Friday, January 21, 2011

What might Google 3.0 look like?

Google announced yesterday that they would be making some changes to their executive team and I covered one angle on that here. Even more interesting than the pace of change over the last 10 years is what Google 3.0 might look like. I wrote my MBA Strategy thesis on a future Google business model, but that was two years ago and it seems woefully out of date now. Looking back on it now, it was very focused on moving into new ways to collect information (mobile, social, etc.), enhancing the core advertising business.

If I look at where Google is now, and why they might been considering some leadership changes, a few things jump out at me.
  1. Back in 2000, the way that Google changed search on the Internet was incredible. It was as if they opened a completely new (and large and fast) door to the world of information. But over time, we've become accustomed to that information always being available to us. Information is now expected. It's still a cash cow, but it's no longer a "wow" factor. [Bring Sexy Back]
  2. The Internet is exploding into a social medium. And while there are tons of engineers figuring out new algorithms for unlocking information from social interactions, "social" is an unpredictable area. Who knew that we'd love to send 140 characters, or tell the world that we're checking into the gas station, or buy virtual farmland. Predicting the social internet is like predicting the next fashion craze for 13-14yr old teenage girls. It doesn't always make sense, it's not predictable. And Google is all about data and things making sense. They believe they can predict your next search and potentially the future. There is a disconnect here. [OK Fine, You're a Valley Girl]
  3. After the Internet bubble burst, Google became the "Internet IPO market" for many start-ups. But other than YouTube and Android, they generally didn't treat those acquisition very well. So not only did they develop a reputation as a less desirable end-state for start-ups, but they increased the competitiveness of other funding sources (secondary markets, VC funding, etc..). [Another One Bites the Dust]
  4. As we've seen with examples like NetFlix's use of Amazon AWS, the cost to get large-scale new services out the door is significantly less than it was in the past. This means that start-ups don't necessarily need Google's scale to reach a mass audience, so they aren't as willing to sell out to the Googleplex. [Start Me Up]
So how might they address some of these issues and find new areas of business and revenues? Here's a few thoughts:
  1. Google has cash. Google has distribution reach. Google is still considered "cool" and edgy in many circles (maybe not "Apple cool", but still somewhat cool). But Google is addressing the intersection of TV/Internet like it's 2000 and trying to make it all about ads. This is too easy for the incumbent networks to block. So instead of trying to serve me ads while I watch Mad Men on my Google TV, why not become the next source of cool content? Become the HBO of Internet media creation and distribution. Fund independent producers, directors, writers, bands, actors and other people that will make the next Sopranos, The Wire, Mad Men, etc. And then own the distribution (and ads) for those properties. We know you can reach the TV, PC and Mobile devices, now it's time to deliver truly great content. Start doing entertainment in Googly ways, Google Media.
  2. While my small business appreciates Google Apps, they are more of a low-cost convenience than a business differentiator for us. To some extent they are trying to do a Microsoft "me too", in a Google way. But they don't feel like they really leverage Google's strength, which is in big data analysis. Google sees all the activities on the Internet, but they don't seem to be capitalizing on this information. Maybe it's a tradeoff they made with the Government around privacy, but I would think that "Google Solver" would be an interesting entrant into the Business Intelligence market. Think of it as a combination of Market Research and Business Sentiment and Internet-Scale predictions. I'm guessing that many companies would pay for ways to slice and dice that information.
  3. OK, I don't have a third idea at the moment, but I'll keep noodling on some ideas and fill in this space later. Feel free to add your own ideas in the comments below. 
I believe Google 3.0 can continue to be great, but they need to get outside their shell of only thinking of new ideas in information-centric ways. They need to leverage what they do great (big information) and create in areas whether they have potential to drive new areas (media creation). And the mobile business will grow, but figure out how to take it to the next level as a portable internet device. You've given us the information, not help us do new things with it. 


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