Thursday, November 02, 2006

Google Labs or a growing junk-yard?

Yeah, Google is God. I have been believing it since long time. It still remains. However, off-late I have gotten into discussions about how does Google make money? It has only Ad-words and Ad-sense. The analysts warned the Wall Street against high valuations of Google stock and changed their recommendation from "hold" to "sell" even though Google has cornered 25% of online advertising revenue. But, the markets have been bullish and the price of Google stock keeps soaring against the advices of analysts.

Why such exuberance when Google hasn't opened up any other avenues of generating revenues. Google launches cool products, we go and use them, laud them; but what happens to these products after that. How many of them are actually a commercial success or become the market leader in their category? Probably none. Here is an article (How Google wins by losing) which discusses the Google phenomenon on these lines and where does the whole thing fit in. At present, there are more articles doing round on the Web discussing these matters.

Google itself has made huge investments in buying other technologies, latest being YouTube. But how will all this gel in together remains hazy. Google is making competitors all around by making experimental products in their specialization area. It doesn't take those products to Release versions (most of the things are in Beta). But, that warns the other companies against Google's motives and they become skeptic of it. Exactly the same thing happened when Amazon removed Google as its preferred search engine and started using MSN Live on its website. Its a move which has great implications because Amazon is the best example of social-recommendation bringing up search results which complements Google's powerful search algorithm. Google lost on a potential ally by introducing a Beta online store service (Froogle) and other services (Books). Google has gunned against Microsoft (obviously), eBay, Amazon, Yahoo, Skype and the list goes on. Can it go on making such rivals without even seriously delivering Release quality products?

Its what some folks say. Google's product delivery model is summed up as "throwing spaghetti on the wall". It develops "spaghetti" (Beta versions), throws them on the wall and waits to see what sticks. Those which stick, become hit. Those which fall are forgotten (Google Finance, anyone?) And Google moves on.


Prashant said...

A good informative article....

Id it is said...

Google's 'growing junk-yard' did some good here! Welcome back Morpheus.