Why Google's New Products Need Not Succeed

RJS writes "There have been some industry analysts lately who have called into question Google's real success, claiming that while Google's search remains a big winner, it has missed the mark when it comes to generating profitable, secondary products. BusinessWeek has just such an article ("So much fanfare, so few hits") but others argue that success relative to the size of Google's bread-and-butter (search) ultimately doesn't matter because it doesn't cost Google much extra to keep these secondary services — like Gmail — operational: the Google grid is on and growing regardless of what services are being run on top of it."

Economies of Scale,Buliding a Brand,Marginal Cost

These are all basic principles of economics. Nothing for you to see here, move along.

Re:Economies of Scale,Buliding a Brand,Marginal Co

Well, it depends what you mean by "matters". Does it hurt Google to keep churning out one unprofitable GWhatever-beta after another? Not really, as long as they have their choice of new hires and are paying them with overpriced stock.

But if you own that overpriced stock on the premise that Google is going to keep generating new businesses to complement the only thing they have that makes them money -- then it matters whether GWhatever turns a profit or not.

Re:Economies of Scale,Buliding a Brand,Marginal Co

I think the GP's point is that all these secondary 'misses' are just another way to keep the google brand (and google search and adwords) front in center in Internet culture. One could argue that Coke wastes tons of money developing advertisements and promotions, but they have a very strong brandname and they got it because they continually push it. As soon as Google stops releasing a new beta for everyone to go gaga over once a month, they will no longer hold the spotlight, and people will take them for granted. As long as google uses new products to generate buzz, they will keep generating revenue for their ads.

An analogy would be how Nintendo used to operate... I'm sure they didn't make a ton of money on each game title, but having a good collection of games was critical to get people to buy the console in the first place. This analogy isn't too great though, because nowdays the consoles most likely sell at a loss and the bread and butter are the games and accessories.

Sure, they want to make money

Gmail is by far my favorite web-based email client. Google Calendar has proven to be a very useful tool as well. I use Google Local at least once a week and on and on and on. Maybe Google knows they make enough money on search and that they just want to release good, useful, user-friendly products that are miles better than the competition, even if they aren't profitable. Yahoo's gazillion ads on their email service is one reason I don't use it anymore.

Re:Sure, they want to make money

Gmail offers POP3 for free while Yahoo makes you subscribe to Yahoo Plus.

Also, Google Sketchup [google.com] is pretty neat...

Re:Sure, they want to make money

Maybe Google knows they make enough money on search and that they just want to release good, useful, user-friendly products that are miles better than the competition, even if they aren't profitable.

I think that the point of them doing this is that it adds value to their brand. Maybe they aren't turning a profit with some of their niche services, but those services are driving users to the rest of google's more profitable offerings. Have you used the google text messaging service? It's incredibly useful, and probably not directly profitable for google. Often when i'm driving around and realize i need to go somewhere (for example a hardware store) i can just text google, and seconds later receive a text with addresses and phone numbers of nearby hardware stores. They haven't made any money directly off me with this service, but since I enjoy and use the service so much I'd say I'm more likely to look out for other google offerings and use other google products in the future.

It's kind of like advertising - they're just building their brand and driving more and more users to their products. Even if their new products don't "succeed," per se, as long as they're pretty neat it will help them in the long run.

Re:Sure, they want to make money

Maybe Google knows they make enough money on search and that they just want to release good, useful, user-friendly products that are miles better than the competition, even if they aren't profitable.

*slaps your face*

SNAP OUT OF IT! Don't you understand!? They're here to kill us all! ALL OF US!

++Om

Funny thing

it took google's search engine 3-5 years to overcome inertia in a relatively new arena (web search). Now, it is competing against much longer established business (e-mail has been around for multiple decades). It will not be overnight that Google services will grow, but they will grow.

Re:Funny thing

And that's generally true of any product that attempts to enter an already established market. You make an initial splash but then it takes a while to build a base beyond the initial rush. Word of mouth eventually takes over and assuming a product is useful or even desireable, eventually its acceptance rate increases (look at Firefox's steady growth).

