Now In Beta At Google: Microsoft-Style Hubris

from the just-warming-up dept

Tue, Nov 21st 2006 9:10am — Joseph Weisenthal

Last week, we discussed why Microsoft failed to properly anticipate changes in the tech industry. A big part of it came down to the company's culture, which had the attitude that it could always beat the competition, as long as it used its size and technical prowess to put more into R&D than anyone else. Of course, that strategy only works as long as the competition is trying to beat Microsoft at its own game. Once competitors started going in totally new directions, like delivering over the web, then Microsoft's advantages in size started to fade. Now Google is in Microsoft's shoes, and it looks like the company may have the same mentality. Paul Kedrosky notes an interesting quote from a Google employee, in which he seems to say that it would be difficult for any company to ever match the company in terms of scale or ability to innovate. You can see this attitude in practice, as the company hopes to build up huge barriers to entry by building out enormously expensive and complex computing power plants. As Paul notes, the answer isn't to try to rebuild Google (just as the answer wasn't to rebuild Windows), but to come up with something completely new. That's easier said than done, of course, but it's that threat that Google needs to be worried about.

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9 Comments

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Michael Long, 21 Nov 2006 @ 9:31am

All too true.
One has only to look at how fast Google became popular, and at how fast people dumped Alta Vista, the once "king" of search engines, to realize that this scenario could easily play out once again, only this time with Google taking over the role from AV.

Let someone dramtically improve the search process, say, with AI or a system that truly understands context, and the big G could be in trouble in an amazingly short period of time.

The flop side of the matter, however, is that Google seems to understand this, and it's one of the reasons why they're into owning or partnering with "destinations" like Google Earth and YouTube and MySpace. Should someone else hit them in the search market, they'd continue to have ad visibility elsewhere.

In fact, one person I know says that, now, 90% of their AdSense clicks come not from search, but from AdWords-placed content pages. In short, Google is already worried, but is also doing something about it...
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- NPGMBR, 21 Nov 2006 @ 9:39am
  
  Re: All too true.
  This is interesting because if (AdWords) are what I think they are, MS tried this a few years back and everyone was in an uproar about it. I don't remember what MS called it but what it was were links in web pages that related to either Ads or related Sites.
  
  Anyone have a better understanding of what im trying to remember?
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  - Mike Peter Reed, 21 Nov 2006 @ 12:23pm
    
    Re: Re: All too true.
    Yes, they were called Smart Tags and you remember them all wrong since they are nothing like AdSense (though Microsoft would probably prefer you remember the facts incorrectly). Smart Tags have surfaced, and it's like some script scans the text and overlays hyperlinks to stuff for you to buy. It's frickin annoying IMO. AdSense however does not irritate the hell out of me.
    
    Microsoft Smart tags, more here:
    http://searchenginewatch.com/showPage.html?page=2163981
    "With Smart Tags, Internet Explorer would turn certain words on a web page into links, if it believed Microsoft had content available for them. Click on the link, and you'd be taken to Microsoft content. Add-ons were to allow others besides Microsoft to establish Smart Tags."
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wolff000, 21 Nov 2006 @ 10:08am

Innovation Is Always The Key
If you want to stay on top you have to stay new. relying on your size and position will only allow a smaller more nimble competitor to bounce right by before you know it. Ask Yahoo and I'm sure they will agree. I have to admit I am a Google fan they put out products I like and best of all most of them are completely free or have a free version. They have been major innovators in the industry but to stay where they are they have to keep the innovation going.
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JT, 21 Nov 2006 @ 10:37am

Wrong
#1 Google is not just about searching... It is about ADs.
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Michael Long, 21 Nov 2006 @ 10:58am

Wrong
#4. Yes, but those ads have to BE somewhere, and people have to have a reason to come visit them, see them, and click on them.

And for a long time, that reason was search.
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Petréa Mitchell, 21 Nov 2006 @ 12:23pm

Thank you
I was hoping for a post on this topic. The thing that really struck me about the WSJ article last week was where it talked about how the old, complacent Microsoft attitude was that it was all just about refining the technology. Seems to me I hear a lot of that from Google...
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comeon, 21 Nov 2006 @ 12:39pm

You talk like Microsoft is dead and buried. Microsoft has a market cap of close to $300 billion, will do close to $45 billion in sales and have a net income of close to Google's total revenue.

Why wouldn't Google want to be more like Microsoft? The only problem is Google is a one trick pony, 99% or more of their revenue comes through ads. Not a bad business to be in, but even if they capture 100% of the market, where would that leave them? At over $500 a share, I just don't see buying Google stock, but then again, I didn't think it was worth more than $85. Nothing says the market or Wall Street has to make sense.

Personally, wouldn't surprise me if in 5 years time, we see an SEC investigation that reveals all kinds of weird accounting practices at Google. Sounds about right for a tech company.
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Jake Lockley, 21 Nov 2006 @ 12:42pm

Don't Forget
Google is all about the metadata - that's where their value lies. Not in the apps, but the behavioral data collected and the value it holds (now) to advertisers and the value it will hold later to application developers and ai researchers.

Do a search for the Googlezon video if you haven't seen it. Imagine the Metaverse where everyone has a librarian only they are all owned by Google.

It is still possible to kill Google in their own market. The solution is to build a walled garden even more empowering than Google.
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