Financial results from Google last week were one small disappointment. Yes, the first quarter of 2016 Google had revenues 27% higher than the same quarter of last year, but expected more. In addition the profit grew only 5% which means that the costs to sell more also climbing steeply.
If we think him coldly Google has had great innovations along its history, but lately not fine anda entirely. The search engine quick and efficient, its advertising platform (the source of all income), Android, YouTube, GMail and Google Docs, these three past through acquisitions but very well developed, are their large engines. But all these names sound us “old”, they are not new products recently presented.
With the switch to Alphabet, moreover, the embarrassments have been exposed. The losses that formerly were compensated with other benefits now remain outside the umbrella of Google. And it is clear that innovations that were supposed to would be disruptive as Nest, roboitica, Google Fiber and so on are a non-negligible source of losses.
Innovation loosens, but not the improvement of products
Let’s be realistic, Google has time not innovate with a groundbreaking product. It has become a company that makes iterations of what already works. It is true, this does well very, with a skid (nobody is perfect).
Noteworthy are the improvements we see in Android. In the search box are always trying new things that improve the information provided to us searches (with some controversy because the organic information without having to go to another web increasingly is higher). YouTube is an excellent service, with very interesting innovations (although competition is becoming more pronounced). Google Docs is amazing, each improvement makes it better. Gmail is still, for me, the best email service free that there is.
But Google fails to bring out a groundbreaking product. It seemed that Google Now was going to be, but they fail to take off and run as it should, makes many things but none perfect. They fail to get a social service compared to Facebook or Twitter, despite multiple attempts (Buzz, Google Plus) that stepped seated products (Gmail, Youtube) at the expense of burning its users.
Greatest Giants have fallen
The problem of a large enterprise that fails to innovate but iterates its existing products is that they can fall. It may seem right now silly saying that Google is going to sink, but it was also in 1991 say that IBM could leave if the reference of the technology and the following year gave some brutal losses which put in doubt the viability of the company and which marked the beginning of the end of his career as a manufacturer of PCs. They were not able to innovate given the avalanche of clones that appeared.
Just 10 years ago, few could predict that Microsoft could lose its supremacy of the operating systems. There were no competitors almost in the market, desktop or portable devices (PDAs of the moment). And yet now they are virtually out of the market of mobile phones, in embedded systems by Linux bets are majority and just dominate the PC, its traditional stronghold which is also in the doldrums. They were not able to innovate enough and quickly to change that was coming (smart mobile phones) and not managed to innovate enough on the Internet until they focused on Enterprise cloud services (though neither are clear leaders).
All this shows us that Google is in danger, the lack of innovation is worrying. As in the case of IBM or Microsoft, it doesn’t mean that they will disappear, only that could lose the thrust they had and become niche companies, with products associated right now work.
What is the future of Android and Google?
Google and Android have a dominant position in the market at the moment. Iterations of their products are clearly very interesting but there are a number of important threats. The first is heavy dependence on revenues from the advertising company (almost absolute) when advertising blockers are becoming more relevant.
And the problem is that there are major companies, like Apple, that are supporting these blockers even on your system, and not just to “annoy” to your competition but because in mobile in many cases degrade the experience of the users (slow pages, more battery consumption).
The results from Google have grown (not all expected) among other things because they are strongly driving the mobile advertising, i.e., every time they show more advertising in this environment. And this could be that users will rebel against this situation. The threat is real. And if income affect iterations of Android might not be as powerful, money is needed for this.