I’m glad to see that somebody besides me sees Google’s moves of the last couple of years as I do:
You could see these adventures in future-making as visionary, or as folly. But there’s another motive that could be driving Google: quiet desperation. Google hasn’t figured out how to make its mobile ads valuable enough, and there is growing suspicion that it never will. In the meantime, then, why not shoot for the moon?
The standard narrative around Google’s falling ad prices is that more and more online activity is taking place on mobile devices, where advertising simply isn’t as valuable. No one has really figured out how to make a banner ad for an app that isn’t obnoxiously intrusive. As for the less annoying paid links that Google insets around its search results and elsewhere in its products, ad “engagement” suffers because of how people use their phones. Sitting at a desk, a user may be inclined to browse, to take an extra second to follow their interests, to click on a tempting ad. But when people pull their mobile devices out of their pockets, they usually have a specific task in mind. Out on the street, looking for directions or the time the game starts, there’s just not a lot of time to click around.
Perhaps it’s too melodramatic to call Google desperate. After all, how desperate can you be when you still reap billions in profits every quarter? But if there’s one thing Page likes to think about, it’s the future. And he’s smart enough to see that the future is getting dimmer for a company that depends upon people surfing the web and clicking ads on PCs. In a recent onstage interview at TED, Page spoke with relish about Google’s many grand experiments to change how the world works for future generations. One thing he didn’t talk about is ads. But he did say he believes in business as the best way to reach that future.
Of the top ten companies in the Fortune 500, most are 120 years old or more in one incarnation or another (three are Standard Oil). The relative newcomers are retailer WalMart (roughly 70 years old) and Apple (just under 40). Google, a relative infant at 18, is undoubtedly searching for its identity. I don’t think it’s alone. I think Microsoft is experiencing a sort of mid-life crisis.
It might be that Apple, Microsoft, and Google will always be the technological giants they are now. Or they might disappear. We’re accustomed to thinking of large companies as eternal but that’s not necessarily the case. Several of the original components of the Dow-Jones Industrial Average no longer exist.
Unlike the last century in which enormous companies rose and have remained part of the landscape ever since, as events unfold I think we’ll be amazed at the astonishing rate at which new companies arise, grow to sizes that were unimaginable just a few years previously, and then vanish as quickly as they arrived. What’s more I think we’ll see the same with whole sectors.