Does confusion reign at Google?
The questions flood my inbox. Since mid-January (its all time high trade), questions have been rife, fast, and furious: "What ails Google/GOOG shares...? Certainly (obviously), the stock no longer acts as a leader."
What can I say? Despite my continuing bullish stance as limned repeatedly here and in the Wall Street Journal interview. (See link in sidebar.) And despite my repeated warnings during Q4 2005 (most in conversation with reader, "AP") that this type of price action could occur at any time -- and that such price action would reflect merely a high level consolidation, etc. And an opportunity to purchase.
That the stock has meandered throughout 2006 seemingly affords people the opportunity to conclude finally that the egg comes before the chicken; that there is no there there (at the Googleplex). Consider, for example, this article from the LA Times (URL embedded in colophon)...
Los Angeles Times
Google Puts Lid on New Products
Realizing that its myriad services are confusing users, it will focus on refining what it has.
By Chris Gaither
Staff Writer
October 6, 2006
MOUNTAIN VIEW, Calif. — In another sign of Google Inc.'s growth from start-up to corporate behemoth, the company's top executives said Thursday that they had begun telling engineers to stop launching so many new services and instead focus on making existing ones work together better.
The shift is a major departure from Google's previous strategy of launching new services rapid-fire and highlights the 8-year-old company's struggle to stay focused during swift growth.
Co-founder Sergey Brin is leading a companywide initiative called "Features, not products." He said the campaign started this summer when Google executives realized that myriad product releases were confusing their users.
"It's worse than that," said Brin, Google's president of technology. "It's that I was getting lost in the sheer volume of the products that we were releasing."
More than 50 products in various stages of development are available across Google's websites. There are so many that the company has collected 35 on a site called "More Google products," which includes digital maps, instant-messaging software, programs that speed up Web surfing and even a search engine for mail-order catalogs.
Analysts said Google was fighting a problem that had historically plagued technology giants, many of which became so enamored with innovating that they forgot to create products that people would really use.
"They created a bunch of crap that they have no idea what to do with," Rob Enderle, principal analyst with Enderle Group, a Silicon Valley consulting firm, said of Google. "What a huge waste of resources."
Google admitted this year that its internal audits discovered that the company had been spending too much time on new services to the detriment of its core search engine.
The initiative's primary goal is to make Google products easier to use, especially by packaging disparate products. For example, said Chief Executive Eric Schmidt, Google plans to combine its spreadsheet, calendar and word-processing programs into one suite of Web-based applications.
Google became famous for its simplicity, winning millions of fans with a mostly white home page and simple search box.
Flush with cash after its initial public stock offering two years ago, Google scooped up hundreds of software engineers and began releasing new services at a dizzying pace.
"The result occurred precisely because we told these incredible engineering teams to run as fast as possible to solve new problems," Schmidt said. "But then that created this other problem."
Surveys showed that Google users could recall a half-dozen or so products, Schmidt said, but "they cannot remember 35."
The company does not plan to tell engineers to halt all new products, Google said, nor does it plan to kill little-used services.
Rather, the effort is more focused on future development. After launching the initiative this summer, Schmidt said, Google canceled several services in development — which he would not describe — and instructed their creators to instead make them features in other products.
"That is a big change in the way we run the company," Schmidt said, describing Google's previous attitude as, "Just get this stuff built and get it out — don't worry about the integration."
Enderle, the analyst, said that attitude showed as search engines such as Ask.com and start-up Chacha.com introduced innovations that Google lacked.
Small slices
Key players' share of the online mapping market, based on number of website visits
Mapquest: 56.3%
Yahoo Maps: 20.5%
Google Maps: 7.5%
MSN Virtual Earth: 4.3%
Google Earth: 2%
Others: 9.4%
Source: Hitwise
Perhaps. Consider, however, that Google has purposefully obfuscated in the past in its quest to befuddle its competition. Why should this time be any different? This all seems as so much spin to my jaded eyes. The confusion too many diverse products from the Googleplex brings to bear confuses this singular company nary a whit. (The prior sentence has its meta-purpose.) It does confuse most observers, however, in their quest for readily apprehendable answers; desirous of a triptych that will take them to there from here.
This next article is surprising in that its author is...
The Information Factories
The desktop is dead. Welcome to the Internet cloud, where massive facilities across the globe will store all the data you'll ever use.
"But industry has returned to The Dalles, albeit industry with a decidedly postindustrial flavor. For it's here that Google has chosen to build its new 30‑acre campus, the base for a server farm of unprecedented proportion. Although the evergreen mazes, mountain majesties, and always-on skiing surely play a role, two amenities in particular make this the perfect site for a next-gen data center. One is a fiber-optic hub linked to Harbour Pointe, Washington, the coastal landing base of PC-1, a fiber-optic artery built to handle 640 Gbps that connects Asia to the US. A glassy extension cord snakes through all the town's major buildings, tapping into the greater Internet though NoaNet, a node of the experimental Internet2. The other attraction is The Dalles Dam and its 1.8‑gigawatt power station. The half-mile-long dam is a crucial source of cheap electrical power – once essential to aluminum smelting, now a strategic resource in the next phase in the digital revolution. Indeed, Google and other Silicon Valley titans are looking to the Columbia River to supply ceaseless cycles of electricity at about a fifth of what they would cost in the San Francisco Bay Area. Why? To feed the ravenous appetite of a new breed of computer."
... George Gilder on the dawning of the petabyte age. Arguably "surprising" as to its author and his insights. Google/GOOG is not just a company with the best search engine but rapidly morphing in its quest to be...
Well, by now you have a better understanding of the company's objective. And precisely why I have been so resolutely bullish on the continuing opportunity this company manifests. It might not be easy, but try not to allow purposeful obfuscation to obscure the clarity of your long term vision.
