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Google's Schmidt Says He 'Screwed Up' On Social Networking

Posted by Roblimo on from the so-busy-he-didn't-notice-Facebook dept.

"Google chairman Eric Schmidt took responsibility for the search titan's failure to counter Facebook's explosive growth, saying he saw the threat coming but failed to counter it." Note: The original link's landing page was changed after we posted it. The one showing now goes to a Wired article. The same story (coverage of a May 31 conference presentation by Schmidt) also quotes him as saying, unsurprisingly, that cloud services will be 'the death of IT as we know it.'"

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  1. No, "social" isn't Google's problem. by Animats · · Score: 4, Interesting

    "Social" isn't Google's problem. Mobile is.

    Google revenue for 2010 was $29 billion. Facebook revenue was $1.86 billion. If Google was as successful in "social" as Facebook, it would barely affect their bottom line. "Social" just isn't that big a business.

    There are bigger businesses where Google missed out - in telephony, music sales, and movie sales. The ones where Apple is making money. Apple revenue for 2010 was $63.5 billion. That's where Schmidt failed.

    Google is trying to figure out how to monetize Android, but so far, not with great success. Apple has been very successful in using the iPhone to create a direct connection between the user's wallet and Apple's bank accounts. Google tries to do that, but not as profitably.

    Meanwhile, while ordering their people to focus on "social", Google is having problems in their core business - search. Back in Q3 2010, they merged Google Places results into web search, not realizing how easily Places could be spammed. That backfired and got them some bad press. Then there was the Demand Media content farm problem and the J.C. Penny link farm embarrassment. The press then caught onto the fact that Google isn't very good at stopping web spam, "black-hat" SEO started to go mainstream, and Blekko, with their strong anti-spam policies, started to gain traction. Now the FDA and the Justice Department are investigating Google for knowingly running ads for sleazy offshore pharmacy operations. Google may have to pay $500 million in fines.

    That's a classic big-company mistake - failing to run the cash cow properly, while management is distracted with the shiny new stuff.