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Until the core AdWords business fails, and then the whole thing falls apart.

jonas21 12y ago
This is precisely why Google needs to throw resources at solving big problems away from its traditional competency. By the time their ads business declines, they're going to need something even bigger to take its place to keep investors happy. Is it possible to build a new non-ad-supported software business that brings in $60 billion a year in revenue? Maybe. And I'm sure Google's trying. But it could be that their best bet is to invest in areas where the potential rewards are enormous and few others have the resources and organizational will to invest in.
- sparkzilla 12y ago
  Sorry, I should have been more clear. Until their search business fails. The strategy you outline, and that Google is taking, smacks of desperation, and sends two signals to investors 1) the ad business is declining and 2) the company is desperately trying to find something else that works. However this is based on a false premise. Advertising is not going away. I don't see other media companies making cars -- instead I see them trying to work out new business models in their core area of competence. I suspect that much of this is founder driven. It's often the case that founders don't really like what their business has become. In Googles's case they want their legacy to be more than ads, so they are throwing money at vanity projects. These projects generate good press, and satisfy their ego, but in the real world they have little chance of success, and little hope of returning much to the company. For example, Google Glass.
  - stcredzero 12y ago
    Two questions come to mind: 1) What is the difference between Google Glass and Apple Watch? 2) What's keeping Google from using IP and competency they developed with Glass and putting it into their own watch product?
    - eclipxe 12y ago
      People actually want to wear an Apple Watch in public.
      - stcredzero 12y ago
        Translation: Less tech focus and more customer experience focus. But given that, what would prevent Google from leveraging what they learned with Glass with different kinds of wearables?
    - seanp2k2 12y ago
      1. AWatch doesn't go on your face and doesn't have a camera pointed at whoever you're talking to all the time. Basically, people probably won't punch you or ban you from their theatre / restaurant for wearing it. 2. Not sure how displaying notifications and having a camera with some basic voice recognition is that big of an advantage right now for a smartwatch. Maybe I'm missing something big, but it doesn't seem like Glass did anything that could translate to a smartwatch that smartwatches don't already do better than Glass. Also, they already have Android Wear.
      - stcredzero 12y ago
        > Maybe I'm missing something big, but it doesn't seem like Glass did anything that could translate to a smartwatch that smartwatches don't already do better than Glass. I'm pretty sure they discovered/made things they could leverage with regards to integration with apps/smartphones and voice interaction. They did a lot of work with interactions involving very pared down and minimal visual information. Also, it doesn't have to stop with a smartwatch. What if they had an in-car HUD as well as a background service running on a smartphone that could leverage the HUD, the watch, or any enabled and linked display device? For example, what if he whole system could figure out I was in the living room, then enable a Glass-like interaction through the media PC+remote, with optional voice? (You'd have to activate the voice, of course.) Re: camera -- I can see lots of potential for far more discrete devices and telepresence devices, especially in corporate and government environments.
  - dragonwriter 12y ago
    > I don't see other media companies making cars -- instead I see them trying to work out new business models in their core area of competence. Google's core area of competence is not advertising, advertising is just the means which, so far, has been most efficient to monetize their core competence, but its also a means which has limited range for continued growth. > In Googles's case they want their legacy to be more than ads, so they are throwing money at vanity projects. These projects generate good press, and satisfy their ego, but in the real world they have little chance of success, and little hope of returning much to the company. For example, Google Glass. Viewed a different way, there is a limit to how much money Google can pour into its established lines of business with a good return, and one of the things they use the surplus for is high-risk, long-term, high-potential (but low-probability) return projects. Which it can afford to miss on virtually all of, because if it hits even a couple, it'll provide more return than more sedate uses of that money would, and it can afford to throw money at enough projects that it is likely to hit some winners.

This is precisely why Google needs to throw resources at solving big problems away from its traditional competency. By the time their ads business declines, they're going to need something even bigger to take its place to keep investors happy. Is it possible to build a new non-ad-supported software business that brings in $60 billion a year in revenue? Maybe. And I'm sure Google's trying. But it could be that their best bet is to invest in areas where the potential rewards are enormous and few others have the resources and organizational will to invest in.

sparkzilla 12y ago
Sorry, I should have been more clear. Until their search business fails. The strategy you outline, and that Google is taking, smacks of desperation, and sends two signals to investors 1) the ad business is declining and 2) the company is desperately trying to find something else that works. However this is based on a false premise. Advertising is not going away. I don't see other media companies making cars -- instead I see them trying to work out new business models in their core area of competence. I suspect that much of this is founder driven. It's often the case that founders don't really like what their business has become. In Googles's case they want their legacy to be more than ads, so they are throwing money at vanity projects. These projects generate good press, and satisfy their ego, but in the real world they have little chance of success, and little hope of returning much to the company. For example, Google Glass.
- stcredzero 12y ago
  Two questions come to mind: 1) What is the difference between Google Glass and Apple Watch? 2) What's keeping Google from using IP and competency they developed with Glass and putting it into their own watch product?
  - eclipxe 12y ago
    People actually want to wear an Apple Watch in public.
    - stcredzero 12y ago
      Translation: Less tech focus and more customer experience focus. But given that, what would prevent Google from leveraging what they learned with Glass with different kinds of wearables?
  - seanp2k2 12y ago
    1. AWatch doesn't go on your face and doesn't have a camera pointed at whoever you're talking to all the time. Basically, people probably won't punch you or ban you from their theatre / restaurant for wearing it. 2. Not sure how displaying notifications and having a camera with some basic voice recognition is that big of an advantage right now for a smartwatch. Maybe I'm missing something big, but it doesn't seem like Glass did anything that could translate to a smartwatch that smartwatches don't already do better than Glass. Also, they already have Android Wear.
    - stcredzero 12y ago
      > Maybe I'm missing something big, but it doesn't seem like Glass did anything that could translate to a smartwatch that smartwatches don't already do better than Glass. I'm pretty sure they discovered/made things they could leverage with regards to integration with apps/smartphones and voice interaction. They did a lot of work with interactions involving very pared down and minimal visual information. Also, it doesn't have to stop with a smartwatch. What if they had an in-car HUD as well as a background service running on a smartphone that could leverage the HUD, the watch, or any enabled and linked display device? For example, what if he whole system could figure out I was in the living room, then enable a Glass-like interaction through the media PC+remote, with optional voice? (You'd have to activate the voice, of course.) Re: camera -- I can see lots of potential for far more discrete devices and telepresence devices, especially in corporate and government environments.
- dragonwriter 12y ago
  > I don't see other media companies making cars -- instead I see them trying to work out new business models in their core area of competence. Google's core area of competence is not advertising, advertising is just the means which, so far, has been most efficient to monetize their core competence, but its also a means which has limited range for continued growth. > In Googles's case they want their legacy to be more than ads, so they are throwing money at vanity projects. These projects generate good press, and satisfy their ego, but in the real world they have little chance of success, and little hope of returning much to the company. For example, Google Glass. Viewed a different way, there is a limit to how much money Google can pour into its established lines of business with a good return, and one of the things they use the surplus for is high-risk, long-term, high-potential (but low-probability) return projects. Which it can afford to miss on virtually all of, because if it hits even a couple, it'll provide more return than more sedate uses of that money would, and it can afford to throw money at enough projects that it is likely to hit some winners.