21 Comments

Summary:

Ever since co-founder Larry Page took over as CEO in January, Google has been getting more businesslike, shutting down projects like Google Health and now Google Labs. While this may be a sign of maturity, it could also make the company less experimental — and less interesting.

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Ever since co-founder Larry Page took over as CEO from Eric Schmidt in January, Google has been getting a lot more, well… businesslike. It has been closing down or winding up a variety of projects and experiments, including Google Health and Google PowerMeter, and now it has announced that it is closing the door on its entire Google Labs venture. Some features will be folded into existing products, but many may simply disappear altogether. While this may be an admirable sign of maturity, it could also make the Google culture less experimental — and therefore also less interesting, and ultimately less successful.

In his first major address as the new CEO of the company last week, discussing Google’s latest earnings results, Page described how he has been trying to get the web giant to focus on a smaller number of product groups and lines of business (his remarks were also simultaneously published as a Google+ post). The Google co-founder said that management had already done “substantial internal work simplifying and streamlining our product lines” because the company needs to put “more wood behind fewer arrows.” Later in his presentation, he added:

It is easy to focus on things we do that are speculative (e.g., driverless cars) but we spend the vast majority of our resources on the core products. We may have a few small speculative projects happening at any given time, but we’re very careful stewards of shareholder money — we’re not betting the farm on this stuff.

Why does Larry Page, all of a sudden sound like your average MBA from Stanford? Could this new note of caution be a signal to investors that Page isn’t some Rollerblading airhead who is going to plunge Google into hot water in his pursuit of web-powered pipe dreams? Eric Schmidt’s presence as CEO used to be seen by some financial observers as a benefit because he provided the “adult supervision” that the company theoretically needed. Could Page be trying to soothe those fears?

Time to get serious?

Another possibility, of course, is that Google has begun to realize that Facebook and Twitter have been eating large portions of its lunch — or what should be its lunch — by taking over the social aspect of the web, features that are becoming more and more important as a signal of user intent, and therefore a crucial part of what advertisers are looking at. All of that chips away at Google’s core business of search-related ads, and explains why the company was so eager to launch Google+, and why Larry Page recently made success in social a key factor in Google’s compensation scheme.

In any case, there’s no question that Page has been trimming down the number of arrows that the company is focusing on — but will he also smother the experimental and risk-taking atmosphere that Google has become known for over the years? Getting businesslike and focusing on product lines is all well and good, but changing a corporate culture in that way can have unforeseen consequences. Projects like Google Health and PowerMeter may not have met business criteria, but they were symbols of what Google wanted to be — namely, a better kind of company, one not solely concerned with the bottom line.

Or time to get bureaucratic?

There have been a number of articles written by ex-Googlers about how complacent and even bureaucratic the company has become — a company that was once the poster child for the Silicon Valley startup scene, with its gourmet cafeterias and Segway transporters, its foosball tables and free daycare. Not only that, but Google was the famous pioneer of “20-percent time,” which allowed employees to follow their programming dreams and gave birth to such products as Gmail. Even 20-percent time has been scaled back.

Obviously, a company with more than 28,000 employees can’t retain a startup culture forever, and the pressure of being a publicly-traded company puts even more emphasis on hitting the kinds of financial benchmarks that Page mentioned in his earnings presentation. And it’s true that Facebook and Twitter are becoming a threat to Google’s core businesses, as we have mentioned a number of times at GigaOM — so it’s good to see the company finally concentrate on putting out a half-decent product like Google+.

At the same time, however, while those experimental projects and features like Google Body and Google Transliteration may not have made business sense, who knows what products or enhancements they might have led to? Even the late, unlamented Google Wave produced some handy features that got folded into Gmail and Google Docs. Focusing on business principles is all well and good, but Page needs to be careful that he doesn’t win the battle for focus and lose the war for the future.

Post and thumbnail photos courtesy of Flickr user Stefan and Wikimedia Commons

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  1. “Even 20-percent time has been scaled back.”

    any chance you could elaborate on that?

  2. Getting mature yes…. Getting boring NO.

    If anything Google has started to become more interesting, they are trying new things and keeping their name in peoples mouths. Last year Google was just a search engine to 90% of people now they are starting to try and be more. And good on them, I think Page taking over as CEO has been nothing but a good thing.

  3. I believed Google is getting matured. I appreciate how they’re working on Google+ hope this would be a great success…:)

  4. Phillip Etorma Wednesday, July 20, 2011

    It does seem to me that Google is losing its mojo and the closing of Google Labs is a fitting symbol of that. It’s nice for investors that they’re becoming a more mature, focused company, but conservatism seldom breeds the type of innovation that Google has been known for in this past decade. Instead, Google may risk the sort of stagnation that Microsoft has been known for in the past decade. Microsoft, instead of innovating, has been reacting to the mobile innovations brought on by Apple and Android and by Google’s search; they’re playing catch up with Windows Mobile 7 and Bing. Google is doing the same right now in the social sphere, reacting to the success of Facebook and Twitter, releasing Buzz and now Plus. It’s great that Larry Page is assuming the more mature role that Eric Schmidt held, but in fulfilling that role who steps in to make sure Google doesn’t get boring and turning into the Microsoft? Sergey Brin?

    I’m hopeful that the shuttering of Google Labs is not an indication of the stagnation that it seems to symbolize. But, it’s hard when considering the shuttering of Google Health and Google Power Meter in the past few months, and the accounts of former Googlers frustrated by the bureaucracy and complacency that seems to have affected the company. Further, when reading about the aforementioned complaints of ex-Googlers, it’s hard not to be reminded of the stagnation that’s affected Flickr under the Yahoo bureaucracy.

