What the Heck Happened to Google?

The company has a machine that prints money. And what do creative engineers do when you give them unlimited amounts of money?

Really cool stuff, like self driving cars and making sure everyone has blazing fast Internet. Turns out if that stuff is successful Google makes even more money.

The only problem is wall street isn't good at delayed gratification. They want to make money now. So milk the cash cow as hard as you can until it falls over dead, then we'll find another cow. It's rational if you lack foresight and vision.

It's almost as if optimizing for immediate shareholder return isn't always the best thing to do. So Larry and Sergei will ignore the pundits (such as this one) who still don't understand why Google is what it is in the first place, and soon our cars will drive us around instead of us driving them.

It's a beautiful thing, really. I wouldn't have it any other way.

It's hard to take seriously an article that so unabashedly flaunts its own ignorance. Especially when the answer to this rhetorical question could be found with a five second Google search.

There are legitimate arguments to be had about Google's current strategy. But this piece is not part of them! He doesn't even really seem to assess any of the allegedly ill advised Google projects he lists...instead he makes fun of the names.

> Over the past four years, Google’s annual revenue growth has plummeted from 30% to 10% while expenses have ballooned from 69% to 75% of sales. And 90% of its $66 billion in sales still come from online advertising. That dependence on ad revenue is becoming a real problem.

Of course Google needs to diversify. But Page and Brin don't know what business(es) it will diversify into because no one knows. That's as difficult to predict as the direction of technology itself. Google is pursuing the unique advantages it has at this moment: (1) an ability to attract top engineering talent and (2) a big ol' pile of cash. Unlike Apple, Google is actually plowing that cash into forward-thinking R&D beyond the next iteration of their existing product (no disrespect to Apple, I mean that more as a lament than a criticism).

Early results from the self-driving car and Project Loon have been very promising, to say the least. Android is one of the most popular operating systems in the world, and puts a Google search bar one tap away from hundreds of millions of people. Chrome OS laptops are among Amazon's best selling models, and they too drive search traffic. Microsoft has been emulating Google's online productivity app strategy for a few years now.

Seriously, what is the problem here? Since when does Amazon get a pass for diversifying and playing the long game, but not Google?

I think they've been quite focused. Put yourself in their shoes: almost all their money comes from ads and a large chunk from paid search. What do you do when you have 80% of the market in your main business? Trying to get the next 20% is expensive, maybe impossible since these users may not even have a choice of search engine (locked down company computers with IE, etc...). It's easier to grow by increasing the time their 80% of users spend on the net, searching and receiving ads.

Most of their projects are aligned with this goal. Android is about everyone having a conduit to browsing and searching at all times, even while driving or watching TV. Glass attempts to keep you connected and searching even when your hands are busy. Self driving cars are about converting wasted time during commutes into more time on the net. Their recent robotics companies acquisition spree is the same, less time doing stuff that can be delegated to a robot, more time online. Fiber and wireless are about reducing the costs to get you online and searching.

If all their goals with these projects materialize, people would be generating revenue for Google during almost all their waking hours.

Sure it does seem like Google is doing just about everything but I don't think that means they're aimless. I do think they're not doing well with focusing on the user experience of many of their products but they're still innovating in multiple places; this article just seems really forced.

cheap ISP could make people in remote places in the USA use the internet more.

saving you one hour in a google driven car will expose you to google search while you are bored with your daily commute landscape.

...they own the market. they are now investing in expanding the market cap.

why this is being upvoted here is beyond me. i can see this being upvoted on sites like icanhn-favorite-bottom-line-dividends.com ... but here?

- Google has gotten older, slower, and much bigger. They're a lot closer to Microsoft, than a start-up. As a tech company, if you live long enough it's the nature of the game, and no company gets to avoid it. You can count the number of tech giants that had a second wind as good as their first, on one hand.

- Google is accumulating far more cash than they can reasonably spend. Anti-trust concerns dramatically limit what they can buy with their $65 billion in cash. They should try to spend as much of it productively as they can. Their investments in fiber and wireless access, will both pay off, in that they can both easily be sold down the line if or when their goals are met. Nest, Boston Dynamics, robotics, AI, self-driving cars, Android etc. are all perfectly worthy investments that could produce outsized results over time (and if they don't, it simply does not matter; what's the alternative, return $3b to shareholders, a pointless sub 1% of their market cap - shareholders want risk and efforts made toward growth instead, as witnessed by their non-cheap 26 pe ratio).

As a software / advertising company, at $66 billion in sales, there is no scenario under which you're going to keep up 40% or 50% growth. Again, there is no scenario under which that can ever happen no matter what Google does. You can also make a very, very short list of companies above $70 billion in sales that were able to consistently generate 30% growth (much less for more than a few years).

In short, nothing (negative) happened to Google. Their outcome is among the best that could have ever occurred. Their slowing growth is unavoidable, and they were never going to own social or all of the smart phone industry (insert other lucrative business here that Google should have dominated per journalists or analysts); that's such a irrational premise that it's not even worth discussing indepth.

Remember when Jobs got in Schmidt's face about poaching Apple employees? It was a chess move. It built an ice wall between Apple's employees and Google's recruiters.

Google hires executives, directors, and managers -- positions based upon experience. Factoring out Apple, who else has this kind of talent? Microsoft.

Microsoft, whose former CEO famously hated Silicon Valley and built a company around this ethos. Whose very soul grates on the fluid agility that embodies the Bay Area. Whose org chart freezes ideas in mid-air.

Microsoft sends more talent to Google than any other company: http://qz.com/342229/where-tech-companies-hire-from/

We can assume that some of Google's 3,000+ ex-Microsofties fill management positions. It is unclear how many ex-Apple employees fill these roles because their numbers don't make the Fast Company list.

Google management has become a self-propelling vortex extracting lifeforce from developers: http://www.fastcompany.com/3022131/leadership-now/does-googl...

Jobs was mad at Google for Android: "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war."

The author of the Fox Business article claims that "it all started when Schmidt turned the company over to Page and Brin."

This is false. Schmidt didn't turn the company over to Page and Brin; he turned it over to Ballmer and Gates.

In other words: Google isn't flailing because engineers work on cool projects. It's flailing because they don't.