4 ms·

With the changes occurring at Google right now, could we be feeling the impact of Page taking this advice to heart? It seems Google are pruning a lot of stuff

by 5hoom 15y ago

With the changes occurring at Google right now, could we be feeling the impact of Page taking this advice to heart? It seems Google are pruning a lot of stuff they must see as external to their core business, and putting happy-safe bubble wrap around services like search (see todays story about the + operator being depreciated to the dismay of advanced users). I suppose this is Google trying to improve themselves, lets just hope they can execute as well as Apple when it comes to making super simplified products that people want.

lacker 15y ago
I doubt the + thing is "happy-safe bubble wrap" - more likely they are deprecating the previous functionality in preparation for more Google+ integration into search.
- Joakal 15y ago
  I think Google will attempt +<person> to make it easier to search G+ for them.
jsnell 15y ago
Hard to say, since the advice from Jobs was seemingly also to keep the number of employees down. It's been the reverse on Page's watch, with mad headcount growth.
cmelbye 15y ago
I think the wind down of Google Labs and several small Google products, APIs, etc is definitely reflective of that advice. Very cool to know where they might have gotten the inspiration to do that.
- chugger 15y ago
  Motorola's acquisition will go down in history as one of the top 5 dumbest business decisions of all time. I won't be surprised if Larry Page is replaced as CEO within 3-5 years.
  - rglullis 15y ago
    Man, I have a proposal for you: if you manage to not troll the website with anything anti-Google or pro-Apple for a month, I'll pay your next year of Apple developer membership, ok?
    - chugger 15y ago
      I posted this on another thread but I think it's worth repeating. Here's why Larry Page is doing poor job. A company's Return on Invested Capital is the ultimate measure of a company's valuation. it's not the PE, EPS, etc. Basically, ROIC is a measure of how efficient a company is in using its capital to generate returns. Warren Buffet uses ROIC to evaluate companies. Let's compare Apple and Google's ROIC. Apple's return on invested capital is 30.4% with a 5-year average of 26.1% despite Apple having lower gross profit margins compared to Google. a 30.4% ROIC is amazingly high for a "hardware company". Google's return on invested capital is only 18.3% with 5 year aveage of 17.2%. Why? Different types of growth earn different degrees of return so not all growth is equally value-creating. Growth strategies based on organic new product development (ie. iPod, iPhone, iPad, iMac, etc.) frequently have the highest returns because they dont require much new capital. Apple can add new products to their existing factory lines and distribution systems, without much capital expenditure. The investments to produce new products are not all required at once. If preliminary results are not promising, future investments can be scaled back or canceled. Contrast this with Google's growth strategy of acquiring companies (Motorola, Youtube, Android, Doubleclick, etc.). Acquisitions require that the entire investment be made up front. The amount of up-front payment reflects the expected cash flows from the target company plus a premium to stave off other bidders. So even if Google can improve the target company enough to generate an attractive ROIC, the rate of return is typically only a small amount higher than its cost of capital. Factor in the additional traffic acquisition costs and costs of running hundreds of thousands of servers to support Google search, Youtube, Blogspot, GMail, etc. and you'll see why Google's return on invested capital is much lower compared to Apple. Google has a habit of wasting money on money-losing initiatives with low ROIC (Google's $280-million solar power initiative, self driving cars, etc.). Wall Street perceives the $12.5 Billion Moto acquisition as an expensive and inefficient use of capital that will further dilute the company's ROIC. Motorola's acquisition does not create or add value to Google. it actually destroys value, at least until Google recoups the $12.5 Billion acquisition cost. This is the reason why Apple is the most valuable company in the world. Meanwhile, Google's market cap's been stuck in the $170-$200B range for a couple of years now. Here's the number one rule of conservation of value: anything that doesn't increase cash flows doesn't create value.
icki 15y ago
Any decision that a company makes is an attempt to improve itself. According to the article, Jobs recommended to Page that Google focus on five services - I'm curious as to which services HN thinks are core to Google's growth and success? Off the top of my head: Search, Android, Chrome, Plus and YouTube.
- ashishgandhi 15y ago
  Don't forget Apps: Mail, Maps, Docs, Translate, etc.
  - scriptproof 15y ago
    + programming languages.
  - icki 15y ago