    Google is a great company and I hope that their recent moves don’t turn them into a company too conservative for experimentation.

    1. Very good points and its very true about Microsoft, I really don’t think its the direction Google are heading.

      But then again its not where they are going its what’s people will think of them. Introducing voice search and image search, even the constantly changing doodles are keeping Google fresh and on the mind more than ever.
      Without this recent innovation Google would have just been the search engine and eventually sites like Bing might have got the upper hand.

  5. Phillip Etorma Wednesday, July 20, 2011

    It does seem to me that Google is losing its mojo and the closing of Google Labs is a fitting symbol of that. It’s nice for investors that they’re becoming a more mature, focused company, but conservatism seldom breeds the type of innovation that Google has been known for in this past decade. Instead, Google may risk the sort of stagnation that Microsoft has been known for in the past decade. Microsoft, instead of innovating, has been reacting to the mobile innovations brought on by Apple and Android and by Google’s search; they’re playing catch up with Windows Mobile 7 and Bing. Google is doing the same right now in the social sphere, reacting to the success of Facebook and Twitter by releasing Buzz and now Plus. It’s great that Larry Page is assuming the more mature role that Eric Schmidt held, but in fulfilling that role who steps in to make sure Google doesn’t get boring and turn into Microsoft? Sergey Brin?

    I’m hopeful that the shuttering of Google Labs is not an indication of the stagnation that it can symbolize. But, it’s hard when considering the shuttering of Google Health and Google Power Meter in the past few months (both projects I admired Google for undertaking), and the accounts of former Googlers frustrated by the bureaucracy and complacency that seems to have affected the company. Further, when reading about the aforementioned complaints of ex-Googlers, it’s hard not to be reminded of the stagnation that’s affected Flickr under the Yahoo bureaucracy.

    Google is a great company and I hope that their recent moves don’t turn them into a company too conservative for the experimentation that has helped to set them apart from their competitors.

  6. Romero Cavalcanti Wednesday, July 20, 2011

    Thanks for sharing.
    I see the most important error of perception in Microsoft more mature… The lack of communication with average user. In multiple ways, most of them present technology at its most irritating. The dialogue simple (friend) went to the clouds. Microsoft has become synonymous with to dislike intensely or feel extreme aversion… Even with excellent products.
    Google is very dear in Brazil. Google more mature, needs to “listen +” and give more feedback (simply return) for the average user. Google needs to be careful to doesn’t win the battle for focus and lose the war for the future.
    Greetings from Brazil.
    @romerobv

  7.  Wow Google+, what will they do next? Gee, Google is systematically cloning other company platforms and integrating them into Google. First they went after Microsoft, then Apple,Groupon and now Twitter and Facebook to name those few. Golly, got to admit Google has a cunning business strategy ; a personal data collection agency that attracts its people by giving out consumer technologies, then in turn selling the users info for billions, brilliant. Google’s shmuck competitors are trying to invent and sell useful products to people. Competitors wake up! gosh! If a wolf in sheep’s clothes is considered a “Do no evil” friend of the herd, then its a hell of a strategy that works. Even people worried about Big Brother search Google for conspiracy theory’s, Ironic! Luckily most people don’t think. Even though they live in a market society, they don’t ask how can a capitalist company earn billions while giving away “free”and “open” stuff. In fact they gleefully embrace it, slick willy! So you can see Google will have billions more revenue to gain, they will know your wallet, social life, what you read and where you go. With brilliant algorithms to monetize the info they can undercut other companies. Pretty impressive when you think about it, or odd!   

    1. “then in turn selling the users info for billions,”

      Our company spends thousands and thousands every month on Google Adwords and they have never given us anyone’s info.

      They allow us to target keywords by geographic location in search.

      How much do I need to pay to get your specific info from Google then?

      Someone is talking out of their rear end it seems.

      1. Semantics. If it walks like a duck, looks like a duck, quacks like a duck, it must be a duck. The business model is going to take heat, The public is virtually unaware what “free” means. Time will flush this out, as the public clues in. By all means like the duck, but at least know when you see a duck.

      2. You are avoiding the issue. How much do they ask for your personal info and when and where can I buy it?

  8. I am sure Google are very aware that innovation is the life blood of the company (and the industry). And hopefully they will maintain that dimension of their culture. But for all their experimentation and innovation, they somehow missed possibly the biggest development of the modern web. Social and sharing. At the same time it has been noticeable that Google would launch products left, right and centre seemingly at random and without cohesion. Contrast this with Apple’s very measured (and successful) approach. Innovation needs direction.

    Google is changing in order to face the rapidly changing web and mobile landscape. Along with the Facebook threat, Google are fighting an increasingly brutal battle in the field of mobile. And Google needs to knuckle down to face the likes of Facebook, Microsoft, Apple and whoever else may emerge. Many large companies have fallen exactly because they have not adjusted their ways of doing things in light of disruptive and progressive environments.

    The fact that such a large company is reshuffling their deck is admirable. Whether the changes they make are effective, remains to be seen. Hopefully Google will focus on making great products that people want to use everyday.

  9. wolfteam hileleri Thursday, July 21, 2011

    I believed Google is getting matured. I appreciate how they’re working on Google+ hope this would be a great success…:)

  10. I think that “aging” of Google – it’s a natural process. As people get older, so does any business. Each age is characterized by certain features and behaviors that come from these features. The old men can drive drunk on skateboards, or jump on the stairs on BMX. But the risk that they will not recover from a fall injury is very high. The same with Google. They have grown older, their business “tough.” And to participate in highly risky project, as it was at the dawn of their activity, they no longer can. Too much to lose. Everything that is going with Google, I would not measure categories of good / bad, but would call just evolution.

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