Hard Case: Google in 2009: the New Microsoft?

Posted 12/01/2009 at 2:15pm | by Loyd Case

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Google’s problem is that it has too much money.

To understand my statement, let’s roll the calendar back to the era when Microsoft seemed like an unstoppable juggernaut.

Back in the decade starting in 1995, the boys in Redmond were rolling in cash, and trying to find ways to spend it. Microsoft was also a very tribal entity, with different product groups competing over very similar ideas. Sometimes it seemed that the team with the best PowerPoint presentations would win funding – or so it seemed from the outside. Hence, you had products like Microsoft Bob.

Of course, that era also spawned good stuff, like the skunk works project that would eventually become DirectX. Even that effort, though, went through a number of iterations before it was deemed both successful and useful.

Microsoft’s huge profits and cash inflow allowed it the luxury to fund product groups in a seemingly unlimited way. You had huge, unwieldy dev teams, like the one that developed Windows Vista. You had projects that burned through tons of cash, and produced little in the way of profits, like WebTV. But the twin pillars of Windows and Office kept the money rolling in, and forced the company to figure out what, exactly, it needed to do with all that cash.

God forbid that a tech company should actually pay dividends. There seems to be an odd attitude among a large number of big tech companies that paying dividends somehow means they’re no longer startups, or will somehow make them seem old and stodgy. Someone should tell all those pharmaceutical companies that paying dividends means they’re somehow not bleeding edge.

But I digress; let’s return to Google.

Now we have Google Chrome OS and Android, seemingly targeted at very similar markets. Android seems to have hit a sweet spot, with an increasing number of Android smart phones steadily streaming onto the market. By any measure, Android has been a big success, whether the measure is design wins, sales figures or buzz.

A company with more constrained resources might have built on Android so it could support the limited netbook /nettop platform that Chrome OS seems to be aimed at. In fact, companies like Acer are working on netbooks built on Android. But Google has incredibly deep pockets, so you have a bunch of technologists trying to figure out what to do. So we have another OS by a different group.

This sounds pretty tribal to me… like Microsoft in 1999.

If you check out all the stuff on the Google options page, duplications exist. Take Google Directory, for example. It’s Google search… with categories… kind of like Yahoo! Then there’s Google Knol. Why use Wikipedia, when Google is on the case? Only, of course, if you’re looking for actual article entries, which Knol is decidedly short of.

Some of the stuff Google throws at the wall sticks. Google Voice, for example, seems to be gaining some traction. Other initiatives don’t seem to be generating much of a following. I know of few users who have kept up with Google Wave once the initial buzz faded.

As Google grows larger, it becomes a little complacent about its role in the world, like that company in Redmond once seemed to be. Google seemed surprised that authors, publishers and competitors would be upset about the Google Books Library. After all, Google was being so altruistic, making all those books searchable online. What, you mean people wanted to be compensated for their content? How… 20th Century.

Google Voice is another example. Voice works great, unless you happen to live, or have a business in, certain rural area codes, which Google blocks. Google is not, you’ll hear, a phone company after all, even though Google Voice is a phone app.

That whole “we’re giving it away free” thing really reveals Google’s true face. As Google grows, it’s increasingly obvious that it’s not really a tech company. It’s an advertising company masquerading as a tech company.

Despite my criticisms, I’m not really a Google hater. It’s just that Google seems to be repeating the same cycle of behavior we’ve seen in all tech companies as they grow large: AT&T, IBM, Microsoft, Intel. All those companies may create cool tech, but as a tech company grows, it seems to develop a sense of entitlement. It’s very Calvinist, really: we’re big, rich and successful because we deserve it, so the thinking seems to go.

Already, we’re seeing some disenchantment among the tech press and users. All that’s needed now is some serious attention from any of a number of governmental agencies, and the cycle will be complete. 

Will Google let history repeat itself? Google has prided itself on being forward-looking and not behaving like past companies – do good, avoid evil and all that. The danger is that Google will believe that its own definition of good and evil is all that matters. At that point, Google will be just another big company. And that would be the real tragedy.