There’s a popular meme going around right now on the Internet about how Google is in trouble.
Much has been written (read the links within that last link) about how Google’s search quality is declining and it’s launched a slew of unsuccessful products (Wave, Buzz, TV). They’ve also got a new CEO and seem to be investing shareholder money in some weird things. And the future belongs to the two-headed social/mobile beast that is Facebook and Apple.
The “doom” meme usually extrapolates this to predict the end of the company. The story is that search quality declines, people start to go to other search engines and then advertising dollars follow. This becomes a positive feedback loop (the dreaded doom loop ) and the company now doesn’t have any excess cash to fund new products and can’t find that next billion dollar market.
Great story – and we’re humans so we need stories to make sense of our world – but is it true or is this just a narrative fallacy?
Like all great stories, I’d argue that there’s some truth and some fiction – with enough of both that we can’t resist talking about it endlessly.
So where to start?
Let’s begin with the new product development story. Google Wave and Google Buzz were complete and utter flops – and that’s perfectly fine.
People who complain about Google launching failed products are missing two points:
First, great engineering companies need to have a “ship it” culture. Products need to launch or you end up building Xerox PARC (and everyone knows how that ended). Google is going to ship new products and get them in front of users for feedback.
Secondly, Google’s a large company adopting a portfolio strategy for finding the next great market. Venture capitalists have done this for years; they build a portfolio of companies; a few return an integer multiple of the investment but most break even or lose money. A few winners make up for all the losers.
Most companies aspire to do this. They dream of being able to launch many different products, invest in the winners and cull the losers. It’s business doctrine that you should do this.
But the reality is that most companies simply can’t marshal the resources and build a culture to do so. Google is doing exactly that and, because they’re in one of the most over-analyzed industries on earth, there’s a lot of attention paid to their failures without considering the context.
In fact, if you were a senior manager at Google, you would probably be looking at your product portfolio and thinking it’s okay.
Search continues to throw off cash. You’ve found a few new billion dollar businesses in video (via YouTube) and display ads (via DoubleClick). People increasingly use you for all things map-related. And you’ve launched one of the most successful products ever in Android (it’s worth remembering that a few years ago people said that Europe and Japan were going to own mobile; Google and Apple have single-handedly undone that).
In this context, a few failed products are fine – in fact they’re expected and reinforce that you’re doing the right thing.
So let’s talk about the second complaint: the decline in search quality, errors in maps, AdSense, AppEngine, etc.
There’s definitely a nugget of truth here as a few issues come together at once.
The first issue is simply company scale.
Google’s got 25,000+ employees now and running a company that large requires a different approach than what was required to run the company 10 years ago. Most companies that size lose their way via a lack of focus. Management spreads themselves too thin trying to find the next sexy market while driving more cash out of existing ones.
A lot of the complaints about Google today suggest that there’s a distinct lack of focus going on. The little mistakes: things like places appearing incorrectly on maps or services working intermittently are characteristic of a company that lacks focus and grew too fast.
There’s nothing sexy to fixing this; it requires discipline and people who are willing to do the grunt work required to build out the right set of processes. This isn’t fun, but doing it builds the bedrock of the company and gives engineers more time to work on building the next billion dollar product.
So what about spam?
Google rose to power on the back of the PageRank algorithm which gave us better search results and initially punished spammers. However, whole industries and companies have grown around reverse engineering it to better promote their own agendas. Given 10 years, I’d say that people have done a pretty good job and three years ago was probably the point where the algorithm reached peak effectiveness.
The other trend is that we’ve gotten much more confident asking Google questions we wouldn’t before. When you’re thinking of buying something (“best iPhone case”) or doing something (“good restaurants in Chinatown”) you have probably typed that question into Google once or twice.
And you probably got spammed with results.
The reason isn’t so much that Google’s algorithm was wrong as they lacked the right context.
The reality is that we now routinely search for things that require context for an answer yet we don’t provide any context.
When you are looking for a good restaurant, you have a set of hidden assumptions that only you know.
For instance, that you don’t like pork, that you think the New York Times’ reviews are garbage, whatever.
Google doesn’t know this and so instead it provides you with some sort of context-free, lowest common denominator result. (in food, likely a link to a few ‘trusted’ local newspapers and reviews from spammers/people you’ve never met on Yelp).
The “search quality” here is impossible for someone at Google to objectively measure. Only you can know if the result is “good” or “bad” because only you know what you were looking for.
