Just when you thought the giant can’t get any bigger, catastrophe strikes Google Inc at the worst possible time. Being as successful as Google does raise an eyebrow. In ancient computing times, Microsoft was the big bad evil empire that the then incepted Google and Apple wanted to overtake. Hence Apple always backed Google. Steve Jobs took it as his responsibility to mentor Google co-founders Larry Page and Sergey Brin. There were also times when Google CEO Eric Schmidt was welcome in Apple’s board.
A decade has passed by since and the tables have turned against today’s most common enemy- Google. Competition from it’s homeland is fierce with Facebook, Amazon, Microsoft and Apple all teaming up with each other through implicit partnerships. Times where it monopolized the internet space is no longer the reality for Google. The Company has many issues to address besides keeping an unwary eye on it’s rival tie ups.
Google’s Many Speed Breakers
1.) The major concern Google has to address is “the transition from desktop to mobile search, continued margin compression, and increasing competition from Facebook”.
The camaraderie between Facebook, Apple and Microsoft is the biggest cause of concern for Google. Microsoft invested $240 million in FB way back in 2007. Apple’s iOS is a steady platform for garnering FB as FB generates quite a lot of revenue.
2.) Apple’s Siri is powered by Microsoft. Day by day, Microsoft seems to be updating it’s resources to answer the next gen’s queries and is way ahead of Google with it’s speed of innovation to power Siri. Facebook bought Atlas, the ad-serving platform for peanuts from Microsoft. With Apple deeply integrating iOS for FB compatibility, Atlas has been putting up immense competition to Adsense.
3.) With the rise in mobile browsing, Google’s search advertising revenue has hit rock bottom with most mobile users not using web as much as they used to, on their desktops. The last few quarters saw Google search advertising business grow at a snail’s pace, which is the lowest in 6 years.
4.) When it comes to rivals, Eric Schmidt confessed in a conference in Berlin, “Many people think our main competition is Bing or Yahoo. But, really, our biggest search competitor is Amazon. People don’t think of Amazon as search, but if you are looking for something to buy, you are more often than not looking for it on Amazon.”
Google is hit badly here because when people want to buy something on the internet, Google displays the ads for them, that in turn has been a major source of revenue to Google. However now, people are directly going to Amazon to buy products.
5.) Another bummer is that this income generating department of Google was headed by Nikesh Arora, who has now quit Google for a CEO position at Softbank Internet and Media. Arora was the highest paid executive with $51.1 million. Omid Kordestani has now replaced him. This is a setback because, Arora having lead Google’s advertising search and had been managing the customer revenue and marketing for 10 years now. Looks like Schmidt is disguising his disappointment with the hope that Omid will outperform Arora.
6.) In a sudden unexpected turn of events. Schmidt appointed Sunder Pichai to take over the day to day operations at Google. Many sources say that the innovation pace of Google is suffering due to which the appointment of Pichai happened in a hush hush manner.
7.) Also with EU vowing to break up Google as it is privy to a humongous database, is surely taking a toll on it’s revenue in the Europe. Google is battling for it’s survival in Russia, Italy, Brazil and Spain. Most of Europe are turning to Mozilla for search engine and the EU views Google as a parasitic American company that is creating many barriers for small competitors to co-exist and want to curb it’s operations.
8.) It seems like Facebook will never rest till it is a step ahead of Google. Facebook is in process of bringing in YouTube like videos, known that the FB base is ever expanding. It is also working on video ads. This is a battle, many feel FB might win. An expert says, “Facebook appears better positioned to capture new dollars coming online given its 21% share of mobile time spent, strong leverage to news feed ads, and nascent opportunities in video and Instagram.”
9.) Apple had signed a contract, with Google for providing a search engine on it’s safari browser expires this 2015. Also Apple is rumored to be building it’s own search engine but however this June, Apple changed it’s default search engine on the iPhone and iMac to Bing. The fight now is between Yahoo and Bing to get a piece of the cake.
10.) Also Google has been the last of the tech lot to buy mobile patents from Nortel, and forced itself to buy Motorola at $12 billion and sold the same at $2.9 billion. Google has been having problems in finding good mobile app partners.
Amidst all the spheres of pessimism, Eric still wears a smile. A former Google says, “Mobile has been eating away [at them] for years, but they’ve been able to pull rabbits out of the hat to increase revenue. I think 2015 is going to be disastrous.”
However we hope our accustomed giant gets out of all this mess without messing with it’s brand image!
Do let us know what you think in comments below!
[Via: Business Insider]