Google only has one channel that produces money right now ... AdSense. All their released products are complementary to it ... in fact, I don't know of a single product that isn't.
So you can draw an analogy here ... Microsoft held to its cash-cows (Windows, Office) for too long, although they are showing incremental success in other areas ... like the XBox. Google may get to that point where AdSense will start making them irrelevant, and then they'll be in the same situation.
All big companies face this. Even Apple ... if you'll look closer, they are far too focused on their iTunes Store. And when a cash-cow starts to become irrelevant, although it's still profitable, it's a tough decision to let go.
Why is being focused on the iTunes Store bad? I understand how reliance on the actual software is a bad idea -- although it's rumored that this is being replaced with a web front-end (hence the acquisition of LaLa).
But I don't see how owning such a powerful distribution channel is something they should let go of. Even now it's looking like they could become a major player in not just music distribution but other media (books, video) distribution as well.
> Even now it's looking like they could become a major player in not just music distribution but other media (books, video) distribution as well.
This is where I disagree ... they are doing the same mistake Microsoft did. Right now to develop apps for your iPhone, you need a commercial SDK for which you pay $99 and that only works on Mac OS X.
Do you know how much of a PITA this is? I am on an NDA and I can't give details about what I'm doing right now, but believe me ... dealing with iPhone is the ugliest of all mobile platforms.
When your distribution channel is tied to your software platform, that's when it's starting to smell. When you also have lots of rules about what gets in, that's a first sign it is not sustainable ... throughout the history businesses have always been interested in eliminating the middle-men. That's one reason web-apps are getting so popular.
And now here comes the iPad, which promises to do for books what iPod did for music. I'm failing to see how this will work, since Amazon is already there, and I can't picture myself watching movies on a tablet.
But maybe Jobs knows what he's doing, I really don't know ... what I do know is that my colleagues that were ecstatic about iPhones are now switching to Nexus Ones and Druids. And the iPhone used to be cool, now it's just popular ... the only reason we are supporting the hell of the App Store approval process.
So you can draw an analogy here ... Microsoft held to its cash-cows (Windows, Office) for too long, although they are showing incremental success in other areas ... like the XBox. Google may get to that point where AdSense will start making them irrelevant, and then they'll be in the same situation.
All big companies face this. Even Apple ... if you'll look closer, they are far too focused on their iTunes Store. And when a cash-cow starts to become irrelevant, although it's still profitable, it's a tough decision to let go.