Sunday, December 13, 2009

Planet Google?

Just read a piece about where Google might be in ten years and considering the success of Gmail between 2004 and now, the author might just be right even though his forecasts may seem wild at times (e.g. Android prevailing in the mobile OS wars). That gives me an opportunity to comment and discuss a bit further Google's amazing ability to execute beautifully a bold strategy of massive innovation to deliver on an audacious vision to organize the world's information.

A couple of comments on Google in 10 years

Interestingly Devinda Hardawar (@devindra on Twitter), the post's author, reminds us that Gmail was launched only in 2004. Few people can argue it's gaining traction in the segment of people who use predominantly  email in SaaS mode and even making inroads into the segment of more traditional users who are stuck with legacy solutions like Outlook Express. Gmail grew 43% in 2008 and took #3 spot in August leaving AOL behind. It's gaining momentum and is probably a good indication of what Google can do in terms of winning market share with a patient approach that it can afford thanks to its advertising revenues.

Furthermore Devindra makes a couple of very powerful statements regarding Google Wave, stating his belief that it's much more important than it may seem on the surface and could well revolutionize the way knowledge work gets done. In keeping with a recent post on this blog, I very much agree with him and do intend to spend more time testing Wave, not dismiss it as Scoble has done, foolishly in my opinion. 

Google's execution excellence

Google ability to consistently pursue specific targets is an amazing characteristic of the company. They've been able to roll out a number of major services over the past decade accomplishing key strategic targets with each of them:

  1. search, their bread and butter and the foundation for any endeavor having to do with managing information at an age of information mostly uncontrolled proliferation. With that they accomplished brand recognition and created necessary technological foundations.

  2. email in what was not called SaaS yet, thus increasing the touch points with the market and making a first move towards managing some of the world's information.

  3. advertising based on search and content: building on the previous and targeting and industry which was both very inefficient and well endowed. With that they achieved financial viability and independence as well as consideration by financial markets.

  4. analytics, building on the previous one to help make the process of marketing communications and ultimately marketing more efficient and rational. With that they earned a position as a trusted provider of quantitative information.

  5. office productivity suite, to increase the share of their direct contribution towards managing the world's information by accessing a new kind of content.

  6. e-commerce capabilities with Checkout, to start processing transactional information on behalf of merchants and buyers.

  7. Android, to extend the reach of their services to mobile contexts and facilitate seamlessness of user experience across networks and contexts.

  8. voice services, to go beyond text and enhance the experience of users across the full range of Google services with a view to serving more and better the business world.

  9. technology as a service, to provide infrastructure as a service, operating system as a a service, storage as a service, programming platform as a service... and leverage the web as a platform.

Arguably, there's more and there are other ways of viewing what Google is doing, but in every case you'll find great consistency and clarity of purpose in strategy execution.

Google acquisitions: a string of success stories

Looking at the string of their acquisitions over the past decade (another way to assess strategy execution), the consistency of purpose is obvious and their ability to integrate acquired companies and technologies is impressive. Some people tend to focus too much on plays that did not turn out to be successful and fail to see the bigger picture: Google successfully embeds  80% of its acquisitions in the Google system, when the market average is much much lower (I'd say 20% based on the business news I've followed for the past 20 years).

Significant and successful moves included:

  • Deja in 2001, which became Google Groups, now integrated in Google Apps and arguably a successful service with important synergies with targeted advertising, Google's current bread and butter

  • Outride in 2001 and Kaltix in 2003 which became iGoogle, personalized search and the search wiki.

  • Pyra Labs and Genius Labs in 2003, which is the foundation of Blogger... No comment.
    Picasa in 2004... again not exactly a failure, especially considering the early success of Flickr

  • Baidu in 2004... and oh, China is a fairly big market they say...

  • ZipDash, Where2 and Keyhole in 2004, Endoxon in 2006 and Image America in 2007, which gave Google Maps

  • Urchin in 2005, which became Google Analytics subsequently enhanced in 2007 with the licensing of GapMinder's great data visualization technologies (commercial entity was called Trendalyzer)

  • Android in 2005... you have heard of the Droid success in the US I'm sure. In fact it's been estimated that 75% of all web resources visited with mobile phones in the US were either iPhone OS or Android... Nokia and Symbian are in the dust over there, so that's a decent accomplishment, no?

  • @Last software, in 2006, which gave Google Sketch still insufficiently acknowledged as a revolution in computer aided design and very used in engineering communities

  • Upstartle and 2Web Technologies in 2006 and Zenter in 2007, which power Google Documents, a foundation for online office productivity applications and online form building

  • JotSpot in 2006, which became Google Sites, an extremely powerful tool that some people like David Dossot (not exactly a tech nitwit) use to build websites and some other use to provide customized secure online workspaces for their customers (BusinessQuests humbly but proudly claims to be among them)

  • Grand Central in 2007, which became Google Voice and is still insufficiently acknowledged as a major disruption in telecoms because it does enable a form of unified messaging & communications

  • DoubleClick in 2007, which I believe holds a good share in all of its markets
    Postini in 2007, which provides fantastic anti-spam protection for all Google Apps for email users, amongst which yours truly very humbly and happily so

  • re-CAPTCHA this year, arguably a good security enhancement for Blogger
    and last but not least YouTube in 2006, which I think was a fair success amply justifying its acquisition price of 1.7 billion USD

Google is recorded as having purchased 59 companies for a total amount that is hard to assess but likely stands in the region of 15-18 billion USD. The track record of acquisitions can in no way be considered as bad. In fact I know only of one company that is better: Cisco. Both Google and Cisco are hugely analytical players, with extra smart employees on board, giving huge attention to recruitment and equally huge attention to acquisitions.

Another thing worth mentioning is Google's creation of an arm dedicated to early stage investments, which is called Google Ventures, a fund that started this year with 100 million USD. Google Ventures has made a couple of very smart bets in clean-tech with smart grid technology (Silver Spring Networks) and biotechnology (Adimab)...

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