Paul Wallbank – Brilliant Communications

Tag: google

  • Google’s alphabet soup

    Google’s alphabet soup

    “Google is not a conventional company. We do not intend to become one.” Writes Larry Page in his announcement the company he and Sergei Brin founded is to be renamed Alphabet with Google as one of its divisions.

    The new company, which will continue to be listed as GOOG on the NASDAQ stock market, will have Page as CEO and Brin as Chairman with the various product lines and products split into discrete divisions under the umbrella holding company.

    Page believes this will increase accountability and initiative within the divisions.

    In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation.

    How well this Japanese style Keiretsu model will work for Google will be interesting. The initial problem for the company is going to be the jockeying for positions within the restructured divisions.

    Google’s management is well known for losing interest in projects and products that aren’t working out and those stranded in ‘orphan divisions’ without strong interest from Brin and Page’s team or big revenues are going to find life frugal and discouraging.

    The plight of Google+

    If you’re a Google employee you’d certainly be lobbying hard today to avoid being stuck in the division lumbered with the dying Google+ social media platform for instance.

    The plight of Google+ may give us some clues to Page’s thinking. At the time of the 2008 financial crisis the company heeded the warnings of The Powerpoint of Doom and clamped down hard on costs. Since the crisis passed, Google has steadily become increasingly cumbersome and increased its headcount from 20,000 in 2009 to 54,000 four years later.

    A restructure is an excellent opportunity to strip out a good deal of that fat.

    For divisions like productivity apps, this sharpened focus may help the product and stir the teams into innovating. A Gartner report last week put Google Apps at a pathetic 2.1% of the global productivity while Microsoft maintains a 94% chokehold on the market. As an autonomous division, the Apps team is going to have to work a lot harder.

    Protecting the core

    Another question is how this will pan out for the core Google business. The combination of search and advertising remains a monstrous cash generator however its growth is slowing as the company struggles with the shift to mobile.

    For the core Google employees, having profits sifted off their division for loss making moonshots may not be the most motivating thing and we may well see Sundar Pichai, the already announced CEO of the Google division, pushing back hard on the claims of other Divisional bosses for capital.

    The restructure of Google is going to be an interesting experiment in how well the Japanese conglomerate model may work in the modern tech industry, if it does then we may see the modern equivalents of US Steel and AT&T develop.

    For Google’s managers and employees however, having the harsh glare of shareholder accountability may not be the most comfortable experience.

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  • Google’s Android problems point the way for the Internet of Things

    Google’s Android problems point the way for the Internet of Things

    As regular security problems are being exposed in the Android operating system, Google and Samsung have announced regular updates to their devices and software.

    For long timers in the IT industry this is a return to the Microsoft days of Patch Tuesdays, the monthly bundle of updates for Windows and Office the company used to issue on the first Tuesday of each month.

    While Android has nothing the like the problems Microsoft did in the early 2000s with the explosion of malware that crippled millions of users, the risks to the Google system are real with some predicting a security armageddon.

    For users, there’s a serious question in the problems facing Android system in that unlike the Windows systems the rollout of updates is controlled by the telcos or handset vendors rather than the software developers.

    As a consequence many older devices simply aren’t being updated leaving millions of smartphone users exposed to malware and having no way of fixing known security problems.

    The problems facing Android are common across the entire Internet of Things, how Google respond the current smartphone security problems is going to be a pointer for the rest of the IoT sector.

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  • Google’s Missed Revolution

    Google’s Missed Revolution

    The slow demise of Google Plus has been painful to watch as the service is slowly wound back ahead of its inevitable quiet burial.

    Mashable’s Seth Fiegerman has a deep look at what went wrong for Google’s nascent social media platform.

    Adding to the company’s distress, early Google+ adopter and advocate Thomas Hawk posted on Facebook his requiem for the service citing how the organisation seemed to lose interest in the product and the departure of Vic Gundotra sealed its fate.

    Google’s Corporate ADD

    Hawk is particularly scathing about Google’s prospects of being trusted again by developers and the marketplace. “By quitting early, Google lost what little goodwill they might have to seed something in the future,” he says. “Who will ever take Google serious with social again?”

