Many people are jumping on the Google is failing bandwagon. Scoble, Loosewire, and others. Here are some contrary thoughts, just to stir everyone up.
To set the stage, here is a quote from Google investor relations site.
We generate revenue by delivering relevant, cost-effective, online advertising. Businesses use our AdWords program to promote their products and services with targeted advertising. In addition, the thousands of third-party websites that comprise our Google network use our Google AdSense program to deliver relevant ads that generate revenue and enhance the user experience.
Lets go deeper. The theme in the comments is that Googles R&D is not paying of, and they are not getting traction on their offerings. Lets look at their 2005 results:
- Revenue – $ 6 billion
- NI before taxes – $ 2.2 bn
NI is after costs, and here are some key ones
- R&D $ 484 million
- Sales and marketing $ 440 million
- contribution to Google Foundation $ 90 million
Comments
- R&D is at 8% of revenue
- Nowhere in the Google investing page does it claim that their model is predicated on R&D or that they will sell the results of the R&D
As a banker I would say the financial statements are in decent balance. If some are concerned about market cap, I would tell them that’s a losers game. Invest your money in Government Bonds.
Googles model is to make money on advertising. The other things they do, keep them in touch with the internets evolution. There is nothing to suggest they will sell Gmail, Google Reader, or Google Maps. However all those services are platforms that place Google firmly in the vanguard of internet evolution, and as an investor, I would be disturbed if they weren’t there.
As a Google user, and avid internet user and blogger, I appreciate the Google model of making my experience simple, and allowing me to choose my content. I try Yahoo, and appreciate the depth of their content, although its a Yahoo world. Microsoft MSN is an entertainment, flashy, kids world. These models are great, and vive la difference.
As far as Gnomedex is concerned, to me thats a yawn. The schedule is comprised of many of the same old, same old. All great folks, whose blogs I avidly read btw. But maybe thats the point. I would learn lots had I been there, but would Google?
Just some thoughts ……
Technorati Tags: google, business+models
Bankwatch 
Same old, same old? I don’t remember when a future presidential candidate (and former senator) showed up to Gnomedex, or any blogging/geek conference that cost only $500 to attend.
Would Google have learned something? You never know where the next idea is gonna come from. But one thing I have learned: it’s the small things that’ll kill you.
Re Edwards, I would question his motivations.
However I will give you the “little things” point.
The larger point, I am trying to get at, probably rather poorly with my rather provocative statement, is that the unmarketing concept as a divergent approach to brainstorming, will require convergent thinking at some point to get specific. I find the current trend of conferences needs a bit more focus. Recently in Toronto I attended the MESH conference, and it was not dissimilar to Gnomedex in terms of schedule, even without Edwards.