-- David M Gordon / The Deipnosophist
What can I say? Despite my continuing bullish stance as limned repeatedly here and in the Wall Street Journal interview. (See link in sidebar.) And despite my repeated warnings during Q4 2005 (most in conversation with reader, "AP") that this type of price action could occur at any time -- and that such price action would reflect merely a high level consolidation, etc. And an opportunity to purchase.
That the stock has meandered throughout 2006 seemingly affords people the opportunity to conclude finally that the egg comes before the chicken; that there is no there there (at the Googleplex). Consider, for example, this article from the LA Times (URL embedded in colophon)...
Los Angeles Times
Google Puts Lid on New Products
Realizing that its myriad services are confusing users, it will focus on refining what it has.
By Chris Gaither
Staff Writer
October 6, 2006
MOUNTAIN VIEW, Calif. — In another sign of Google Inc.'s growth from start-up to corporate behemoth, the company's top executives said Thursday that they had begun telling engineers to stop launching so many new services and instead focus on making existing ones work together better.
The shift is a major departure from Google's previous strategy of launching new services rapid-fire and highlights the 8-year-old company's struggle to stay focused during swift growth.
Co-founder Sergey Brin is leading a companywide initiative called "Features, not products." He said the campaign started this summer when Google executives realized that myriad product releases were confusing their users.
"It's worse than that," said Brin, Google's president of technology. "It's that I was getting lost in the sheer volume of the products that we were releasing."
More than 50 products in various stages of development are available across Google's websites. There are so many that the company has collected 35 on a site called "More Google products," which includes digital maps, instant-messaging software, programs that speed up Web surfing and even a search engine for mail-order catalogs.
Analysts said Google was fighting a problem that had historically plagued technology giants, many of which became so enamored with innovating that they forgot to create products that people would really use.
"They created a bunch of crap that they have no idea what to do with," Rob Enderle, principal analyst with Enderle Group, a Silicon Valley consulting firm, said of Google. "What a huge waste of resources."
Google admitted this year that its internal audits discovered that the company had been spending too much time on new services to the detriment of its core search engine.
The initiative's primary goal is to make Google products easier to use, especially by packaging disparate products. For example, said Chief Executive Eric Schmidt, Google plans to combine its spreadsheet, calendar and word-processing programs into one suite of Web-based applications.
Google became famous for its simplicity, winning millions of fans with a mostly white home page and simple search box.
Flush with cash after its initial public stock offering two years ago, Google scooped up hundreds of software engineers and began releasing new services at a dizzying pace.
"The result occurred precisely because we told these incredible engineering teams to run as fast as possible to solve new problems," Schmidt said. "But then that created this other problem."
Surveys showed that Google users could recall a half-dozen or so products, Schmidt said, but "they cannot remember 35."
The company does not plan to tell engineers to halt all new products, Google said, nor does it plan to kill little-used services.
Rather, the effort is more focused on future development. After launching the initiative this summer, Schmidt said, Google canceled several services in development — which he would not describe — and instructed their creators to instead make them features in other products.
"That is a big change in the way we run the company," Schmidt said, describing Google's previous attitude as, "Just get this stuff built and get it out — don't worry about the integration."
Enderle, the analyst, said that attitude showed as search engines such as Ask.com and start-up Chacha.com introduced innovations that Google lacked.
Small slices
Key players' share of the online mapping market, based on number of website visits
Mapquest: 56.3%
Yahoo Maps: 20.5%
Google Maps: 7.5%
MSN Virtual Earth: 4.3%
Google Earth: 2%
Others: 9.4%
Source: Hitwise
Perhaps. Consider, however, that Google has purposefully obfuscated in the past in its quest to befuddle its competition. Why should this time be any different? This all seems as so much spin to my jaded eyes. The confusion too many diverse products from the Googleplex brings to bear confuses this singular company nary a whit. (The prior sentence has its meta-purpose.) It does confuse most observers, however, in their quest for readily apprehendable answers; desirous of a triptych that will take them to there from here.
This next article is surprising in that its author is...
The Information Factories
The desktop is dead. Welcome to the Internet cloud, where massive facilities across the globe will store all the data you'll ever use.
"But industry has returned to The Dalles, albeit industry with a decidedly postindustrial flavor. For it's here that Google has chosen to build its new 30‑acre campus, the base for a server farm of unprecedented proportion. Although the evergreen mazes, mountain majesties, and always-on skiing surely play a role, two amenities in particular make this the perfect site for a next-gen data center. One is a fiber-optic hub linked to Harbour Pointe, Washington, the coastal landing base of PC-1, a fiber-optic artery built to handle 640 Gbps that connects Asia to the US. A glassy extension cord snakes through all the town's major buildings, tapping into the greater Internet though NoaNet, a node of the experimental Internet2. The other attraction is The Dalles Dam and its 1.8‑gigawatt power station. The half-mile-long dam is a crucial source of cheap electrical power – once essential to aluminum smelting, now a strategic resource in the next phase in the digital revolution. Indeed, Google and other Silicon Valley titans are looking to the Columbia River to supply ceaseless cycles of electricity at about a fifth of what they would cost in the San Francisco Bay Area. Why? To feed the ravenous appetite of a new breed of computer."
... George Gilder on the dawning of the petabyte age. Arguably "surprising" as to its author and his insights. Google/GOOG is not just a company with the best search engine but rapidly morphing in its quest to be...
Well, by now you have a better understanding of the company's objective. And precisely why I have been so resolutely bullish on the continuing opportunity this company manifests. It might not be easy, but try not to allow purposeful obfuscation to obscure the clarity of your long term vision.
-- David M Gordon / The Deipnosophist
posted by David M Gordon | 11:38 AM
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