Here’s a question you don’t hear often: is Google doomed?
One of the best articles you’ll read today is “This is how is Google will collapse”, by Daniel Colin James in Startup Grind: accepting the absurdity of talking about the “death” of one of the NASDAQ’s most valuable companies and at a time when its share price is at one of its highest levels since going public in August 2004, there is no denying that some of the arguments employed are reasonably well weighed and suggest a number of interesting reflections.
The first argument is that the current web allows us direct contact: for news, many of us go to a few chosen sites we know and like; for shopping, in addition to monsters like Amazon, there are many other sites we access directly, for the same reasons as above. The same applies to any number of categories: we need fewer and fewer maps, and Google is the web’s biggest map vendor.
I’m not so sure we can do without maps, after all, the web is expanding like some latter-day big bang. Google’s efforts to be the gatekeeper for inexperienced users who punch straight URLs in the search box, or to attribute itself all the traffic generated in a period of time just because some time ago the user arrived to the page via search does not change things much. The trend is toward direct and social, while search traffic is at best stable.
Moreover, one of the best measures of the quality of a site is the percentage of direct and social traffic, not that obtained through a search engine, which tend to be short visits. Is this worrisome for Google? I’m not sure, but certainly, this trend indicates something we mentioned before: transactional business, closing sales, is much better, more solid and more sustainable than the intangible business of trying to convince people to buy something.
The second aspect is equally evident, and is one I also mentioned recently: the boom in advertising blockers. Growing numbers of us are installing mass extensions to block advertising that we consider mostly garbage. Now that Google intends to save the web by preinstalling an advertising blocker in Chrome does not hide the simple truth that its business is advertising, and that helping users avoid bad advertising is not going to necessarily mean that we accept their good, supposedly non-intrusive publicity. That’s a big if that might have to overcome a systematic rejection of all. Few people have are bothered about the extent to which web sites depend on advertising. The use of advertising blockers has grown, particularly among young and affluent people, and are no longer the preserve of geeks: more and more of us even install them in our in smartphones.
In many ways, the battle over advertising is having a tougher impact on Google than expected: Facebook has managed to set itself up as the sniper with the most accurate and accurate shots, thanks to the iron control it exercises over users, it can probably withstand the attack of the advertising blockers — though not indefinitely.
Google seems to be having problems related to advertisers who veto the platform to prevent their ads from appearing next to potentially damaging or offensive videos, something that Facebook seems to manage better thanks to an advertising location model that is significantly different. It is not the same thing to see your company’s advertising next to a video of questionable content, as to see it in your timeline because some friend or someone in your network recommended it, however much that someone may have an equally questionable ideology. We forgive friends things we wouldn’t let others get away with.
The third element is less clear, but equally interesting: Google’s decision to pivot its business model from that simple mobile-first toward machine learning, despite it making a lot of sense, comes too late. Now that Google is shifting toward increasingly intelligent assistants that know more about us and help us in our day-to-day lives through all kinds of interfaces, it discovers that another giant, Amazon, has not only got there first, but has managed to position its Echo as the star to follow, with the largest market share and that is evolving very rapidly and now includes video.
I have written a lot lately about Amazon Echo and the importance of voice as the interface of the future, and the fact that Google is struggling to keep up with Jeff Bezos’s company. What’s more, as it sells things rather than just advertising, it fits into the new model better and is able to provide heftier finance. And all this while keeping an eye on other possible entrants such as Microsoft, which seems to be looking at a home PC instead of a standalone device: a questionable strategy, given that an Echo has no less than seven microphones, making it able to hear even when music is playing.
So, does this mean that Google is going to die? Should we start readying, as the article states, for a post-Google future? Probably not. I just don’t see a company with Google’s resources letting itself die or delaying a much-needed update of its road map.
Nevertheless, despite its financial results and its impressive image, Google has many problems on many fronts and has to think how to spend the money on solving them, given that it doesn’t seem able to do so through acquisitions: I will comment on this tomorrow on the basis of a Forbes article that cites me. So far, all the company has tried to do is fill gaps with its acquisitions, rather than creating and developing sustainable advantages over time.
Being the biggest and the most successful is not a get out of jail free card: not even Google can escape its problems, which is excellent discussion material.
(En español, aquí)
