Google Hits and Misses
By Eric Goldman
BusinessWeek ran an article on Google’s new product launches entitled “So Much Fanfare, So Few Hits.” The article’s basic thesis: “after sparking substantial buzz, most of Google’s nonsearch offerings quickly fade from view…[a]n analysis of some two dozen new ventures launched over the past four years shows that Google has yet to establish a single market leader outside its core search business….” The scorecard includes:
* Google Maps, #2 in its category behind Mapquest. I use Google Maps a lot; it’s a terrific service. I especially love the ability to drag. I have found numerous mistakes in it, however, so I’m always wary of accuracy.
* Google News, the #2 news aggregation site. I also use Google News a lot, although I don’t understand how Google decides which sources to index.
Misses (So Far)
* Google Blog Search, which has only 17% of Technorati’s traffic. I use Technorati over Google Blog Search in most (but not all) cases. I especially like Technorati’s ability to see the quantity of a blog’s inlinks as part of its search results. This gives me a quick way to assess a blog’s level of activity/visibility. In contrast, Google’s relevancy algorithm for blogs yields goofy results. However, I am frustrated with Technorati’s broad and deep errors, which is why I use Google Blog Search as a backup. However, it does take me extra clicks to get to Blog Search; that dampens my enthusiasm as well.
* Google Talk, with 2% of MSN Messenger’s users. IM has high switching costs and strong network effects, so it may take a long time for Google to make inroads here. For now, I strictly use AIM, which is a competent product that most of my contacts use.
* Google Finance, which is the 40th most visited finance website. I really don’t understand Google’s value proposition here, so I have no idea why I would use this.
* Gmail, which has only 1/4 the number of users of Yahoo’s and MSN’s email offerings. I think BusinessWeek is being a little unfair here. Gmail launched just a couple of years ago and has restricted its enrollment. There’s no question that Gmail is a superior product than Yahoo’s email and Hotmail. I still rank Gmail as the best email service I’ve used.
* Orkut, which has 1% of MySpace’s traffic. I did check out Orkut when it launched and even invested some time in it, but ultimately I found the service was slow/unstable, and there really wasn’t anything much I could do with it. I haven’t been back to Orkut in a couple of years and I have no reason to return. Part of the problem is that I’m outside the core demographic. I still invest a little in LinkedIn, but I haven’t really gotten much value out of that either.
I would add Froogle to this list of misses. It gets one of the five coveted tabs on the home page, but it certainly hasn’t had much impact on online shopping, nor do I think it’s had any appreciable drag on the success of sites like Shopping.com. I use Froogle occasionally; it works well for very esoteric shopping inquiries, but I can’t imagine why I would use it regularly.
The article’s explanations for these misses include Google’s inability to do good house ads/cross-promotion due to its simple user interfaces, poor initial product quality, disenfranchised product managers, and Google’s “experiment early and often” philosophy with the expectation that a majority of experiments will fail.
Given this track record, the BusinessWeek article is 100% correct that it is typically premature to crown Google the marketplace winner before Google has actually successfully competed in the market.
This article spurs 2 other observations:
1) I’ve never been a huge fan of the “throw everything against the wall and see what sticks” approach to product innovation. I understand that it’s not always easy to identify winners before launch, but there are a lot of hidden costs to this approach. Each product offering requires a certain amount of investment/support before launch, such as marketing, QA, legal support and compliance work. To keep the experiments cheap, companies often cut corners on this upfront work, but poor planning/diligence can undermines the probability of success and lay the seeds for future problems if the product does get some traction. Furthermore, when it’s not clear if the company is planning to stick with the product, users have some disincentive to commit/invest in it, which reduces the probability of success as well.
Meanwhile, if the product fizzles, some users who liked the product will be bummed when it’s killed. To the extent these core users are the company’s most loyal customers, the company is alienating the wrong people.
As a result, I think companies should be a little choosy about what gets released and then invest adequate resources to give those offerings the best chance of success. This doesn’t seem to be Google’s modus operandi, and over time I think their high rate of product fizzles diminishes the Google brand and my willingness to rush out and embrace their latest offerings.
2) As the BusinessWeek article points out, Google biggest risk isn’t new product flameouts, it’s middling successes. Flameouts are easy–kill them quickly and mercilessly. The experiment still cost some upfront investment, but a quick exit avoids ongoing resource drains.
In contrast, middling successes require constant attention from many facets of the company–e.g., engineering (especially for bug fixes and code integration with new offerings), finance, legal, marketing–without necessarily producing the desired returns. Meanwhile, they consume a lot of managerial attention–someone is constantly deciding whether to invest, maintain or kill as well as dealing with all escalated issues.
So, in a diversified empire with lots of so-so marketplace successes, managers are constantly paying attention to maintaining the underperformers rather than investing in the next star. Ultimately, this makes an entire enterprise gummier–it gets harder for things to get done, slows down the pace of innovation, and gives an advantage to competitors who aren’t worrying about maintenance. As a result, I think Google’s shotgun product “strategy” depresses its prospects.