    This is exactly the rhetoric that Steve Jobs wanted Google to avoid, and perhaps he was exaggerating. But really, while there are many excellent products that Google has built, not all of them are capable of generating revenue and/or adoption of other Google products. That is the fat that Jobs was saying Google should trim.
- crowsfan85 15y ago
  According to this April 2011 LA Times article [1], six senior VP's now oversee these areas: mobile, social, Chrome, YouTube/video, search, and ads. [1] http://latimesblogs.latimes.com/technology/2011/04/exclusive-google-ceo-larry-page-completes-major-reorganization-of-internet-search-giant.html http://latimesblogs.latimes.com/technology/2011/04/exclusive...
- 0x12 15y ago
  Why would you take advice from a competitor, especially one that is suing you over exactly the subject matter of their advice? Really, Apple telling Google to concentrate on services is like Google telling Apple to concentrate on hardware. Google was iirc at some point involved in developing a little phone operating system that competed directly with one of Apple's cash cows. Naturally it would be great for Apple if google forgot about phones, Android and whatever else would cause them to one day run in to Apple in the marketplace. If google would concentrate on search then that would be great news for Apple indeed. Android is not a service, Chrome is not a service. Search, YouTube and Plus are services.
jroseattle 15y ago
Good observation, I think that's exactly what we're seeing. It's an interesting balancing act that can sometimes go against the very grain of tech companies, especially one the size of Google. Everything we as mere mortals in the tech business are taught is to try things, fail quickly, iterate. Jobs approach was to do a few things and do them well. Indeed, he felt the most important thing one could do, as an agent of change in that type of role, was to learn to effectively say no. http://www.youtube.com/watch?v=FF-tKLISfPE http://www.youtube.com/watch?v=FF-tKLISfPE Page has always been very smart and a phenomenal software engineer, but his new role is different. I believe Page finds himself in a somewhat similar position to Jobs in 1997, and it will be very interesting to see how he does as a technology leader.
- willifred 15y ago
  What are the similarities in position between Jobs/Apple in 1997 and Page/Google now?
  - jroseattle 15y ago
    The companies are certainly in different spots -- Apple was floundering in 1997, while Google is growing in 2011. But I do see common threads for the roles that both Jobs played then and Page is playing now. Jobs returned to Apple after a 10+ year hiatus. So, while returning to his roots, they were not the same team he had left behind. He had to reconstruct much of the company's management structure, which he felt was fraught with engineering mismanagement. (Saw an interview with Jobs from back then, but can't seem to find the source of those comments now.) Page, in assuming the role as head of the company earlier this year, was taking ownership of a management team and organization that had largely been put in place by Schmidt (remember when he was needed for "adult supervision"). While Page was certainly there during that duration, he also didn't have direct responsibility for the rest of the organization. It's not an exact parallel, but Page certainly had a new organization from when he gave up the reins a decade ago. (And, he quickly responded by re-aligning several key management members). But more so than environmental, it is the state of product development in Google I find most similar. Jobs inherited a company that was spinning its wheels on various ideas, but not doing anything particularly well. Any vision the company held was certainly not reflected in the products it brought to the marketplace. Page inherits a situation where, outside of search, Google doesn't do anything particularly well. I don't mean they suck, just that their product offering isn't much of a differentiator from competitors, or provides a compelling experience for users. I'm sure arguments can be made to counter my subjective opinion, but there are no product or services from Google that rivals the popularity of it's web search. Referring back to Jobs's 1997 WWDC speech, it was about setting the bar for finding exactly what they should be working on, without regard to whether something had traction or if it was a good technical idea. I believe Page has to make those very same considerations right now.
contextfree 15y ago
So to avoid becoming like Microsoft they're pruning initiatives deemed non-core and trying to focus on a smaller number of big bets, which ... is more or less what Microsoft has been doing for the past year and a half or so, for better or worse. Curses, foiled again!

by 5hoom 15y ago

lacker 15y ago

I doubt the + thing is "happy-safe bubble wrap" - more likely they are deprecating the previous functionality in preparation for more Google+ integration into search.

