Ever since co-founder Larry Page took over as CEO from Eric Schmidt in January, Google (s goog) 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.