Re:Funny thing

The difference being that Firefox had to build a new brand. Yes, the internals are mozilla, but mozilla pretty much killed its name 5-8 years earlier. Firefox is working on creating a brand name in a very saturated market.

Nice thing for Google, is that although they are the new player on the block (vs. yahoo, aol, MS, etc), they have a superior reputation to all the other players. They just have to capitalize on that (i.e. no crap products that take their name down).

Re:Funny thing

Nice thing for Google, is that although they are the new player on the block (vs. yahoo, aol, MS, etc), they have a superior reputation to all the other players. They just have to capitalize on that (i.e. no crap products that take their name down).

The thing that bothers me about Google is: is it too much of a good thing? Put aside quality for a moment; is it possible Google's continuing expansion will spread it too thin? Mind you, Amazon has been expanding for what seems like eons now, but their main site is starting to get cluttered and I think they've been overstepping their reach with some of the areas they've gotten into (Groceries?). I'd be afraid of Google diluting itself too much in an attempt to become universally ubiquitous.

Re:Funny thing

I think that you've hit on something that makes Google unique, in that they are like a giant collection of startups. Google is organized into a variety of teams that operate in relative autonomy to the whole. They do stay in touch with the "mothership" and cooperate where it makes sense and will enhance their products, but most of their products are relatively standalone, or at least start that way. A lot of web companies (Yahoo) try to tightly integrate all their services from the get-go, if a service can't be made to drive more traffic to the rest of the portal, its a no-go. Google's products tend to start out as islands and gradually be drawn into the Google network (notice the increasing integration of Gmail with other services). I think the benefit here is then the links with the rest of the product portfolio grow organically where it makes sense rather than where people guess it will make sense or the marketing people think it'll work to drive cross traffic.

I also think that, while unstated, one of Google's philosophies with hiring is to just get a bunch of smart people together in a room, give them resources, and say, "Make whatever you want, because probably other people want it too." This requires one thing primarily, an ability to find just the right people who will use this environment and not exploit it. The key to continuing Google success is being able to find the right people.

Re:Funny thing

That will depend on management. They are hiring good geeks (actually great geeks) that are tech savy(able to invent and do things) rather than busines savy (read political a**kissers who learn how to take credit and spread the blame). The real question is, have they been hiring the right middle management. These are the guys who can break the company (even though they rarely make the company). Yahoo screwed up long ago, by hiring business ppl who let their tech edge go (hiring business savy geeks rather than tech savy). MS, same way (their monopoly kept them alive). Amazon is whole nother creature. I have not stayed up on them and I have no friends working there, so I really can not comment on them. But from where I sit, they seem to be doing ok. Of course, they probably should do some updating on their website and consider taking on e-bay. Perhaps work with google to accomplish such?

Hmmm... maybe?

Google search is the most popular on the Internet. As a matter of fact it has been forever enshrined in the dictionary as such. Google will continue to be profitable

I do disagree with TFA in that it treats other services as inconsequential. There is a reason that Yahoo! ranks #1 on lists of most popular websites. Although there are GMail and a customized homepage [google.com], Yahoo! still beats them on those fronts. The search market is pretty well defined. In order for Google to become an even bigger success it must become extremely successful in its side businesses. I refuse to accept TFA's arguement that it doesn't matter because they aren't spend that much money on it.

Re:Hmmm... maybe?

I think you're crazy if you think Yahoo! Mail is better than Gmail. I have two accounts for each. My first web-based email account was Yahoo!, so I've been with them for a very long time.

The reasons I like GMail so much better are:

1. I got on board early (admittedly not a design feature) so I got the names I wanted
2. Better GUI - simpler, more powerful
3. Integration with awesome products that involve sharing I love being able to share Google Calenders with my wife. We each have a personal calender and we share a calender for stuff we do together - and it all shows up (color-coded) on one display. It's brilliant. We use Google Spreadsheet for simple budget tracking as well.

Yahoo is #1 because of the head-start, that's it.

-stormin

Multiple Accounts are allowed.....

So you admit to breaking the agreement with Google?
You're only allowed one account.

