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Summary:

Every year, dazzled by Google’s massive presence on the web, someone offers a wildly bullish prediction for its stock in the coming year. To which I say: We’ll see. So rather than another set of stock predictions, here’s a to-do list for Google in 2010.

Call it the juggernaut factor. Every year, dazzled by Google’s massive presence on the web, someone offers a wildly bullish prediction for its stock in the coming year. Wired pluckily predicted Google at $1,000 in 2007. (It peaked at $747.) A year later, Credit Suisse saw shares reaching $900. (It fell to $307.) Last year, Motley Fool thought Google the “best stock for 2009” – not really true: AMD, for example, is up 359 percent vs. Google’s 102 percent gain. Now, the histrionic Jim Cramer sees Google hitting a record high in 2010.

To which I say: We’ll see. Predictions are like Christmas toys — they come tumbling out in late December, only to be cast aside and forgotten a few weeks later. It’s much more useful to ask: What would it take for Google to have a blowout year? What would the company need to do to meet these bullish targets? So rather than another set of stock predictions, here’s a to-do list for Google in 2010.

1. Make me click on display ads.

And not just me. Many longtime web users can’t remember the last time we clicked on a display ad. (It’s been a few years in my case.) The more we see, the better our minds learn to instinctively tune them out. It’s no wonder display-ad revenue has been falling while search ads have been rising.

Making display ads as targeted and unobtrusive as search ads may be an uphill battle, but that was a reason for Google buying DoubleClick. It’s coming up on three years since that $3.1 billion deal was announced. Since then, there’s been Ad Exchange 2.0 and lots of talk about a “display ecosystem.” 2010 is the time to deliver on that promise. But it’s not just about wooing new advertisers online — it’s about getting online shoppers to notice display ads again.

Google’s Jonathan Rosenberg recently noted that display ads “seem to work very well” on some mobile devices because “there’s much more of a dynamic of forced engagement with display.” “Forced engagement” sounds like a shotgun marriage, but if people are less blind to mobile display ads, this area is that much more of a priority.

2. Forget hardware. Focus on Android Market.

There are some businesses Google doesn’t need to be in, and selling smartphones is one of them. Yes, it’s a wonderful way to upend an industry that needs shaking up, but subsidizing the costs necessary to make the phones price-competitive could hurt Google’s profit margins for years. Google management may not care about that, but investors will.

A more immediate need for Android phones is an app store that can rival what Apple has created. Apple’s control-freak tendencies in running its App Store is a weakness to be exploited, but Android Market has been slow to move. Android Market is still a fraction of the App Store’s size (16,000 apps on Android Market vs. 100,000-plus for the App Store), and the lack of unified standards for myriad Android phones discourages developers. As AppleInsider noted, Android Market is “more like a free rummage sale compared to an actual retail store.”

For most smartphone consumers, the features on Android phones and the iPhone are similar enough, so the battle for a competitive edge will be fought over the number and quality of apps. That makes Android Market a bigger priority for 2010.

3. Make enterprises pay.

Ask Eric Schmidt what second act Google has planned to supplement search and he’s likely to mention Google Apps. He calls the enterprise market the next “billion-dollar opportunity,” with Apps leading the way. More than 2 million businesses are using Google Apps globally; and although those with fewer than 50 employees use it for free, Apps bring in hundreds of millions of dollars a year.

Selling enterprise wares is one thing, and supporting them another — especially when you toss in concerns companies have about moving their data to the cloud. As we’ve seen, when a company’s servers go down, employees gripe privately. When Gmail suffers an outage, it makes headlines. And as Sebastian has pointed out, Google will be upping the ante with Chrome OS.

Google faces other issues it needs to address longer-term, such as improving its position in popular areas like real-time content and social networks. For 2010, the immediate question is where new revenue will come from. That means effective display ads, an improved storefront for apps, and more enterprise sales to big companies.

Hitting all those marks is a tall order. Together, they just might help Google achieve the bullish performance some are expecting. But given that each of these tasks face challenges, Google is more likely to see a year of strong, but not spectacular, growth.

Image courtesy of Gigazine.net

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  1. One thing that needs to change in 2010 – advertising models Saturday, January 2, 2010

    [...] Kevin Kelleher talks about this in his To-Do List for Google post at GigaOM and how at the same time display ad revenues have been dropping in general they have been on the rise on mobile devices. While I agree with Kevin when he says it is about getting online shoppers noticing display ads again I think it is going to be a much bigger up hill climb that he, or others think. [...]

  2. it’s a pitty that you never click on ads.. advertisers should put some information or useful program on another side.. personaly i think that web publishers should not only earn from ads in $ but also in “click” that will bring traffic “back” to their website/blog

    1. Better search, no more link farms with junk text.

    I wanted to build a tunnel maze with my son for his Gerbils. Since they destroy everything, what better to use then Bamboo? So a quick search for Bamboo poles in our area. Result pages on Google all junk. Link farms with clearly no info even a “Page coming soon” showed up under the first 3 Google returns(with links sponsored by Bing). Pathetic. Bing was a little better.

    I don’t think keyword search will prosper in this decade. Looks to me like the spammers and scamers are better at analyzing and reverse engineering (Page Rank) then Google and Microsoft is in analyzing their stupid scam pages.

  3. ana ulin .org — "Google faces other issues it needs to address longer-term, such as improving its position in popular…" Sunday, January 3, 2010

    [...] – Google’s To-Do List for 2010 – GigaOM [...]

  4. Cookie Monster Sunday, January 3, 2010

    I disagree that 100,000 apps is something to shoot for. Too many of the iPhone apps are shovelware. You have companies out there that are focused on just creating as many apps as possible because they know a few people will buy them.

    I’d much rather see a smaller number of higher quality, more useful apps on Android. But unfortunately I suspect that if Android takes off it will get the same crap.

  5. Very please to see #1… the effectiveness of display ads is a problem I’ve struggled with. And yes, this is a blatant plug in a way, but I’m very excited to have a working prototype of what I call a #SmartAd, which is a Flash ad that advertisers can update via Twitter (by using the #SmartAd hashtag). A working example can now be seen with @IslandTresses ad on marthasvineyardyoga.com. I hope that making ads Social will inject new life and effectiveness into the ads we’ve all trained ourselves to ignore.

    A strong footnote for #2 should be augmented reality – here’s another area where Google is already racking up a lot of cred in my book. Goggles’ initial success tells me that AR is going to be very important in emergent tech this year.

  6. 5 reasons why the Google Nexus One will not trouble the iPhone » Techilicious Monday, January 4, 2010

    [...] of quality apps: As Om Malik rightly points out, its time for Google to invest a lot of time in improving the Android market. Big name developers [...]

  7. I expect Google to attack a more lucrative area – Credit Cards (aka Google Checkout) which so far has been dominated by New York firms at high cost to consumers and merchants and is ripe for superior technological solutions.

  8. Ce que devrait faire Google en 2010 | Pure geek Friday, January 8, 2010

    [...] : GigaOM (02 janvier 2010) Share and [...]

  9. Forbes On Rubicon Project Consortium; M&A Talk For iCrossing; Pull Over! NAI Busts 10 Ad Networks Tuesday, January 12, 2010

    [...] new advertisers online — it’s about getting online shoppers to notice display ads again." Read more. The click died a while ago.. but many still look at it as the key success metric no matter what [...]

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