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Google clearly has an unprecedented (well, maybe except for sun..) set of technologies on the horizon. Between network infastructure, mapping, energy, robots, a

by evv 13y ago

Google clearly has an unprecedented (well, maybe except for sun..) set of technologies on the horizon. Between network infastructure, mapping, energy, robots, and now home automation, their dominance in the future is easy to forsee. However, there was no mention about Google's rise to power being centered around a focused set of high-quality web services. And now they are starting their "3rd business model leg" of consumer devices before they have truly mastered their second, the SaaS market. I find it funny how the OP quickly glances over Apples unprecedented focus, althewhile highlighting and admiring Google's unwarranted diversification. The obvious question is: can Google get away with it all, or will they fail without focus? They have managed to stay cohesive so far, but as the author rightly points out, Google's true diversification has only just begun.

Silhouette 13y ago
The obvious question is: can Google get away with it all, or will they fail without focus? It will be interesting to see how Google handles quality and customer service if it increases its efforts to sell consumer devices. You can get away with a lot of ignoring people unhappy about the quality of your service if you're giving away that service for free in return for showing them advertising. Their only option is to stop using your service and go somewhere else, which doesn't cost you much if they're still a small proportion of your user base. However, you can't get away with a lot of ignoring unhappy people if you sell them expensive consumer gadgets that don't work properly. They'll do things like returning the item (substantial overheads for you even if it's in resaleable condition) or charging back the purchase fee if you don't make a return reasonably easy (more immediate overheads, and if you develop a pattern of this happening it's going to hurt your long-term overheads with the card companies as well). I'm a little surprised Google aren't going for the huge-value business model that the linked blog overlooks: being the on-line distributor/middle man. This position typically rakes in much of the profit while taking on relatively little risk and doing relatively little work to create the underlying value, and it always has; see: record labels, book publishers, app stores, cloud hosting, and of course the granddaddy of them all in the Internet age, Amazon.
- cpeterso 13y ago
  > I'm a little surprised Google aren't going for the huge-value business model that the linked blog overlooks: being the on-line distributor/middle man. This position typically rakes in much of the profit while taking on relatively little risk and doing relatively little work to create the underlying value Google has the platform to implement something like Gumroad, but Google hasn't had much luck with consumer services like Checkout.
- krakensden 13y ago
  > However, you can't get away with a lot of ignoring unhappy people if you sell them expensive consumer gadgets that don't work properly. They'll do things like returning the item (substantial overheads for you even if it's in resaleable condition) or charging back the purchase fee if you don't make a return reasonably easy (more immediate overheads, and if you develop a pattern of this happening it's going to hurt your long-term overheads with the card companies as well). People keep saying that, but is it really true? People buy lots of things from companies famous for terrible customer service all the time. I understand wanting it to be true, for sure...
  - Silhouette 13y ago
    It probably varies a lot with the nature of the product and the wealth of the individual. It's a hassle to return things and someone busy might not bother returning something that was not, to them, very expensive. Still, I suspect it's true to a much greater extent for physical products than ad-funded on-line services. If you spend real money on something and it really doesn't work, I think most people I know would err on the side of returning it and claiming a replacement/refund. It might also be worth mentioning that many places have explicit consumer protection laws that cover this kind of situation, so vendors/manufacturers can't just brush their responsibilities under the carpet because providing actual customer service people to deal with customers is expensive.
dclara 13y ago
Agree. Google is not a hardware company. Other than data collection, do they know how to build hardware systems? I don't mean the technical details which they can buy from acquiring engineers. What kind of new vision do they have in the home automation industry?
- psbp 13y ago
  I'd imagine that it's very close to Nest's vision now.
  - dclara 13y ago
    Do you think it's better than Honeywell? http://www.homedepot.com/p/t/203926327# http://www.homedepot.com/p/t/203926327#
spinchange 13y ago
I am reminded of so many great and formerly dominant tech giants that have pursued a similar course of deep investment, acquisition, and R&D in newer and more cutting edge technologies outside of, or tangential to their main engines of revenue and dominance without ever fully moving beyond those engines. Thinking specifically of companies like Intel, Microsoft, Cisco, et al. All spent (and continue to spend) literal billions on acquisitions and R&D and yet all still pretty much make their money from their original core competence. I think Google's case is simply more ambitious. Android is probably their second biggest adoption success after search/web apps but it seems evident they're not satisfied with the financial ROI of it... It's a defensive thing. tl;dr: Pivoting is very hard and history is full of brilliant companies that have tried and never been fully able to.

