No More ‘Just Google It’
Fortune magazine’s cover article this week asks a question that I don’t think many people had considered: is Google on shaky ground as a company? It seems that Google’s brand has never been more ubiquitous, and thus, why would Google the company be having trouble? Fortune lays it out like this: Google’s revenue is heavily dependent on search and their other new projects (Android, and even YouTube and Gmail) don’t or can’t make them much money. So even though Google isn’t likely to go away, its revenues may stop growing, which will diminish Google as an investment opportunity. Google’s stock price might seem to reflect these investor concerns; it’s down over 20% so far this year, even as the NASDAQ index is up 1%.
Fortune gives plenty of other evidence that Google is struggling, specifically in its ability to compete against websites leading the web’s social trends, websites like Facebook and Twitter. Google does not have a comparable product to Facebook or Twitter, and even if and when they do roll out “Google Me,” it will have a hard climb to achieve any kind of substantial market share. I agree that Google is not poised to compete in non-search areas and earn revenue. YouTube can’t make billions, even though it is very popular. Google’s methods for displaying advertisements, while lucrative, are built around good search technologies; methods for matching words with the right customers, however, are not Google’s specialty. And Android will one day become the most common smart phone operating system, but it won’t net Google any revenue in the process.
Still, I believe Fortune’s main reasoning behind the decline of Google is flawed. Fortune suggests that Google will lose money because users will begin to bypass Google’s search for more personal, social searching. Specifically, when someone wants to know about where to stay while on a trip, she won’t go to Google, but rather will ask her friends on Facebook or use Twitter to get the answer. I find this logic to severely overstate the value of social networking tools. While our friends are a good source of information related to taste (for example, recent research by my advisor indicates that we take advice on what movie to see when we believe we are similar to the person making the recommendation), they are not such a great source on issues unrelated to taste.
Let’s consider that taking a trip example I mentioned above. Let’s say that someone is planning a trip to Paris. While she may have friends who have visited Paris in the past, it seems highly unlikely that she will have a friend who has traveled there so frequently that he can serve as a one-stop reference for what to see. In the end, some recommendations from friends will be good, but so will visiting other websites and probably purchasing a book. The social aspects of the internet are one valuable tool, but for most users, they hardly suffice. The most useful resource Lauren and I had when traveling to Washington D.C. recently was our guidebook, even as we did use the internet as a supplemental resource.
The overestimation of how much we depend on social networking websites does not mean that Google doesn’t have a problem. The real problem Google faces is that, as internet users become more savvy, we need a search engine less and less. Take these example questions below and consider what website you would go to in each case:
1. When was the Battle of Hastings fought?
2. Where can you buy a used copy of Strunk and White’s The Elements of Style?
3. What movies has George Clooney been in?
4. What fun things are there to do in your area this weekend?
For me, none of the answers to these questions involve Google. For question 1, I would go to Wikipedia. For 2, I like abebooks.com, though I know of other sites to use as well, including Amazon. For 3, I would go to IMDB.com (Internet Movie Database). And for 4, I personally like the Isthmus’ website, thedailypage.com. I don’t need to use a search engine to answer these questions because I am not seeking a resource, I am searching for the information itself. There’s a reason Bing markets itself as a “decisions engine”; people know increasingly where to go for the content they want.
Think about the search products that Google has tried and failed to roll out. Remember Froogle, Google’s product search engine? I used it for a while, but found that I trusted I could get a good price by ordering from a site I already knew, rather than taking the risk on some random site that happened to have a slightly lower price. What about Google video search? It was supposed to take all the videos available from around the web and make them searchable. But Google realized that people already knew where to get videos (YouTube) and so Google purchased that company instead. When Google helps you make sense of the whole internet, they are unbeatable. But when we already know where to go to, Google has no products that help it make any money.
The fact is that internet users are getting more savvy about where to get information. That means that sometimes we get our information from social networking websites; you and I could probably think of at least half a dozen widely reported anecdotes that back this up. The power of social connection is undeniable. But even more than that, internet users no longer need to perform searches to find content. And even for less sophisticated users, Google often serves simply to bring up a link. How often have you watched someone search for a website using the website’s name, when they could have just typed that same information into the address bar? If we navigate directly to the site, or get the link through Google, Google doesn’t make money. Google only makes money when our search term brings up an ad and we click on that ad rather than somewhere else. Fewer and fewer internet users fall for those tricks or find the ads very helpful at all.
I don’t know what Google is going to do about this. Maybe they don’t even care. But falling share prices mean angry shareholders. And angry shareholders mean anxious boards of directors. And that means nervous CEOs and possible leadership changes. Google should be worried. But so should Fortune magazine. The more they depend on trends in internet usage as the bases for their arguments (Facebook is popular; therefore, Facebook will replace Google), the more their predictions look outdated years or even just months later. Social networking websites are very popular and likely to remain so, but that doesn’t mean our friends have all the answers.
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