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Rethinking Google

Tech elders and Googlers’ next move for moonshot

For the first half of this year, almost any episode has been hooked by Covid-19. My friends in Silicon Valley got stuck at home during the lockdown in U.S. but they kept reading books on Google and broadcasting their stories of the tech firm on social media. One of my friends discussed a grave concern about Google, an advertising firm for losing edges in its work environment. Another friend posted his cautious comment on Googlers with mid-life crisis. For months after months, I could not believe their stories because Google was yet my most challenging and innovative firm in Silicon Valley.

Last month, my subscription newspaper, the Economist, published an astounding story of Google, “Google grows up” in its briefing section. The mounting concerns on the sign of middle-age are openly described with some evidence and testimony from inside on its corporate culture among 120,000 employees, compounding relations with the government over antitrust case on monopoly, and the current struggling bets on business without clear moon shot projects. The story came with the strength of computing conglomerate to avoid becoming a conventional company and to unearth gold mines one after another in its 21 year history. Refocusing on the original credo as well as keeping its unconventional approach would be truly inspirational but controversial. What is the next moon shot? How do they bring about one?

Google declared that it was not going to be a conventional company that sustains the creativity and agility in 2004 when it went on public. But the sign of maturing business is recently looming. The story of the British newspaper describes the possible measures to stay innovative. The first response is to become like GE under the leadership of Jack Welch. GE made a huge profit, leaning on its financial division, GE Capital. The second route learns to be like AT&T and IBM by looking to investors. To follow that option, Google could spin off You Tube that might be worth more than Netflix. A recent stock market surge indicates that the share of Netflix has grown 500 times since it went floating 18 years ago. The third direction lies in in-house geeks to overcome the mid-life crisis. Microsoft and Apple elegantly bounced back from the ageing issues to expand into new areas of business. Microsoft became a provider of cloud-based tools ad services, licensing less on its Windows Operating System. Apple rebounded from a near-death experience at the brink to a maker of best selling portable device, iPhone.

The most common medicine for a decline in growth can be found in rediscovering core purpose and applying it in a new way. Two founders decided even early that Google’s mission is to organize all the world’s information. The current 9 platforms and 11 bets illustrate their main focus on information processing and artificial intelligence.

Rediscovery of core purpose brings the firm back to information processing. Google becomes more of a data gathering and fiduciary like commercial banks. Banks handle with money for clients who pay commissions for the service such as interbank wire transfer. In such scheme, Google charges fees to its clients for massive processing of information so that clients receive add-value product from the software tools and data mining.

No one can find gold mines unless a trial continues for a long time. For Google, if the theory of Microsoft and Apple applies to its routes, it will shift its focus on ad search engine tool provider to data banker. Currently search engine generate 90% of profits from advertising and it sets a profit of $34bn while other 8 platforms and 11 bets rely on this strong force.

Two friends of mine in Silicon Valley have never mentioned the future direction of Google on the spotlight. I would never mention it, either. Whether the possible route brings a Silicon Valley operation to another moon shot remains to be seen. Certainly, big tech firms attract anxious eyes from the general public, investors, and Congress for years to come.



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Hiroshi Hatano

Taught marketing @ universities in Tokyo, ex-I-banker @ UBS & mgmt consultant @ Kurt Salmon (Accenture Strategy now), Utah, Michigan + Georgia Tech educated