Having just checked both the GMail Terms of Use [google.com] and the Program Policy [google.com], the only information I can find relating to multiple accounts is:
"Prohibited Actions: Create multiple user accounts in connection with any violation of the Agreement or create user accounts by automated means or under false or fraudulent pretenses...."
which is under the Program Policy.

Where are you getting your information regarding only one account being allowed?

Re:Hmmm... maybe?

So you admit to breaking the agreement with Google?

Yes, I did it, alright! I admit it! I did everything.

But why!? Why would you do that to Google, Stormin?

It was for the money. Money I needed. Money I could only get with 2 Gmail accounts.

Well do you think it was worth it now, Stormin? Now that we've got you red-handed? We're taking you downtown after this. It's the big house for you, Stormin. You threw your life away!

You don't know nothin copper! Was it worth it? Damn straight it was worth it! I did what I did to survive. Out on the street it's have 2 GMail accounts or die. I ain't sorry about what I done. I lived my life like a man, a man with with TWO GMAIL ACCOUNTS. Even if it's all over now, you can't take that away from me!

Sorry? The only thing I'm sorry about is getting caught. If only I'd kept my mouth shut on the stupid Slashdot forums, I'd have made it. I nearly did make it. You just got lucky, copper, and I didn't. You and I, we ain't so different.

Watch your mouth, Stormin, you want to run into an accident on the way to the station? Is that what you want?

We're through here. Just take me in already. Let's get this over with.

-stormin

Re:Hmmm... maybe?

Yahoo! couldn't be popular because it is the default homepage of millions of SBC/AT&T customers who don't know any better? Nah that's silly. Yahoo! has some nice services and some are indeed better than Google's offerings but for the most part people simply stick with their ISP's default homepage.

MalaMata.com to upgrade Google (Near Topic)

MalaMata.com [malamata.com] is a cool DHTML application that really upgrades the use of Google IMHO.

Googles real strategy

These analysts miss the point. The big win for Google is to replace Micro$oft as the default platform. As Google tools, google desktop and of course Google search as the homepage become the default start point for users, the operating system becomes less relevant.

Put another way, once people are Google-centric, they can use a Mac or a "GooglePC" or anything else. Linux anyone?

it does matter

when/if critical mass of semi-successful projects creates perception of google having lots its edge, the fickle internet population will turn away on a dime. happened to altavista, yahoo and no doubt can happen to google.

Dot-Com Mentality

If Google can't find secondary sources of income and continues to ride on excitement and enthusiasm they will fall prey to the dot-com business model. Eventually someone will build a better mouse-trap (search engine).

Time will tell

It took google's search engine a while to catch on and become the standard. Nearly everyone I know who uses a web based mail client has switched to gmail and google maps is the only place I go for directions.

It takes time for new software to catch on. In the meantime I think google is doing the right thing by putting a lot of new products out there. Maybe all of them won't catch on but it seems like the majority of them are building a following.

Google's “secondary” products

Don't exist, I think (at least, in many cases), to make money directly, at least in the short term; rather, they exist to reinforce the profitability of its primary products by increasing stickiness.

Bombshell

Google has an ace in the hole: the reverse of the Net Neutrality extortion scheme. First they get everybody to use all their free services, Google account, calendar, mail, search history, desktop search, etc. And then Google says to the big ISPs, hey, your customers want to jack in to our distributed computing network? Better pay up! $x.xx per user per month. Guaranteed revenue from the big telcos/cable companies, the ISPs have to run the billing and collection operations while Google just rakes in the bucks.

...but that would be sort of evil.

Money, bah!

That's right: Bah! Following the example of my heroes W Buffett and W Gates III, I hereby announce that I'm giving all my savings to the Bill And Melinda Gates Foundation. I don't want any dynasty founded on my $763.84.

Google is building highly usable applications that are not OS-dependent. THAT is what is scaring the traditional software makers. The browser is the interpreter. Firefox is Google's wedge and everything they do is helping to change the way people use computers.

Secondary Products?

