How Google may fail

I worded the title of this article carefully; I used "may," not "will." Google may end up as de facto owner of the world's information, and I could be wrong. Time will tell.

Google's early success came by doing something well that no one else was doing--searching the Web. Google studied the behavior of early search engines like Alta Vista, and came up with better search algorithms. Everybody liked Google because it did something no one else could do--produce relevant search results.

Google then introduced ads linked to searches--again, a new idea and a new service no one else was doing. They did the world a great favor by proving that ads on the Web worked. So far, so good.

But somewhere along the way, Google, I think, has lost its way. Consider the warning signs:

  • Google says it won't give the Feds search phrases to aid the fight against child pornography. As awful as child pornography is, I think turning search phrases over the government is stepping on a banana peel at the top of a steep hill. But barely a week after this principled stance by Google, the company lamely claims that cooperating with the Chinese Communist government to censor the Chinese version of Google is okay. Whatever self-delusional reasoning Google used on itself, they sold out a billion people to make a buck, and worse, proved that the company is internally inconsistent.
  • For the last couple of years, Google has been rolling out new services like email and news, the better to extend its grip on advertising. But to make some of these things work, the company is relying on taking content from others, packaging it in new ways, and selling ads--with no revenue sharing with the content holders. This is a nice way to create a lot of enemies very quickly.Newspapers are roaring mad at the company for this tactic, and book publishers and authors are apoplectic at Google's scheme to scan every book in the world and make the results searchable--again, with ads plastered on every page delivered and no revenue sharing with the content owners.
  • Google's value dropped $20 billion yesterday as expenses outran revenue. How could this happen? Google is spending hundreds of millions of dollars to build a complete, nationwide network completely separate from the current distributed Internet structure--in effect, creating a walled garden where every service is a Google-branded "free" service that runs quicker and faster than services on the "old" Internet. But this is going to make ISPs madder than heck, and could lead to routing wars, where parts of the Internet become inaccessible.
  • Finally, Google's search algorithms stink, in the sense that as the Internet has grown, they don't work like they used to. Other companies have developed alternate search approaches that work better (but they lack market visibility). Google may fast become the GM of the Internet, with stuffy, dull cars that a lot of people still buy but that no one really likes very much--nearly every Google search returns hundreds of thousands if not millions of search results--how stupid is that? And after all this time and all the money they have, they can't make search work better? Their eye is off the ball as they try to build all these other empires.

Google is not going away, but the company has moved away from its core competency, and that's always dangerous.

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