Joakal 15y ago
I think Google will attempt +<person> to make it easier to search G+ for them.

jsnell 15y ago

Hard to say, since the advice from Jobs was seemingly also to keep the number of employees down. It's been the reverse on Page's watch, with mad headcount growth.

cmelbye 15y ago

I think the wind down of Google Labs and several small Google products, APIs, etc is definitely reflective of that advice. Very cool to know where they might have gotten the inspiration to do that.

chugger 15y ago
Motorola's acquisition will go down in history as one of the top 5 dumbest business decisions of all time. I won't be surprised if Larry Page is replaced as CEO within 3-5 years.
- rglullis 15y ago
  Man, I have a proposal for you: if you manage to not troll the website with anything anti-Google or pro-Apple for a month, I'll pay your next year of Apple developer membership, ok?
  - chugger 15y ago
    I posted this on another thread but I think it's worth repeating. Here's why Larry Page is doing poor job. A company's Return on Invested Capital is the ultimate measure of a company's valuation. it's not the PE, EPS, etc. Basically, ROIC is a measure of how efficient a company is in using its capital to generate returns. Warren Buffet uses ROIC to evaluate companies. Let's compare Apple and Google's ROIC. Apple's return on invested capital is 30.4% with a 5-year average of 26.1% despite Apple having lower gross profit margins compared to Google. a 30.4% ROIC is amazingly high for a "hardware company". Google's return on invested capital is only 18.3% with 5 year aveage of 17.2%. Why? Different types of growth earn different degrees of return so not all growth is equally value-creating. Growth strategies based on organic new product development (ie. iPod, iPhone, iPad, iMac, etc.) frequently have the highest returns because they dont require much new capital. Apple can add new products to their existing factory lines and distribution systems, without much capital expenditure. The investments to produce new products are not all required at once. If preliminary results are not promising, future investments can be scaled back or canceled. Contrast this with Google's growth strategy of acquiring companies (Motorola, Youtube, Android, Doubleclick, etc.). Acquisitions require that the entire investment be made up front. The amount of up-front payment reflects the expected cash flows from the target company plus a premium to stave off other bidders. So even if Google can improve the target company enough to generate an attractive ROIC, the rate of return is typically only a small amount higher than its cost of capital. Factor in the additional traffic acquisition costs and costs of running hundreds of thousands of servers to support Google search, Youtube, Blogspot, GMail, etc. and you'll see why Google's return on invested capital is much lower compared to Apple. Google has a habit of wasting money on money-losing initiatives with low ROIC (Google's $280-million solar power initiative, self driving cars, etc.). Wall Street perceives the $12.5 Billion Moto acquisition as an expensive and inefficient use of capital that will further dilute the company's ROIC. Motorola's acquisition does not create or add value to Google. it actually destroys value, at least until Google recoups the $12.5 Billion acquisition cost. This is the reason why Apple is the most valuable company in the world. Meanwhile, Google's market cap's been stuck in the $170-$200B range for a couple of years now. Here's the number one rule of conservation of value: anything that doesn't increase cash flows doesn't create value.

icki 15y ago

Any decision that a company makes is an attempt to improve itself. According to the article, Jobs recommended to Page that Google focus on five services - I'm curious as to which services HN thinks are core to Google's growth and success? Off the top of my head: Search, Android, Chrome, Plus and YouTube.