What did you expect? Google started off on searching for things, and they have found ways to incorporate it into their other products. It would seem that Google's main offering is "searching for information". Their secondary products enhance or focus different areas of search. For example, Froogle, or Google Maps. Then you have Ad Sense that provides based on what you're searching for.

Google hasn't made any statements about major secondary products. It doesn't look like they are trying to. They are providing tools that people find useful. The ultimate judge is the consumer, and so far, it looks like Google must be doing something right, because the consumers like most of what they are offering.

To say that Google will remain successful even if it comes up with "useless" products, is not true. Competition will ensure that they think of something new. Sure they have little knicknacks here and there (Google Labs?) but they're not MEANT to be big products.

If Google comes up with another major product, I'm pretty sure we'll know. They have the resources and talent for it.

Huh. Shameless self-promotion?

I always wondered whether Google ever considered just throwing a link on their homepage occasionally, when they really want people to read something. I mean, sure, it would be immeasurably worse than a Slashdotting, but even something like the Net Neutrality stuff.

I doubt they would actually do it, though. A large advantage Google has over the competition is that they are at least perceived as a commons -- anyone can buy Google adspace, and it has nothing to do with their relationship with Google and everything to do with statistical analysis -- PageRank.

Goodwill.

A good business is beyond just direct and immediate cashflow/revenues of one/a particular products.

A good business builds goodwill The extra services by google builds goodwill.

Sure right now its mostly appeals to advanced/experienced net users.. but advanced/experienced net users we're also the first movers/adopters of Google(search)

Yet they've caused innovation

Google might not be making large sums of money off of their other products that have been created but it's hard to deny that they haven't caused a major change in how other online companies do their business.

After using Hotmail for all those years and then switching over to GMail as my primary e-mail I was stunned by how many things Gmail did that made it easier to work with. Now my junk e-mail account was still at Hotmail and when they asked me to be part of the beta testing for Windows Live Mail I figured it's only the junk e-mail account so I gave it a shot.

Windows Live Mail seems like someone tried to take Outlook and GMail and just mash the two of them together. However, Microsoft has still dropped the ball in making it easy to work with. For anyone who is part of the beta just try and delete multiple mails at the same time. Due to my long time of using computers I have no problem but most regular users are going to have trouble.

Even before Microsoft went for the complete overhaul they upped their maximum storage capacity in order to compete with GMail. So while it may not be a giant winner for Google money-wise, they've been a great boon to the end users who have finally started to see things get shaken up

Just like the article mentions I'll leave this innovative and beautiful Google web program with just a name, as if you've used it it's not likely you've forgotten it: Google Maps.

FUTURE

Everything Google launches is to build their ability to advertise in the future. IE their music tracking thing that launched today (or yesterday). Google pages, it is easy to have the content then find and search, plus putting ads in is easier when you control the template. I conjecture that they are using these services to track trends and usage to use with their advertising. If they can give you a accurate profile of people who search for "lop eared rabbit" (they tend to listen to jazz, write blogs about their kids, send emails to family and friends, they have only a few documents on their computers, etc...) then the advertising can be more complex than key words. The current state of advertising is poor, last time I Googled office supplies I needed the name of the office supply store down the road, I wasn't looking for ads. Generally I know what I am looking for Google is the Easy way to find it. I'm looking for Office Max I'm not concerned about an Office Depot. But if Google knew there was a White Castle between me and Office max and that I also listened to Hard Rock and that Hard Rock fans like White Castle they can show me that ad instead of a Staples ad. They are attempting to build advertising profiles and they use new stuff to build profiles and watch data spread. They are as much sociologists as they are programmers.

critical mass, similar to M$ approach

Actually, their approach isnt that much different from Microsoft's, at least from an abstract view. They are slowly accumulating more and more useful products, and over time this will bring them to a critical mass. Once they surpass this, then more and more of their "other tools" will be the tools of choice in their specific areas, and then Google will be a monster in the marketplace. The trick will be to not then turn around and be "evil" (i.e. charge for services that were once free because you can, etc).

While supplies last

Simple.