The geniuses at Google’ are highly aware of this problem and are working on tools to get you to give them context.
The most thinly-veiled attempt at this is HotPot (you literally rate restaurants; they find other people who rate like you and you get recommendations). More subtle examples were Searchwiki and now Google Stars:
When you star something, Google remembers what keyword you entered and what links you liked. They can use this to boost the type of results you receive in the future.
However, all of these attempts at generating context feel a lot like rearranging the deck chairs on the Titanic. They require a huge change in consumer behaviour in order to get a good result. In a world with too little time, its highly unlikely that most people are going to take the time to hand-annotate their search results.
Instead, people are going to expect that Google learn the right context for a search.
We are context creating machines and 500 million of us do it regularly at Facebook. All that friending, sharing, liking and commenting is nothing more than giving Facebook context: who we are, what we like, who are people who are like us.
We’re all scared they’re going to use it to send us freakishly tempting ads, but it could just as easily be used to give us freakishly accurate searches. (The jargon for this is “social search”.)
Zuckerberg et al. know that and they also know that they’re weak in the blood and guts of traditional search (things like indexing, crawling, etc.). Hence they’re jealously guarding the data and working with Microsoft’s Bing to try and come up with a solution. I have no doubt that dozens of Bing and Facebook engineers are currently building a search engine.
And that would be a real threat to Google.
No one has dethroned them as the king of search – spam and all – because their search satisfices. No search engine does a materially better job so users don’t switch and the world is littered with the detritus of search engines that were marginally better than Google (think Cuil). All had great technology but weren’t good enough to get users to change behaviour.
But a contextual search engine could be good enough to get people to switch.
And that could kick off the doom loop.
So how, short of buying Facebook (and they’re not for sale), could Google avoid this?
If I were Google, I’d do the opposite of Facebook.
Facebook is a classic walled garden where you can put data in but you can’t get it out and can’t share it with anyone. Moreover, rather than open up, they simply try to build whatever service they think consumers want.
Want to send a message to Facebook friend? You’ve got to use Facebook’s messaging platform. Share photos? Facebook’s photo app.
It’s the digital equivalent of Henry Ford‘s “Any customer can have a car painted any color as long as it’s black.“
Contrast this with the Open Web. It’s full of lots of little sites that are good at one thing and generate lots of context about us. We review restaurants on Yelp. We mark things as worth reading at Instapaper. We listen to music on Last.fm. We write notes on SimpleNote.
Moreover, we frequently do this with other people, building out a graph of interesting people for each of these different services. One interpretation of Twitter is that who we follow is nothing more than a pure expression of our interests.
But to date, no one has been able to open up the value that’s locked inside both the data and networks of each of these services. This is partly because it’s a search problem and search is really hard.
It’s also partly because each of these services is small and can’t capitalize on their graphs/data.
Enter Google.
Imagine that Google decided to create a framework that allowed any third party service to dump your data and your graph into Google’s search results – if you chose to allow them.
When you performed a search in Google, they would mine your choice of services and friends to get you a contextual answer that was right for you.
Ask a question about Italian restaurants? Those starred recommendations from Yelp come along as do the opinions of your friends.
Looking for a good iPhone case? The tweets from that designer you follow suddenly come back.
Information on collaborative filtering? The search results also include information from the notes you made in SimpleNote.
Sounds interesting, but how to get this data from each of these small-ish companies?
1) Create the framework and open source it. Google’s part way there with Open Social (tech geeks: remember that?).
2) Align the incentives. Offer participating sites a cut of ad revenue from Google searches that reference their data/graph. And then turn around and offer them better ads on their sites because only you can aggregate people’s interests across multiple services.
The big fear of sites here would be disintermediation: that people go to Google instead of their site. However, this is unlikely to be the case. Mobile phones are showing us that people like to use best-of-breed apps for single tasks (like reading, note taking, reviewing, etc.); we don’t use one general-purpose app. This is also reinforced by the decline of the dashboard cum widget products like NetVibes or iGoogle.
Moreover, Google would only handle the ‘search’ part of the equation: all the content creation and browsing and checking updates, etc. would occur on the respective sites. And sites would get more money from better ads and searches on Google.
I for one hope this happens. As a consumer I love the thought that I’m free to choose the best services in the world and can harness the power that they each offer to create a sum that is great than the value of its parts. And then the doom meme can finally die.
NOTES:
This blog post is based in part on a lot of interesting thinking from several different people. I recommend reading each of their posts in their entirety.