ashishgandhi 15y ago
Don't forget Apps: Mail, Maps, Docs, Translate, etc.
- scriptproof 15y ago
  + programming languages.
- icki 15y ago
  This is exactly the rhetoric that Steve Jobs wanted Google to avoid, and perhaps he was exaggerating. But really, while there are many excellent products that Google has built, not all of them are capable of generating revenue and/or adoption of other Google products. That is the fat that Jobs was saying Google should trim.
crowsfan85 15y ago
According to this April 2011 LA Times article [1], six senior VP's now oversee these areas: mobile, social, Chrome, YouTube/video, search, and ads. [1] http://latimesblogs.latimes.com/technology/2011/04/exclusive-google-ceo-larry-page-completes-major-reorganization-of-internet-search-giant.html http://latimesblogs.latimes.com/technology/2011/04/exclusive...
0x12 15y ago
Why would you take advice from a competitor, especially one that is suing you over exactly the subject matter of their advice? Really, Apple telling Google to concentrate on services is like Google telling Apple to concentrate on hardware. Google was iirc at some point involved in developing a little phone operating system that competed directly with one of Apple's cash cows. Naturally it would be great for Apple if google forgot about phones, Android and whatever else would cause them to one day run in to Apple in the marketplace. If google would concentrate on search then that would be great news for Apple indeed. Android is not a service, Chrome is not a service. Search, YouTube and Plus are services.

jroseattle 15y ago

Good observation, I think that's exactly what we're seeing. It's an interesting balancing act that can sometimes go against the very grain of tech companies, especially one the size of Google. Everything we as mere mortals in the tech business are taught is to try things, fail quickly, iterate. Jobs approach was to do a few things and do them well. Indeed, he felt the most important thing one could do, as an agent of change in that type of role, was to learn to effectively say no. http://www.youtube.com/watch?v=FF-tKLISfPE http://www.youtube.com/watch?v=FF-tKLISfPE Page has always been very smart and a phenomenal software engineer, but his new role is different. I believe Page finds himself in a somewhat similar position to Jobs in 1997, and it will be very interesting to see how he does as a technology leader.

willifred 15y ago
What are the similarities in position between Jobs/Apple in 1997 and Page/Google now?
- jroseattle 15y ago
  The companies are certainly in different spots -- Apple was floundering in 1997, while Google is growing in 2011. But I do see common threads for the roles that both Jobs played then and Page is playing now. Jobs returned to Apple after a 10+ year hiatus. So, while returning to his roots, they were not the same team he had left behind. He had to reconstruct much of the company's management structure, which he felt was fraught with engineering mismanagement. (Saw an interview with Jobs from back then, but can't seem to find the source of those comments now.) Page, in assuming the role as head of the company earlier this year, was taking ownership of a management team and organization that had largely been put in place by Schmidt (remember when he was needed for "adult supervision"). While Page was certainly there during that duration, he also didn't have direct responsibility for the rest of the organization. It's not an exact parallel, but Page certainly had a new organization from when he gave up the reins a decade ago. (And, he quickly responded by re-aligning several key management members). But more so than environmental, it is the state of product development in Google I find most similar. Jobs inherited a company that was spinning its wheels on various ideas, but not doing anything particularly well. Any vision the company held was certainly not reflected in the products it brought to the marketplace. Page inherits a situation where, outside of search, Google doesn't do anything particularly well. I don't mean they suck, just that their product offering isn't much of a differentiator from competitors, or provides a compelling experience for users. I'm sure arguments can be made to counter my subjective opinion, but there are no product or services from Google that rivals the popularity of it's web search. Referring back to Jobs's 1997 WWDC speech, it was about setting the bar for finding exactly what they should be working on, without regard to whether something had traction or if it was a good technical idea. I believe Page has to make those very same considerations right now.

contextfree 15y ago

So to avoid becoming like Microsoft they're pruning initiatives deemed non-core and trying to focus on a smaller number of big bets, which ... is more or less what Microsoft has been doing for the past year and a half or so, for better or worse. Curses, foiled again!