The more people that Google attracts to it's secondary features, the more customers it'll have using the main features. It's a special deal mail in rebate buy one get one free to the first 20 customers. Or, like keeping your doors open during the summer and letting the air conditioning blow out onto the hot streets. Anything to entice customers in.

Long tail theory strikes again.

Is this another (bad) example of the Long-tail theory?

These things Take Time

With so many things on the internet now a days thatare come and go, there are a lot of people that are skepticle about switching to a new company that might og under. Not even a new company sometimes, but a new product by the same old company. Much as the way that people have stayed with their PC's running windoze for years and years now, many people have stayed with Yahoo! becuase it's the e-mail that they had when they got thier first computer. Many people stay with AOL becuase it's all over the place. The new services that Google is offering will never take hold in a day or two, but instead will take time, and because they took the time to get noticed and grow in the public support they will stand the test of time. Not only that, but all of the product that Google offers are at least as good as thier competitors services. So once people get thier first look at the things that Google has to offer (whcih may take time) they will see no need to switch back to their old company. And one other thing that all of these other services afford to Google that no one really seems to consider is the possible inflow of information. Google knows everyone on the web, or at least could know everything. They can sum up the thoughts of the world (accoring to those that traffic google search at least) they can examine thoughts and questions. Above all this, put analyzing informatuon, they can know what people are looking for on the internet. Every time they add a new product they are generating a new way to take in information about the world. That's more valuable in the long run than money because you can have money, but without knowing how to spend it, you are going to fail.

GMAIL doesnt cost a lot? Explain that one!

2 gig + for how many users? Ho can they afford to keep that up without being profitable?

Profit is not expected yet FOR a reason!

Of course none of their other software is creating a profit...how often does anyone's BETA software turn a profit?! ;-)

Google is not a business

Google is a window into you, your business and your Life. Google the franchise is 'the window' (search, gmail, eblogger, etc...) building it, extending it and having your information pay for it is the revenue model.

The very first day Google moved its servers out of .edu environment no business case existed to cover its costs. Google is information driven. Corporations and gov't pay to sniff your window. You will not pay Google for information. Hence the GoogleOS.

PBS is likely a portion of the hybrid model Google will evolve toward for user generated revenue streams. PBS, a gov't funded enterprise, is off the gov't dole, living comfortably upon donations from various interests. GoogleOS the 'service' ala .mac is what you'll pay for access to run the GoogleOS.app which will likely be free as gmail, eblogger, etc... are free to download.

For 2012

Google OS for 2012.

Um. Yes they do need to succeed.

Whoever wrote this silly blogpost clearly hasn't considered the real reason Google needs their products to succeed. Google's bread and butter is their search product. But here's the problem: search growth is slowing. The only way for Google to keep growing their business at the breakneck speed that they and Wall St have become accustomed to is to find new places besides search pages that they can stick their ads on. Right now Google gets to do that using their Adsense program. Thousands of websites around the world are making Google tons of money. But the margins there will keep slipping as more competitors (Yahoo, MSN etc) come on in and offer to share higher percentages of their revenue with 3rd party publishers. This leaves Google with having to own their own "content" pages where they can stick their ads and book 100% of revenues from them. Unless their other products succeed, Google will truly become a one trick pony as far as their revenues are concerned. No responsible business can afford to become a one trick pony. That way lies death.

Only true Google product failure

In my mind is Google Calendar. Most people I know use Google for search, just about everyone has migrated to a Gmail account, my GF and I use gSpread for tracking our expenses, wrote invitations to a party on Writely, I use the Google homepage, etc... BUT to launch Google calendar without any tools to sync to other applications, tools, PDAs, etc and then to dump a half-baked API on the development community and let them struggle to figure it out on their own was really sub-par. Although all their products are "beta" this is, by far, the most beta of any product that they have released. Generally, they are handing Yahoo's ass to them. I have touched a Yahoo product since I switched from Yahoo! DSL almost a year ago. Google doesn't have to hit every ball out of the park, but a couple of strikeouts like gCalendar could lose them alot of goodwill and leave openings for competitors.

This is shortsighted....

