As I write this, I write only from my vague knowledge of where revenue’s come directly from. However, I do hope to back this up in the future with more numeric backing. My title of the post may be quite strong and negative, but I feel it has reasonable ground to stand on, based on one simple principle. A corporation should stick to and focus on it’s core business, and exhausting resources outside it’s core business could end up costing them their business.
As it is, Google’s primary revenue comes from advertising, they’re the primary source for advertising because of their search engine. While some may say their core business is data, I disagree, as how are they making money off of data. Data simply allows them to better target their ads. With Google’s attitude of “Do no wrong” they are unlikely to profit from the consolidation and sales of such data.
Meanwhile Google is exhausting their resources with little to show for it. Google over the past 5 years has been hiring some of the top talent within Silicon Valley. Paying good salaries for individuals that are supposed to be some of the best software engineers in the industry. I’m not suggesting that the individuals are not sharp, but what has Google truly produced from within it’s own walls? Google has bought many of it’s out lier products, i.e. Google Earth, Google Spreadsheets, Picasa, and others. First if they are to go into these areas they should strictly focus on acquisitions and have a smaller developer base.
Though from my perspective Google should not be investing in any of the three products mentioned above. While cool and arguably good products, how does Google plan on making money from these? If they are exhausting resources and effort into these products, at the expense of improving both search and ad’s they’re not focusing on their core business as they should be
Finally, if Google is not pouring into these two areas, search and ad’s, it only takes being beaten by one to be unseated. As soon as a company is able to do search better, or ad’s better Google will lose the majority, if not all of their revenue. While they may be able to stay around after someone else has become a dominant player, it will only be as a very small fraction of what they currently are.
I’m not predicting that Google will be gone in 8 years, but unless they really start to devote to their core business and quit wasting resources on un-needed areas they will have something to worry about.