Other side of Google Story

Before you start reading this blog I want to make you aware that I am big fan of Google like many of you but I am playing the devil advocate to fuel debate. I am in minority group who though being an ardent reader didn’t like the book Google Story because I perceived the book to be one of the marketing techniques of Google rather than its true story. There were only positives about Google and that is what I see is the perception of most of the people. People have been made to believe that Google stands for philanthropy, they want to make life of people better by providing them access to vast amount of information at low cost. At same time Microsoft is being perceived as giant monopoly crushing any opponents in the industry with only aim to earn huge profits. Every computer science graduate dreams to be in Google and brand Google now stands for innovation, noble cause. There are ample of articles and cases that document work culture at Google, their success story and their noble intention. People are speculating that there is nothing that can stop Google’s growth. But there are few people who have raised doubts on Google. Most famous being by Dr. Benjamin Edelman, assistant Professor at Harvard Business School, whose article in HBR about how Google’s Ad deal with Yahoo is nothing sort of monopoly was really alarming. This blog has been inspired, in fact most of points have copied from famous article ‘Google Engima’, published by Booz Allen and I am just putting my interpretation of that. So credit goes to them for these insights which I think we should know before we try to emulate Google in our business.

Let’s first see the Google’s claim of providing information for free as no noble vision but rather perfect business strategy. It is similar to Microsoft strategy of providing Internet Explorer for free to destroy Netscape. However Microsoft was criticized for its action while Google actions are being considered as noble. That’s strength of good marketing communication. I know many of you won’t agree on this so let’s get some clarity. If anyone looks at Google revenue stream then it would be crystal clear that online advertisement business is its cash cow which generates more than 80-90% of its revenue. Now answer simple question when would online advertising industry thrive? Only when there are more users online i.e. using Internet. So who are the competitors of Google? Anyone who provides users with utility that doesn’t require user to use Internet. So if Google provides those utility online and with reduced cost in fact for free and similar or better performance then users would prefer online version then offline one. Thus it is a direct competition for Microsoft. It is very famous strategy of using complements to drive the main product. Google by its support to open source, developer group is doing nothing but reducing the cost of complements. Now look at all the product that Google gives out for free like Blogger, Google Docs, Maps etc and you will this why they are free. Because they make people connect to Internet and moreover by using Google products they get more information about the user preferences which turn helps it search engine. In fact the success of search engine lies with heavy usage of Google by people. Microsoft office suite is expensive and offline utility so Google came with its online suite. Gmail provides Google with one more avenue to earn through advertisement. So get out of philanthropy its business and Google derives its strength from this strategy which acts as big barrier of others. Let’s understand that now.

Lot has been written about 20% time which Google employees are given to work on areas of their interest and the liberty they enjoy. People have concluded this has been reason of Google being highly innovative and ahead of everyone. This strategy works for Google because the cost of failure of its new product is much cheaper for them. This is because Google normally introduces half developed product as Beta version in market and entire Google devoted fan club starts using it and promoting it. It provides them revenue from that stage itself through advertising and also provides important data on customer behavior. Other fact is that range of the compliments that can be developed are also huge. So any work done by its employees in those 20% time doesn’t go wasted. In fact it provides lot of learning which is most essential in knowledge industry, satisfaction to employees (which implies low attrition and low cost of attracting new talent) and huge marketing for the Google. If any product is developed successfully then more revenue is generated for itself. However that is not the case for others since cost of failure is too high for them. In fact closer analysis would suggest that this initiative also has complete business sense.

Now next point of contention is Google success because of all this practices or are this practices are being used by management guru’s to be cause for its success. Is there cost-effect relationship? If you consider most of the successful products in Google bouquet have been acquired. Google video was failure but Youtube an acquired entity is success. Other examples are Google Earth, Blogger, Feedburner, Orkut, wiki developer JotSpot are nothing but acquisition. So where is its innovation? Rather it spots and buys innovation and reinforces its own brand as innovator. In fact even the concept of bidding for advertisement was taken from GoTo by Google and it perfected the process later. It was also not its creation.Hey Google fans don’t swear at me I am just providing other side of story which is neither publicized nor communicated. All those fight against copyright restriction for free information is for their business. Ask any student how much dependent he is on Google for code, papers, forums, assignments etc. Google has been involved in battle against copyright material, privacy issues time and again and every time it gets away because it has been able to create an image of a noble organization working in larger interest of society. Its ties with academic world have also help to create this perception. So now answer is Google a case study for innovation or its marketing strategy?

As I told you all before I am big fan of Google and this blog is just one side of tale which is never thought of by anyone. At end of day Google is one the most successful business venture and there is huge learning for every one of us and I sincerely believe that.