Why do you think Google's on top of the search engine world? They're cutting edge and they have a simple interface. While it may not matter that the next thing Google rolls out is successful, it certainly matters that they keep rolling out interesting products and come up with a killer ap, such as gmail, every once in a while. Otherwise, there's nothing to keep the publics interest and curiousity with Google. Who's to say that Yahoo won't give themselves a face lift and change their attitude or that some other young upstart won't topple Google by offering something new and interesting? All it takes is something compelling enough to draw the publics interest, even if what pulls their interest isn't the main product.

The Big Picture?

Can people not see whats happening? Google releases all these really cool products that eventually become apart of your daily life.

Before the only google app I couldnt live without was Google search
then Gmail (with Google Chat + Google Talk)
then Google News
then Google Local/Maps
now because of the integration of GMail Im even started to use Google Calendar because it is so convenient to use, I received a confirmation email about tickets I bought online, right beside my email there was a link to add the event to my calendar, within 2 weeks I had it booked - awesome!

I use all their services daily for free, what google gets in return is to host all your personal info so they can target you with ads. After using googles services for so many years my online profile must read like a diary, as it has everything I ever searched for (what im interested in), almost every place I have ever been (searches from Google Maps/Local) as well as most of my friends/contacts (emails and contacts) and their profiles, etc. I reckon Google knows more about me than I do (people forget things :))

Now the most important and valuable thing in IT is data and because of these added 'Google Services' they have a lot of it on a lot of people. Now since everything is tied to my gmail account (aka Google Account) it is likely that I will be using Google's services for the rest of my life. Where as if they just had a search then as soon as someone developed a better search I would've just easily switched.

Insanely useful, simple, and unobtrusive

Every single one of google's products incorporate google text ads. They are unobtrusive and relevent. Next time you're using gmail, and you're looking at an invoice for say, a hard drive you purchased. On the side bar, it will have text ads for hard drives, not only that, but if there is a tracking number in the email, gmail will offer a link to track the shipment. If there is an address in the email, gmail will offer to map it for you. Insanely useful, simple, and unobtrusive. This is why google is so successful.

Bullsh!!t

Well, being the evil company they are now, my first natural reaction is bullsh!t. So let's explore that a little further to see if that's a good reaction.

Google burst into the search scene with a no nonsense, pure search engine, and advertised it as a reaction against bloated portals. They concentrated on what mattered, search!, instead of bloat. Then they wanted to become really rich, and everything went wrong: Google become an ad-broker, and went public. The game here is that each year you have to have more profit and even a larger percentage of profit, or the stock will go down, and this is done by selling more ads, thus you need more page views, thus you need more services.

So now, because of the two guys' quest for monetary tokens, we have arrived at the opposite of Google's original self-aclaimed goal and purpose. Ok, but as anyone with a little sense knows, despite some blinded nerds and fanboys on Slashdot, all the extra services are kind of failures, as compared to search. Even something as cool as Google Maps, many have been fooled by the appeal the atlas had on them like a child.. a nice toy for a while but you're hardly searching the map everyday are you? Many of the services are kind of average. The problem arises because of two things: they lost their original focus and focus now on no particular thing; their interface model doesn't stand. The last one is like the story of the emperor without clothes. Google's interface is bad, for non-search services. Really, you can't expect to have a really basic search engine interface, and then transfer that to all those complex services. Gmail, I tell you, is a usability nightmare. If only they would have made it look like a real app/interface. All this interface knowledge about how to capture usablity complexity best is thrown away and had to make place for confusing "minimalistic" web page look, which isn't minimal anymore because of the complexity and runs out of steam as a concept.

Anyway, I'm sure many of you can have wonderful arguments against that, but in the end I and many others, especially the non-nerd population, find ourselves only or mainly using search, and the difference now is they don't focus anymore.

Now comes this press release. The prime and sole target seems to be stock holders. It's an admission of failure really, their "launch many services to get much more page views" strategy failed, and now they need to spin it. This message is targetted at spinning that failure for stock holders.

