A piece exploring some of the hazards ahead for Google, first published on First Drafts, September 2009
There’s an article in the latest Atlantic that asks an interesting question, but offers no answers. “What Scares Google,” by Kevin Maney, notes that big companies have historically failed to adapt their highly profitable strategies to the next generation of technology—IBM’s dominance was scuppered by home computing, Microsoft’s by the internet—and draws the lesson that even Google is likely to struggle to transform itself come the next great shift. But what will that shift be, and who stands to gain from it if not Google? Futurology has long been a mug’s game, and Maney wisely remains silent: he simply wraps up with the pronouncement that you should “Fear what you can’t see, not what you can.” Fair enough. But looking out for things that you can’t see isn’t half as entertaining as free-wheeling speculation. So here are a few thoughts.
First, given that the mobile internet represents a large slice of global technology growth, Google ought to be scared that Apple’s “closed” iPhone system has thus far trumped any rival based on Google’s open “open” Android platform, and that the App store is raking in millions of dollars a day for Apple. This is looking increasingly like a new model for online access that lavishes most of its profits on application and service providers, rather than on benefiting advertising providers. And, as far as money is concerned, Google is an advertising provider.
iPhones aside, the screens of mobile devices in general aren’t too friendly to Google-style ads; and nor are the “alternative” internet browsing options increasingly being offered by devices like games consoles and TV boxes. In fact, a future in which almost every domestic gadget is hooked up to the internet is not a hospitable one for a company that relies on serving ads next to search results. There are lots of opportunities for micro-payments and subscriptions in a world where every device is hooked up to its own walled garden of online resources, but far fewer profits for old-fashioned click-throughs.
Second, Google sells its ads off the back of being the world’s best search engine. Anything that defeats or undermines its search philosophy undermines Google at its core—and although it expends incredible effort on ensuring this won’t happen, there are pitfalls. Take Twitter, a service that offers a snapshot of what people are thinking about any particular event at any particular moment in time. Twitter has grown into a major, searchable international service that makes Google look slow and stumbling by comparison, something that has never happened on this scale before. You can’t effectively search Google to find out what’s happening on Twitter.
Nor, to a lesser extent, can Google usefully penetrate the constant updates and messages that constitute social networking sites and online communities. In a world of wireless internet access via telephone networks, with iPhone-like devices in every pocket keeping everyone online every minute of the day, this kind of constant data streaming will increasingly become the way that many people use the internet. And, despite the success of its news service, Google doesn’t do this kind of socially-networked streaming on anything like the scale or with anything like the dominance it enjoys with search.
What else? As I discussed in the pages of Prospect a few months ago, it’s noteworthy that Google has failed to dominate the Chinese internet—the world’s largest online community by some margin—as it has the west. Among other things, Google’s liberal style has proved less popular with the Chinese authorities than a home-grown company’s willingness to cooperate on censorship and official policy. And with more and more countries ruled by censorious regimes beginning to have a real presence online, especially in Africa and the Middle East, Google’s admirable corporate philosophy is unlikely to find universal favour.
Then there’s malevolence. Google is both huge and popular, to its great credit. Can this continue? History suggests it may not. Governments already fear Google, or at least what it represents: Google is a huge target, and likely to be hit especially hard by any future legislation seeking to regulate the internet (and it’s hard to believe that laws regulating everything from virtual property rights to ownership of data, some of them bad, will not be passed in bulk in the future). It’s also in the nature of most very large companies that they wane in their users’ affections over time: something Google works very hard against, but that the increasing trickle of “Is Google evil?” headlines suggests may be beginning, at least in the media.
Then, finally, there’s Google itself. And this at least is certain: leaving aside the fearfulness of what you can’t see, it’s always possible for anyone, no matter how successful, to destroy themselves in a fraction of the time it took them to achieve success. Just ask the bankers.