Don’t Underestimate Google

There has been a lot of criticism about Google in the tech blogosphere. Most
of the criticism was directed towards the beta-ish nature of their
applications. In fact, our own Eran wrote a scathing post on Google recently. I have also seen many people
in the tech blogosphere making predictions like “Facebook will kick Google’s
ass”, etc..

Eran’s criticism is valid and Google Chrome is, in fact, pretty immature.
Similarly, the criticism by other tech bloggers about Google’s products are also
valid within a narrow domain. But, all the Google critics are missing a very
important point which I want to highlight in this post.

There are two types of companies in the world, companies with products and
companies with a vision. Google belongs to the latter category and there are
only a handful of companies in that category, with Microsoft being one of them.
Bill Gates had a clear vision for his company: he wanted to put a PC on every
desk. This vision drove Microsoft’s operating system products and they did
manage to put a PC on every other desk (well, not literally). Similarly, Google
also started with a vision, to organize all of the world’s information.

The similarity between Google and Microsoft ends right here. Even though
Microsoft’s core vision was to put a PC on every desk, they diversified and
moved into areas outside of their core vision. Their office products, their
server products, their Xbox line, etc. have become so successful individually
that Microsoft is no longer just tied to their original vision.

The case with
Google is different. They are still focused on their initial mission to organize
all of the world’s information. Everything they do, whether it is Google Apps or
Google Books or their Chrome browser or even their investment on research
related to alternative energy sources, is linked to their original vision. They
just want more and more information on their servers. That is the bottom line
and that is why Google still considers Search to be their core business.

Once
Google stores “all” of the world’s information on their servers, they will
“know” about every citizen of this world. They will “know” what their interests
are, they will “know” about what is happening in everyone’s life, etc.. This is
a powerful position for a company to be in and, in a way, it is a dangerous
thing to happen. Once they have all of the world’s information and once
they understand what every citizen thinks, they can monetize it in virtually
unlimited ways.

Like many tech pundits, Steve Ballmer also thinks Google Apps productivity
suite is a direct competitor to Microsoft’s Office suite. When asked about
Google Apps, he recently said “People don't use it. People try Google Apps, but they
don't use it. You can't even put a footnote in a document!”. Well, Steve Ballmer
also misses the point. As I told in the previous paragraph, Google Apps itself
is just a footnote in Google’s grand vision. In fact, Google doesn’t expect
consumers to use it but, rather, they just want them to try it.

Google takes an
entirely different approach to putting their products into mainstream use. They
don’t compete with other products head on but, rather, slowly change the
consumer behavior towards Google products.

Before Google, people used directory
services like Yahoo to plough through the web. Google came in and asked the
users to “try” their new search engine. Slowly, but steadily, it changed the
consumer behavior itself. From using directory services to find a website they
want, consumers were “trained” to use the search engine to reach their
destinations. We saw the paradigm shift in the consumer behavior and the very
beginning of the long funeral for Yahoo.

When Gmail was released as a barebones
email system, people scoffed at it and wondered why consumers will move away
from the established leaders like Hotmail or Yahoo Mail. Instead of releasing
Gmail to public and compete with Hotmail and Yahoo Mail, Google asked consumers
to “try” it out. Slowly, but steadily, people switched over from Hotmail and
Yahoo Mail to Gmail and never went back. Yes, Hotmail and Yahoo Mail are still
leaders in this category and Gmail has a long way to go before becoming a market
leader. But Google is slowly changing the consumer behavior on how they use
email. Consumers who bought into Gmail way of doing email consider Yahoo and
Hotmail as fossil age messaging services.

It is going to be the same case with
Google Apps productivity suite too. Google wants consumers to “try” out their
productivity apps so that they store more and more of their information on
Google’s servers. They offer functionality like word processor and
spreadsheets as a way to lure more people to put their documents online. Premier
edition is just a way to diversify their revenues as they lure more and more
people to take their information (read documents, spreadsheets and presentation)
to Google’s servers. On the way, Google will eventually change the consumer
behavior with regards to productivity apps in a profound way.

Mr. Ballmer may
think that people are just trying out Google Apps, but even that could be
dangerous for their cash cow because Google is slowly but steadily changing the
consumer behavior. Google doesn’t want to compete with Microsoft head on but
Microsoft’s office suite might end up becoming collateral damage in their march
towards organizing all of world’s information.

Finally, I want to offer my take on those pundits who were talking about how
Facebook has the potential to put Google out of business. First, they fail to
understand that Facebook is just a product company within a narrow domain. In
fact, if you subscribe to the same school of thought I am subscribed to,
Facebook is just a features company because we consider the web to be one big
social network and the so called social networking sites as just features in
this big social network. There is no way such a company can put Google out of
business. There is a reason why Google has hired so many scientists, engineers,
thinkers with Ph.D. degrees. They have a grand vision and a much grander
strategy. Please don’t underestimate Google.

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