Thursday, March 02, 2006

Google a Go Go Gone

Recently, people have been weighing in on the reasons for Google's stock market decline and cloudy future. Let me add my reasons to the pile.

Google is wasting money and straying from its roots. Instead, they should get back to refining and "smartifying" its search tool. For instance, a natural language query system to pose simple questions (i.e. "Search Dell site for desktop computers with AGP slots) would help to improve the relevance of search results. Another natural direction for improvement would allow a user to tailor search results by the demographics of the user? What would users with similar demographics think are relevant links for this query?). All in all, we still spend too much time looking for relevant results from a search query.

While Google Ads has been a huge success and moneymaker, the same cannot be said for Google AdSense or its other services. In the case of Google AdSense, recent articles in the media have said that Google AdSense has been a disappointment: users find it difficult to use and revenues have been low. Google Ads are far and away Google's biggest revenue source.

The other products and services have been less than impressive when viewed in terms of their innovation. Recently introduced products such as Google Desktop Search are Google Maps are relatively easy for others to duplicate, and do not give Google any great competitive advantage.

The recent decline in Google's stock was foreshadowed during the pre-IPO period in an article that appeared in the Wall Street Journal. Disturbing comments that pointed to a lack of ambition about the company's future plans and growth came when one of the founders said he did not care about the money anymore (loosely paraphrasing here). Clearly he no longer had a "fire in his belly". So, with this attitude, how much genuinely new innovation and growth could one expect?

The ongoing spray of random and incomplete product roll-outs is further evidence of Google's own ignorance of its next "killer app". They remind me more of a charitable foundation that is just giving away products -- mostly commodity-level ones at that.

Competitive and profit margin pressure continues to build as more portal players and Google encroach upon each other's markets. Email, photo management, search engines are all being done by small and large players (i.e. Yahoo and MSN). Other ad networks have also come along to add to the growing inventory (or glut?) of ad space on the web.

We won't see another fast and long rise in Google's stock until Google comes along with another product that is extremely useful and difficult to duplicate.


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