Is Google (GOOG) being left behind?

By: ispeculatornew
Date posted: 11.03.2010 (3:40 am) | Write a Comment  (10 Comments)

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Don’t say it too loud but it there are some reasons to worry about Google’s place on the internet in the medium to long term. Google used to be the popular kid on the street but that status is increasingly in jeopardy.

What the internet used to be

The internet used to be a much simpler environment. Users from all around the world would connect and start off their session on a search engine. They would start by typing whatever they were looking for, typing search and then visiting the top websites that were ranked by the search engine. That world was ideal for Google because the search engine had developed an algorithm that was far superior. How? Basically it gave users access to better results that were displayed in an easier way. That helped Google gain market share very quickly to the point where using the search engine is now a known verb “To Google” and Google has been the number one way to access the entire web.

Of course, being in such a dominant position has been a dream come true for Google. It has access to more information than anyone else and was then able to give access to advertisers. GM..you want to advertise to anyone looking for a brand new car? Here’s your chance. How can you beat that?

The new internet

The problem of course is that the internet is changing very quickly. If you have seen the movie “The Social Network”, you know exactly what I’m talking about. What used to be cool was the “Open internet” meaning that all information on the internet was within Google’s reach. That has started to change through two major ways. First off, some media outlets have started restricting access to their material to paid users. That is being done through firewalls and while it is still very much a process, it has “diminished” Google’s role in the search for news.

But the more worrying trend is the social aspect of the internet. While Twitter remains open, Facebook, now the most used websites (in terms of time spent) on the internet has shut down its doors to Google. It’s not that the website has anything against Google but rather that it is built on the basis of exclusivity. You can share information, photos, videos and your thoughts with all of your friends and family. And no Google is not a friend by default. That means that a growing part of the internet is outside of Google’s reach and that has to be worrying.

A new way to access the internet

But an even bigger threat to Google is that the internet is changing in a fundamental way. It used to be all about searching for information and then visiting the top websites. That gave Google the best spot of course. Increasingly, the internet’s primary use is becoming about “connecting” with friends, family, etc. Many users now start their journeys on Facebook instead of Google and that trend is very worrying to Google. Do users still search? Yes of course they do. But it used to be 100% users..those days are over and it might eventually be down to much lower numbers. Users are now sharing links on Facebook, helping the social network build its own directory/search engine. All of this is contributing to a diminished role for Google on the new internet.

As if things were not bad enough?

All of these are serious reasons for Google to worry. But there is another big one. Its main search competitor, Microsoft’s Bing, is an investor in Facebook and increasingly a partner with the dominant search engine. They’ve announced alliances. For example, Facebook recently announced it was giving basic access to Bing for its 550 million users. A move like this is a start but it could mean big trouble for Google. If Bing is able to get access to more information because of its relationship with Facebook, there is no doubt it will affect Google’s position.

What is Google to do?

This is not new.. Google needs to get serious about the social internet. It has huge cash reserves and I think that making a major run either through an acquisition (Twitter?) or through a major marketing push for a solid product is critical for Google’s future as the “dominant internet player”.

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10 Comments

  1. Comment by John Hunter — November 3, 2010 @ 6:10 am

    It is a big market and Google should try to do much better in this area. However, they are doing extremely well even while doing extremely poorly in this area. They have done very poorly with their social efforts. The biggest thing they need to do is allow a team of great people to do it right. They have the technical skill and money to do so. So far their management or culture though has failed over and over in this area. It really doesn’t seem that complicated to me. We will see how they do but even if Google doesn’t do better in this area I think they will do very well as a company.

  2. Comment by DomainS — November 3, 2010 @ 8:32 pm

    You forget to mention that Google did succeed in penetrating the cellphone OS market and this is huge. More than that, MS is clearly fading there is no reason to worry about BING. It its stock cannot go much higher is because the company is already big.

  3. Comment by Doctor Stock — November 3, 2010 @ 10:27 pm

    Seriously…. I was looking all over for some information today and couldn’t find it. I wasted so much time… until I remembered, why not Google it! And abracadabra – there it appeared!

  4. Comment by IS — November 4, 2010 @ 4:54 am

    @John Hunter – Very true. For some reason though, Social is becoming like search; only 1 or 2 players (Facebook & Twitter) and the others seem unable to break through

    @DomainS – Yes no doubt, very good point. Just to clarify, I still think the world of Google and their future prospects, I was talking about this specific opportunity (social in search)

    @Doctor Stock – Usually Google does come through:)

  5. Comment by Bob — November 10, 2010 @ 7:33 am

    you forget google has something in social and it is called youtube. Facebook, twitter and youtube are the three dominant social platforms.

  6. Comment by IS — November 10, 2010 @ 7:35 am

    @Bob – Good point. Personally I would not include Youtube in “social”, because it’s not a platform built around managing your connections, ets. But I can see how you would make your point there.

  7. Comment by Unstoppable BM — November 10, 2010 @ 3:25 pm

    It took Google a while to penetrate the cellphone market but it did succeed. I wouldn’t doubt that Google has something up its sleeve. the company is probably waiting for the right time to implement their version of a NEW social network. I already know what they are thinking about.

  8. Comment by IS — November 10, 2010 @ 8:49 pm

    @Unstoppable BM – Intriguing…any hints for us?:)

  9. Comment by Mike — November 16, 2010 @ 8:27 am

    A new fad being called “the new Internet.” Remember AOL? Remember MySpace? Facebook has the recipe right for now… but they too will become too large and eventually start messing things up. Whether it’s 1 year or 3 remains to be seen.

    And Google is getting what it deserves. What made Google amazing was its simplicity. Annoying new features like “Instant Search” and constantly changing artistic logos have ruined the core that made them successful. A message to Facebook: don’t change features that people like. Improve things that aren’t liked, but don’t tamper with things that are!

  10. Comment by IS — November 17, 2010 @ 5:50 am

    @Mike – I think that MySpace is the worst of them all as NewsCorp decided to focus on making money very very early instead of a better product.

    Yes Facebook will probably end falling into the same trap and while Google seems to be getting there, they still the benefit of the doubt for me.

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