Google: World domination starts today
Right off the bat in Google's conference call to discuss earnings Thursday, CEO Larry Page had this to say: “People tend to overestimate the impact of technology in the short-term, yet underestimate the scale of change longer term.” Substitute “Google” for “technology” in that sentence – which may in fact be the subtext Page was going for – and it still rings true.
Every quarter, analysts ask Page for updates on some of the company's more ambitious projects like self-driving cars, Fiber or Glass, and the answer is always the same: “It's still pretty early days,” Page replied to one question about self-driving cars, and to another on Fiber, he said, “I think it's really just early days. We’re just getting going on that.”
Such products may well have an impact once these seemingly interminable early days are behind us. But the change that they promise in the future distracts from the significant change that Google is effecting in many ways today, especially as the mobile web begins to mature.
Google said that revenue in the third quarter came in just shy of $15 billion, 12 percent higher than last year and slightly above Wall Street's consensus estimate. The bulk of that revenue still comes from search and display ads, the business that has kept Google growing in a way that keeps investors from caring about moonshot projects like Fiber and cars.
Those ads, however, have crept into many parts of our lives. Even if you use DuckDuckGo or Bing, those search engines could easily land you on a site serving AdWords. Many iPhone and iPad users rely on Chrome over Safari and Google Maps over Apple's map app. Facebook may boast a billion-plus global members, but nearly as many Android phones have now been activated.
In some ways, Google is already closer to becoming the ubiquitous platform that Facebook has long aspired to be. Facebook may be a frequently used app that hundreds of millions of people rely on to stay connected with friends but it's still, for the most part, an app. Google's code has proven far more effective at insidiously weaving itself into our lives. Spend a week online not logging into Facebook? Simple for most people. Try a week avoiding Google's software? That's trickier.
Google's persistent -- yet somehow never good-enough -- efforts to get people to use Google+ lends Google the air of a company still lagging Facebook. And there are many other Google initiatives that have yet to get off the ground: Chromebooks have yet to make a serious dent in the market, and Motorola is seeing growing operating losses despite the Moto X.
But Google seems less interested in making every product a sure-fire hit than in putting its tentacles in as many markets as possible. There are many other areas like enterprise apps, local commerce, and entertainment media that offer Google either mixed success or quiet growth. (Google's “Other” revenue, comprised largely of app and media sales on Play, rose 85% annually to $1.2 billion last quarter.) Yet Google isn't yet considered a leader in any of these areas.
And that's the thing with Google. It's somehow managed to gain a toehold in many markets that are likely to see growth in coming years, but it's done so without much fanfare. Few people rely on the bulk of Google's myriad products, but Google doesn't expect everyone to – just as Facebook doesn't expect its users to stay logged in all day as long as most of them use its social network every day.
So if you don't use Hangouts, you might rely on Gmail. You probably don't use Wallet, but you may frequent Finance. And if you've never bought anything on Play, you almost certainly watch YouTube. Such is the low-frequency ubiquity Google has cultivated. Not a single site or app serving all your needs like Facebook, but a mosaic of services, each modestly discrete in itself. Yet in aggregate, the mosaic begins to feel ubiquitous.
In the short term, Google's achievements seem modest because they are so splintered. Outside of search, Android, and YouTube (the latter two children of acquisitions), the company doesn't have any dominant properties. Books, News, Earth, Android – all are impressive without owning their markets. Orkut, Blogger, Google+ - maybe less impressive but they all have their fans.
As for “the scale of change longer term” that Page mentioned, this is already apparent now. That change is scaling on the level of the aggregate, rather than in any single Google product. Without thinking, I use Google products every day more than I use those of Facebook, Microsoft, AOL, Yahoo or any other company. I wonder if you do too. The jokey ones like Orkut or Picasa perversely make me feel easier about using Gmail, search and YouTube, but I'm not sure if that's a good thing.
Then there's Google Ventures, which has its dollars in 200-plus companies like Nest, TuneIn, 23andMe, and that sweet crude-oil of San Francisco startups, Blue Bottle Coffee. Along with Glass, Fiber, etc., these companies could extend Google's reach into even more corners of our daily lifestyles. Page may have cut back experiments in Google Labs, but he's shrewdly found his influence into an even larger pool of experimentation.
John Battelle, who several years ago dug deep into Google's search DNA, recently wrote an incisive post on Google Now that made me wonder whether Google+ wasn't just a corporate maguffin. The real star that could stitch together the good, the bad, and the ugly Google products wasn't this usable yet bland social network called Google+. It was this virtual personal assistant called Google Now – a bit of software capable of seducing users into giving up their intimate, hour-by-hour acitivites and intentions. As Battelle wrote,
In short, Now is Google’s attempt at becoming the real time interface to our lives – moving well beyond the siloed confines of “search” and into the far more ambitious world of “experience.” As in – every experience one has could well be lit by data delivered through Google Now.Behold the great, underestimated long-term change Google is quietly creating. We once navigated the Web by means of the arms-length search engine. Then we gravitated toward the hands-on social network, a la Facebook. The next Web frontier to homestead is “experience” -- code that can get under the very skin of our beings.
The Web doesn't just want to connect with us, or to connect us with others. It wants to become a part of us. Some people may welcome this evolution and others will dread it. But if you can think of a company that is better positioned to fulfill that function that Google, I'd like to hear it.