by evv 13y ago

Silhouette 13y ago

The obvious question is: can Google get away with it all, or will they fail without focus? It will be interesting to see how Google handles quality and customer service if it increases its efforts to sell consumer devices. You can get away with a lot of ignoring people unhappy about the quality of your service if you're giving away that service for free in return for showing them advertising. Their only option is to stop using your service and go somewhere else, which doesn't cost you much if they're still a small proportion of your user base. However, you can't get away with a lot of ignoring unhappy people if you sell them expensive consumer gadgets that don't work properly. They'll do things like returning the item (substantial overheads for you even if it's in resaleable condition) or charging back the purchase fee if you don't make a return reasonably easy (more immediate overheads, and if you develop a pattern of this happening it's going to hurt your long-term overheads with the card companies as well). I'm a little surprised Google aren't going for the huge-value business model that the linked blog overlooks: being the on-line distributor/middle man. This position typically rakes in much of the profit while taking on relatively little risk and doing relatively little work to create the underlying value, and it always has; see: record labels, book publishers, app stores, cloud hosting, and of course the granddaddy of them all in the Internet age, Amazon.

cpeterso 13y ago
> I'm a little surprised Google aren't going for the huge-value business model that the linked blog overlooks: being the on-line distributor/middle man. This position typically rakes in much of the profit while taking on relatively little risk and doing relatively little work to create the underlying value Google has the platform to implement something like Gumroad, but Google hasn't had much luck with consumer services like Checkout.
krakensden 13y ago
> However, you can't get away with a lot of ignoring unhappy people if you sell them expensive consumer gadgets that don't work properly. They'll do things like returning the item (substantial overheads for you even if it's in resaleable condition) or charging back the purchase fee if you don't make a return reasonably easy (more immediate overheads, and if you develop a pattern of this happening it's going to hurt your long-term overheads with the card companies as well). People keep saying that, but is it really true? People buy lots of things from companies famous for terrible customer service all the time. I understand wanting it to be true, for sure...
- Silhouette 13y ago
  It probably varies a lot with the nature of the product and the wealth of the individual. It's a hassle to return things and someone busy might not bother returning something that was not, to them, very expensive. Still, I suspect it's true to a much greater extent for physical products than ad-funded on-line services. If you spend real money on something and it really doesn't work, I think most people I know would err on the side of returning it and claiming a replacement/refund. It might also be worth mentioning that many places have explicit consumer protection laws that cover this kind of situation, so vendors/manufacturers can't just brush their responsibilities under the carpet because providing actual customer service people to deal with customers is expensive.

dclara 13y ago

Agree. Google is not a hardware company. Other than data collection, do they know how to build hardware systems? I don't mean the technical details which they can buy from acquiring engineers. What kind of new vision do they have in the home automation industry?

psbp 13y ago
I'd imagine that it's very close to Nest's vision now.
- dclara 13y ago
  Do you think it's better than Honeywell? http://www.homedepot.com/p/t/203926327# http://www.homedepot.com/p/t/203926327#

spinchange 13y ago

I am reminded of so many great and formerly dominant tech giants that have pursued a similar course of deep investment, acquisition, and R&D in newer and more cutting edge technologies outside of, or tangential to their main engines of revenue and dominance without ever fully moving beyond those engines. Thinking specifically of companies like Intel, Microsoft, Cisco, et al. All spent (and continue to spend) literal billions on acquisitions and R&D and yet all still pretty much make their money from their original core competence. I think Google's case is simply more ambitious. Android is probably their second biggest adoption success after search/web apps but it seems evident they're not satisfied with the financial ROI of it... It's a defensive thing. tl;dr: Pivoting is very hard and history is full of brilliant companies that have tried and never been fully able to.