Home > Uncategorized > The Rise and Fall (and Rise) of Google?

The Rise and Fall (and Rise) of Google?

So it is now ‘official.’ The front of this months Fortune magazine heralds the headline of ‘Is Google Over?’ Of course we have been talking about this on the Ryan Academy blog for some time; about Google’s lack of clarity in strategy, the fact that many of its home grown innovation ideas have failed to bring in additional revenue and the fact that it has lost a lot of its original engineering talent. Is it this simple? No, many tech companies go through bad times (Apple, IBM and Dell more recently) and many have a big cash cow and fail to follow-on (Microsoft).

The fact is that Google missed the social networking space. Badly. Perhaps not unusual, as it’s search technology brings in the majority of it’s revenue and will continue to do so. But with Facebook and other social media making headway on their online advertising and newer plays such as MS Bing starting to take some of its search dominance away, Google is being assaulted on all sides. We have talked about its part in the recent high-tech acquisition boom, making up for its own internal innovation engines failure to capitalise on its much vaunted ‘one day a week’ for engineers to do their own projects. Perhaps they should take  a leaf out of Apple’s book and focus on new product development for domination in emerging market sectors.

Still it isn’t all bad news. Any company with a projected 18% earnings growth rate (how many companies would kill for that?) means that it is (through its advertising revenue), as Fortune puts it, a cash cow. Just like Office is and was for Microsoft. Strategic thinking and focus is what they need now. Facebook definitely has the focus. And as we await to see what Google Me looks like, Google may rue missing some of the recent social media trends and new consumer sites like Twitter, Groupon or FourSquare.

Perhaps they need to read the new book on business strategy that recently came out. Walter Kiechel’s book ‘The Lords of Strategy’ is an interesting history lesson of the past and in terms of the future, points out Michael Porters concern that companies in the nineties were giving up on strategy in search of more ‘faddish pursuits.’ Recent work by Boston Consulting Group seems to see similar issues with large companies in this time period.

Strategy: never liked but more often than not useful! As the Irish saying goes, if you don’t know where you are going, any road will take you. Google needs to pick a spot on the horizon. One that it can win.

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