Also, to claim the cost and risc is minimal is arrogant and dangerous. Stock holders read that as: Google has an enormous amount of overhead, lowering the barrier of competing/market entrance, and making space for another company to do the same, better and cheaper. It's not like it hasn't been done before... (Admittedly Google's is trying its best to higher the barrier of entrance in all other ways.)

Baidu for instance doesn't buy token Internet pioneers or gives their employees bloated salaries to spend 20% on toy projects. Yahoo! Search is still inferior but their harvesting is already superior and their sandbox alltheweb.com looks promosing on the logic side. MS has proven many times you should never judge them on a version 1 or 2, just get more scared if the versions keep coming.

Google shouldn't do bullsh!t or damage control or hire expensive spin doctors or try to get Google to Mars. For me as a user, they should concentrate on search. As a stock holder I have conflicting wishes, they should do better on search and much better on other services, and their sole income, out of ads, scares the hell out of me with all the click fraud and spammers turning their attention on Google with link farms and zombie click farms. As a stockholder, their diversity strategy is failing, and the message they give me is: lalalala I can't hear you oh no it was supposed to be this way etc. etc. This will not do. Stock holders want to hear how they stop being boys and start earning them more money.

Net Bloat

I don't see analysts criticizing Microsoft just because most individual features (by menu item) in, say, MS Office, aren't popular or "successful". It's the bundle that gives the total value in the brand, which then funnels money through even just the most successful features. Google's features and rollouts don't even cost much or commit people to much ownership or even brand association. It just makes Google more than searching, so is a more persistent feature of the landscape.

Google owns the "Web" app brand as much as Microsoft owns the "Windows" brand. Whatever they do to appear big enough to deserve that ownership is worth doing.

Google's services are great but ...

Can someone please allay my privacy fears with having my calendar info, personal and business email, financial data on a Google spreadsheet all hosted on a U.S. based server? The fact that so much of my personal data would be hosted on a server makes me nervous enough not to use it but being hosted on a U.S. based server makes me all the more nervous considering the lack of respect for personal privacy by U.S. authorities.

Not every system is an over night hit. News=Wrong

They meantion three systems, Google IM, Google Checkout, and Google Spreadsheets.

First off Who said Google IM was going to take down Yahoo And AIM? The news papers.

Google Checkout? Who said it would take down Ebay? The news.

Who said Google Spreadsheets will take down Excel? The news.

What are all three actually? An option. So why haven't all three taken over the world? People have yet to try the option.

Personally I jumped on Google maps, and Gmail early and often. At the same time though if you always used mapquest (which I loath) you're probably not going to try Google maps. Personally before Google Maps I was using yahoo maps which was about the same thing except worse in most ways. So I tried Google maps once it offered satilite feeds and found just for regular mapage It killed Yahoo, at the same time the satalite picture were great add ons.

The thing is the three that they are offering now arn't even a year old and people are acting like they are a failure?

I don't believe Ebay interfaces with Google Checkout just quite yet, so why should people use Google Checkout over Paypal (assuming price is the same). Why should I go to an online system of spreadsheets over excel (there's reasons here, but people arn't seeing them just quite yet)? (Well honestly I don't use spreadsheets actually)

Google IM though is going to be the hardest sell... unless Google offers a version that will also send AIMs and YIMs. When trillian adopts it I'll use it myself.

The thing is people have to start adopting Google checkout and spreadsheets before it becomes a hit. How long was google out before Excite, Lycos, and Yahoo were "beaten"? Hint. It wasn't overnight or three days, or probably even three years.

A deep misunderstanding,

From TFA summary:

BusinessWeek has just such an article ("So much fanfare, so few hits") but others argue that success relative to the size of Google's bread-and-butter (search) ultimately doesn't matter because it doesn't cost Google much extra to keep these secondary services -- like Gmail -- operational:

This shows about as deep a misunderstanding of Google as it's possible to have. (The article itself also shows signs of the same fallacy.)
 
Google is an advertising company - period. Each and every service they provide on the web exists for one purpose: to get eyeballs on the ads. The fact that they are dominant in search, and that search is their largest revenue generator, doesn't change this.

have they lost over $8 billion on ONE project?

