Google's All Grown Up, and That's Too Bad

By
A A A

When Larry Page became CEO of Google ( GOOG ) in 2011, Steve Jobs offered him some advice : "Figure out what Google wants to be when it grows up. What are the five products you want to focus on? Get rid of the rest.... They're causing you to turn out products that are adequate but not great." Page took this criticism to heart. Over the last two years, Google has shuttered countless side projects , focusing its efforts on consumer devices and cloud services.

It must be said, though, that adequacy is the defining characteristic of a search engine. Look up a topic on Google search, and you won't find the most factual news stories, or the most insightful blog posts. What you'll get are the popular ones, and the catch-alls -- the links that, like YouTube sensations, have risen to the top because they weigh the least. Even at their best, search engines represent a regression to the mean -- sometimes called a reversion to mediocrity - and they show us some of the limitations of big data.

In other words, Apple ( AAPL ) may have had a talent for picking winners, but Google didn't. The side projects that Jobs criticized were invaluable because they allowed the search giant to tinker its way to innovation. Through a policy called "20% time," it paid employees to work on side projects of their own choosing, hoping that a valuable idea would turn up. Android was released as an open source operating system, its fate left entirely up to third parties. These strategies paid off. Twenty-percent time resulted in a number of unsuccessful side projects, but several big successes, including Gmail. Android's versatility put it on thousands of different smartphones, and it eventually struck gold with Samsung (OTCMKTS:SSNLF). Without the enormous traction provided by these two products, there would be no Google cloud today, and no personal devices sporting the company's rainbow logo.

If trial-and-error was a somewhat unconventional approach, it was also heresy for a data company. Google doesn't randomize 20% of its search results. The ranking algorithms aren't crowdsourced. The mission of big data is to provide us with concrete, measurable truths, and free us from the whims of inspiration and genius. Google seems to have felt this inconsistency because in recent years it's taken a more unified approach. Twenty-percent time has been discouraged through the use of internal analytics, which sort and rank employees like Web pages (and with the same general result). Proprietary hardware was embraced with the acquisition of Motorola, and Google has been trying since at least 2011 to standardize Android OS, most recently by pushing what it calls "the Nexus experience." It seems that the days of tinkering are over. Glass and the Motorola X smartphone are two products that represent the new Google, and they show the dangers now facing it: controversy on the one hand, and mediocrity on the other .

But Google isn't simply growing up; it's growing larger. The hunt for new data has led it to expand its Web services, and played a critical role in the formation of what Bruce Sterling calls "stacks." Google now offers everything from email to word processing software to business apps, and competitors like Microsoft ( MSFT ) sell similar suites. Convenience encourages customers to commit to one stack or another. Google's situation is unique because of the breadth of its products, and its commitment to the cloud. The Chromebook speaks to a hope that, in the near future, customers will spend most of their digital lives on the company's servers.

In that future, Google would be too big to fail. As it stands, a network outage on August 16 saw Web traffic plummet by 40% , and any persons or businesses that relied on the Google cloud were momentarily paralyzed. The odds of a longer blowout are tiny, but the costs would be enormous. The company's data hoard presents another risk: It's an attractive target for governments, regulators, and malfeasants. Growth poses more risks for Google than it does for other tech companies, and it's not clear that those risks are appreciated, perhaps because they're so hard to measure.

In any event, Google now knows what it wants to be. Unfortunately, Larry Page's promise to put "more wood behind fewer arrows" says nothing about his aim. For better or worse, his company has come to represent the orthodoxy of big data, in much the same way that Apple epitomized the mythos of genius. Some of Google's greatest successes, though, came from serendipity; we shouldn't forget the modest little search engine that channeled innovation by letting anyone try their hand at it.

See also:

No Such Thing as Free Facebook for Emerging World Users

Breaking Google Glass Into Pieces: The Costs of Production and Likely Retail Price

Microsoft: Investors Cheer Steve Ballmer's Retirement but Challenges Remain



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks , Technology

Referenced Stocks: AAPL , GOOG , MSFT , SSNLF

Minyanville

Minyanville

More from Minyanville:

Related Videos

Stocks

Referenced

Most Active by Volume

16,960,420
  • $17.2807 ▼ 16.56%
7,389,506
  • $118.75 ▲ 0.98%
5,829,259
  • $38.695 ▲ 2.83%
5,052,105
  • $76.2715 ▲ 0.85%
4,934,229
  • $10.601 ▲ 2.03%
4,889,550
  • $17.095 ▼ 0.03%
4,516,079
  • $52.46 ▼ 10.26%
4,329,826
  • $40.915 ▲ 0.40%
As of 11/26/2014, 10:00 AM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com