    Once again we see the effects of Google’s corporate Attention Deficit Disorder and the message to developers and evangelists is clear – be very careful in devoting too many resources to any new product from the company.

    Google Plus’ decline though signals something far more serious for the company however – it may well have missed some of the most serious shifts in its marketplace.

    The SoLoMo opportunity

    Four years ago when the service was launched with great fanfare SoLoMo was one of the key buzzwords and it was understandable for Google to want a slice of it. Unfortunately the company found that even an business as big as Google can’t force change by management diktat.

    SoLoMo – Social, Local and Mobile – were seen as the big market growth areas and Google’s footprint in all of those spaces was poor. Although Google Places was leading the local search market at the time.

    Google+ was intended to solve at least the social problem with the added advantage of overlaying personal information onto the already comprehensive ‘knowledge graph’ it’s gathered on users.

    Four years later it’s clear Google Plus is a failure and much of that is due to the project being driven from the top down. From its launch the project was about meeting management imperatives and it’s notable in the company’s announcements about the service how little mention users get.

    Google’s price of failure

    The problem now for Google is they have wasted four years on the failed product at a time when Facebook have become the dominant social media platform and have successfully adapted the service to the mobile world.

    Even in Local search, Facebook are making strong inroads into local business advertising, an area Google had the advantage by tying together maps and local search but lost because of inaction and bureaucracy.

    A costly distraction

    The Google+ distraction means the company has missed the entire SoLoMo opportunity and squandered the one area where they had a massive head start.

    Google now face a future where their key advantage is stranded on the desktop without serious integration into social media. At the same time their ambitions to run a payments service seems stalled as well.

    Whether Google+ turns out to be as strategic a mistake for the search engine giant as Windows Vista was for Microsoft remains to be seen but the similarity between the two companies stuck with declining desktop based business models in a world of mobile consumers is striking.

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  • Google Glass goes to the enterprize

    Google Glass goes to the enterprize

    The original Google Glass program closed down at the beginning of this year and bought to an end the first stages of the highest profile virtual reality headset project.

    At the time, the company flagged Glass was entering another stage and now the 9to5Google site reports an enterprise edition is well underway.

    Despite the focus on consumer and gaming applications, enterprise applications in fields such as logistics and safety have been the bigger immediate opportunities for these products.

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  • Getting fat on venture capital

    Getting fat on venture capital

    “Raising money is like ordering dinner,” says startup founder Geoff McQueen about attracting investors. “If you’re only a little bit hungry, you should only buy an appetizer.”

    McQueen was writing about his company, professional services platform Affinity Live, achieving its first round of funding. While the amount raised is a relatively modest two million dollars, the main gain for the company is getting some experienced business people on board.

    Unlike many of the high profile billion dollar ‘unicorns’, cash flow positive businesses like Affinity don’t need large swags of cash to grow. As McQueen points out, big investment rounds put pressures on management and risks the company’s culture changing “from one of discipline and taking on the world to one of comfort and entitlement”.

    Pushing out the owners

    Another risk for founders is they could end up diluting themselves out of the business they’ve built, as venture capital investor Heidi Roizen points out it’s possible for the creators of a billion dollar startup to find themselves broke.

    Roizen observes “venture capital is not free money. It’s debt. And then some”, something that’s overlooked by many commentators who think a fund raising – and the resultant valuation  – goes straight into the pockets of a company’s founders.

    Unless it’s Google Ventures doing the investment, it’s unlikely the founders will be buying Porsches after a VC round and usually the funding goes into growing the business. For many big name startups those capital needs can be huge as we see with Uber where reports indicate the company is currently losing two dollars for every dollar it earns.

    Beating the burn rates

    Most businesses though can only dream of burn rates in the hundreds of millions a year and their needs are far more modest illustrating McQueen’s point about excess capital.

    As we saw in the dot com bust it was the lean and focused companies that survived the downturn, there’s little to think the next industry shake it will be different. That’s why companies like Affinity Live and founders like Geoff McQueen will probably still be around when the dust and hype settles.

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