Articles like this are more an artifact of savvy PR by Google and Applet than they are a material fact. Technology changes the balance of power, but has no effect on the rules of business. This is like saying that a better running shoe changes the rules of the 100M dash.
Business means being profitable, and Welch understands that. The "old" rules talk about that. The "new" rules are mostly a different way of looking at the old rules and no one has proven that the "new" rules are sustainable. Apple is not a great example of profitablility or marketshare and Google is worse. Google has espoused lots of theories about how to build a great company, but has yet to prove that it has built a great company. Many of you will ramble on about how good people make a good company, how the customer comes first, and all that jazz, and you're right, albeit indirectly. These all support profitability. If your customers are mad, you can win them back or get new ones. If your shareholders are mad they can sell your shares, depress your stock price, and take legal action against you to have your leadership changed.
Companies that embrace technology take money away from those who don't. But the rules of the race are the same: if you are making the most money, you're winning...for now.
Google is doing the same thing that most companies (or individuals) do when they get a lot of money for doing one thing well: they try a million other things. Like the moviestar who decides to make an album or write a children's book, the Google brain has decided that since it solved the search problem it can solve most other problems--and better than their competition.
The good news is that the farm for ideas internally rather than have ideas come from the top down. But you don't have to be smart to have a good idea, and just getting a bunch of smart people in the same place doesn't guarantee good ideas. And what's more, good ideas do not guarantee profit. You can go on and on about how cool Google Earth is or how many of your friends use Gmail, but are these neat products profitable? It doesn't sound like it.
The bad news is that they have started off like so many other arrogant tech companies, and they may end that way.
1. Become an overnight success with one product (which, by the way, was not profitable until 2000 I think) 2. Hire people as fast as you can 3. Start a boatload of other little products 4. Profits wane because competitors catch up and attack your core business 5. Save money by killing the projects that don't or can't generate revenue 6. Lay people off 7. Now you have a bunch of dead product lines, users stop using them and find something else that's interesting, now you're irrelevant
Just because your business succeeds doesn't mean you have to do steps 2 and 3 above. If Google is losing focus on its core competency and overinvesting in non-profitable products they are on their way down already. Their product line is "cool", but that only buys mindshare which doesn't necessarily translate into money.
Slashdot Mirror
Articles like this are more an artifact of savvy PR by Google and Applet than they are a material fact. Technology changes the balance of power, but has no effect on the rules of business. This is like saying that a better running shoe changes the rules of the 100M dash. Business means being profitable, and Welch understands that. The "old" rules talk about that. The "new" rules are mostly a different way of looking at the old rules and no one has proven that the "new" rules are sustainable. Apple is not a great example of profitablility or marketshare and Google is worse. Google has espoused lots of theories about how to build a great company, but has yet to prove that it has built a great company. Many of you will ramble on about how good people make a good company, how the customer comes first, and all that jazz, and you're right, albeit indirectly. These all support profitability. If your customers are mad, you can win them back or get new ones. If your shareholders are mad they can sell your shares, depress your stock price, and take legal action against you to have your leadership changed. Companies that embrace technology take money away from those who don't. But the rules of the race are the same: if you are making the most money, you're winning...for now.
Google is doing the same thing that most companies (or individuals) do when they get a lot of money for doing one thing well: they try a million other things. Like the moviestar who decides to make an album or write a children's book, the Google brain has decided that since it solved the search problem it can solve most other problems--and better than their competition.
The good news is that the farm for ideas internally rather than have ideas come from the top down. But you don't have to be smart to have a good idea, and just getting a bunch of smart people in the same place doesn't guarantee good ideas. And what's more, good ideas do not guarantee profit. You can go on and on about how cool Google Earth is or how many of your friends use Gmail, but are these neat products profitable? It doesn't sound like it.
The bad news is that they have started off like so many other arrogant tech companies, and they may end that way.
1. Become an overnight success with one product (which, by the way, was not profitable until 2000 I think)
2. Hire people as fast as you can
3. Start a boatload of other little products
4. Profits wane because competitors catch up and attack your core business
5. Save money by killing the projects that don't or can't generate revenue
6. Lay people off
7. Now you have a bunch of dead product lines, users stop using them and find something else that's interesting, now you're irrelevant
Just because your business succeeds doesn't mean you have to do steps 2 and 3 above. If Google is losing focus on its core competency and overinvesting in non-profitable products they are on their way down already. Their product line is "cool", but that only buys mindshare which doesn't necessarily translate into money.
Now it's only a matter of time before Google has its own popup ads, too. :-(