Google’s new directions, Microsoft’s example
Posted by Dimitrios Matsoulis on December 10, 2007
There’s a lot of speculation as to the new directions of expansion that Google is going to take. First of all comes the 700 MHz auction in the US and whether Google will take it seriously or is just testing the water. Then there is the green energy sector that is more of a certainty despite the fact that it is a completely new area for an internet company. So in which direction is Google going to chose to go? In my opinion in the largest possible number of directions, and here is why:
- In just a few years, Google has grown to enormous size with a stock valuation above $500 and enough cash to buy a number of large companies. Investors are used to a company offering enormous performance in the small term and this is not going to change. Something must be done to keep them satisfied and when you have 80% of the online search market sooner or later you have to look elsewhere…
- Google’s dominant market position already has enemies and with time it is going to get worse. Expansion via diversification looks all the more attractive. A recent interview of Microsoft’s Dan’l Lwein a couple of months back at the Gigaom show more or less underlines the fact that a huge company has to investigate all possibilities, in all possible fields. Google is in the same league, it cannot afford to let opportunities go and has to search for them quite actively.
- Most sectors become interlinked. Thus Google’s software mobile platform for new cellphones from 2008 and the online MS Office competitor. We have already seen Microsoft collaborating with Fiat, and Apple with VW and Jaguar respectively for in-car electronics/design, a move unthinkable a few years back.
It remains to be seen how well Google will fare in the mobile sector and in all the areas it plans to get active. We are currently in the third phase of Google’s life. It is neither a small startup nor a company growing to achieve size in order to compete with the big guys. It is already one of the few big dominant guys! Its domination of online search and advertisement is unavoidably making it a threat for all others, a situation with which for example Microsoft and AT&T are comfortable with for years. If Google is to continue its success in the future, it has to get used to and act according to this reality. And this is no other than to be present in a large number of tech sectors.