aug 2006 at 9:09 am 15.ceaseoleo said …
The main problem with google is they are a bunch of phd or very smart engineers. They are not conditioned to make things look good ( just look at all there sites) and they are not conditioned to think ohhhh i wonder what flashy web 2.o application I can do , maybe if i make the news articles slide down in a news spy it will be better. This is just not how engineers are. We're more concerned with functionality, and doing it the best way in the fewest and cleanest amount of code. Google services and products just work, and work well. I think people want things on the page to move and spin and all kinds of crap thats not necessary (look at how well macs and osx are doing … but thats for another post). Well this will all die down, and web 3.0 we will return to saneness, and functionality.
on 09 May 2007 at 10:29 am 16.vichy said …
"This is just not how engineers are. We’re more concerned with functionality, and doing it the best way in the fewest and cleanest amount of code. Google services and products just work, and work well."
but it's still the best designroule fpr big success - "Form follows function!"
This is the rule an this works best!
on 16 Jun 2007 at 2:41 am 17.Ontario said …
Google products do work well. Very well.
on 06 Nov 2007 at 10:02 am 18.Let there be ‘Google’ « Nirupesh Joshi’s Blog said …
[...] Some argue that the entire line of products and services offered by Google have not been successful and only a few, found its way to the top of the charts. This is true, but what puzzles me right now is the fact that when someone says 'Google' to me, I can neither think of them as a Search company nor can I think of them as an Internet applications company. Look at the announcement on their official blog today, after all debuts they are stepping into Mobile technologies now, attempting to create an 'open' platform for Mobile applications development. The partners include Motorola, Qualcomm, HTC and T-Mobile. I am not a mobile technology expert but in my opinion, these players do not dominate the market. There are other big players like Nokia and Sony Ericsson that already work on Symbian. Will they also embrace the 'Open Handset Alliance'? Time will tell. [...]
on 22 Sep 2008 at 8:20 am 19.Prosumer News said …
Google's new product "stickiness" doesn't matter…
rianjs.net
Recently I read an article in Business Week about Google ("So Much Fanfare, So Few Hits") and I found myself agreeing with the premise that Google certainly does release lots of new products and services ¡½ none of them as pop…
on 22 Sep 2008 at 8:24 am 20.Prosumer News said …
Interview of Google's Rajat Mukherjee…
Interview of Google's Rajat Mukherjee
Eric Enge: How do Topics feature into Google's plans at this point?
Rajat Mukherjee: The Topics features have a lot of power, and we are using these features as we go forward. Refinements are really …