It's doubtful but yet did the article mention how Microsoft has lost over $8 billion on WindowsCE/PocketPC/newNameHere? Add to that the billions lost so far on Xbox, MS Bob, MSN.com, MSNBC.com, MS TabletPC, etc and you realize the story should be about Microsoft and how they've not made any money off anything but the MS Windows OS and MS Office on the PC.

TFA wouldn't load( /.'ed? ) but I'll try again to see what the heck they are talking about. IMO, Google seems to be bringing in the bucks pretty consistantly and their new features are keeping many looking/staying with them. Google maps seems to be used quite commonly in the TV news business and I doubt THAT is free or not a profit base. IMO

LoB

It's called R&D, folks

People will rail against the "spreading thin" of Google as they offer a wider variety of services. Dozens of failed or mediocre offerings, oh my. If we look at certain other fields where the drive is to innovate and create a new and powerful product we find similar, if not significantly worse, failure rates. The medical and pharmaceutical industries are full of failures and high R&D costs. However, when they get their one single success it provides a level of value that will support them to their next great hit.

Google is doing the right thing in two ways here - they are allowing their developers to think and work on their own pet projects, which will ensure retention of some of the best and brightest, and they are understanding that for every brilliant idea there will be a string of failures. If they spend one billion on R&D (made that number up for the sake of argument), drop 999 products that aren't winners and get one single product that becomes a 6-billion-a-year success, they will have done the best thing for their investors, for their developers, and for their own continued growth.

Why Gmail hasn't caught on yet

It's pretty easy for me to see why G-Mail hasn't caught on yet. You have to be invited. I can go to yahoo or hotmail and easily sign up for an account(or 17). I actually have 1 of each from the past probably(great for those sites requiring an e-mail address and spam).

With Gmail someone has to invite you since it is still beta. So even if you want an account it is hard to get one without knowing someone. Once the beta is over and it's easy to sign up I suspect it will become more popular much faster.

That said I have about 100 Gmail invites anyone need one....

it doesn't $ =G= much extra to keep these services

really? it takes time to develope these. time that could be used for more profitable opportunities.

it took many years to launch new beta blogger. even google stumbles on its own weight.

The Three Reasons Success Doesn't Matter

1) New services are cheap for Google (the reason given in this article).
2) New services get publicity, serving as advertisement for Google as a brand.
3) New services might become hits, so why not launch and see?

Combined, the result is that Google is spending little money (#1) doing something that needs to be done anyway (#2) and which might make big returns (#3). You think McDonalds or Wal-Mart wouldn't jump at the chance to get their advertising dollars to double as pseudo-venture capital?

Failures vs Successes

The critical factor in bringing new products to market, is to not introduce failures. So although google has not introduced any new products as successful as their search technology, they have also not introduced any failures, like their supposed main search competitor, microsoft.

It all depends on what they can introduce in the next few years to keep ahead of the market. Just like apple introduced the right piece of hardware, at the right time, in the right way, the ipod. Critical for google to make it's transition from a search engine company to an information portal and a technology company is ensuring in can adapt to the new search paradigm to maintain it's strength while adding new diverse products.

The are of course the other markets currently dominated by a single company Blizzard for MMORPG, EBAY for online auctions. Markets dominated by a single company are always ripe for picking, sometimes they can be difficult but the rewards are there.

Re:So wait.

When Google starts charging for all this free crap, and trust me they will,

Sorry, I'd rather trust Google's established business model of targetted ads than some dvorak like tro^h^h^hpundit on /.

Re:So wait.

They won't charge. They don't need to. You use it, they get to show you ads (their main revenue stream) AND use your data later with advanced data mining techniques so they can sell aggregate data on users. The more users the better.

Re:So wait.

Why would they? They're already making tonnes off their ads. They'd probably make less money if they started asking for a fee.

Re:Cult of the Google

Honestly, how many Yahoo nerds are there out there?

Probably quite a few (though less, perhaps, than Google has), for largely the same kind of reasons. Yahoo! has lots of toys, too (Yahoo! Widget Engine, for one.)