The business world is getting more competitive by the year. If you don’t believe me, take a look at some of these examples.
In the automotive world, Tesla stands out as a frontrunner in eco-friendly vehicles. They’re now so successful that they pushed General Motors into developing a budget-friendly version of the electric car – the Bolt – in order to compete with Tesla’s hugely popular Model S.
Even within the internal combustion engine fraternity, GM and Ford are constantly trying to outdo each other with features, offers, rebates, service guarantees and so on.
In the world of technology, this competitiveness is even more pronounced.
Google, so far, has been focusing on storing the world’s information and making it universally accessible and useful. They’ve succeeded at that, but it doesn’t seem to be enough. Investors are clamoring for more, even as Netflix and Amazon Prime Video threaten to take the premium video streaming market by the horns. Google was forced to respond with YouTube Red, and now they’re committed to that segment.
Even in the mobile advertising space, Google now has to fight for market share with the likes of Facebook.
In turn, Facebook and Apple have now entered Google’s domain of content with their Facebook Instant Articles and Apple News services that are designed to keep their users from going outside their apps to get the latest news.
On the office productivity front, Microsoft is threatening to run away with massive market share over Google for Apps, which means Google has to push harder on the cloud front – a related industry segment.
Confused? Good! But wait, there’s more.
Now that Microsoft has announced its acquisition of LinkedIn, Google is really in a tight spot. They have to respond, and Twitter seems to be the only solid answer to this particular problem.
Just in case you’re wondering, this article is about Google. The search engine giant is getting beat up on multiple fronts by companies that it never dreamed it would ever compete with.
But that’s the hard truth Google has to face – or die. What…Google die? Impossible! Preposterous! I know that’s what you’re thinking, but think about this…
When Google (actually, the parent company, Alphabet Inc.) announced a 17% revenue increase this past quarter, they lost tens of billions in market share from a 5% dip in stock price.
What does that show? It shows that the market is expecting big things from Google – and isn’t getting it. I won’t get into the financials, but suffice it to say that the analysts’ consensus on how much Google would earn that quarter did not match reality. They missed earnings per share by 46 cents and revenues by a mere $120 million. But the impact on the stock was disproportionate.
As such, Google knows that it is running out of options. It cannot sit on its search advertising business forever, and it’s well aware of the consequences if it does.
Therefore, acquiring a company like Twitter is about the best thing they can do at this point. Not only will it give them direct access to 400 million users; more importantly, it will enable them to integrate social media into many of their offerings.
According to Vanity Fair, Larry Page reportedly made an attempt to buy Twitter when he invited CEO Jack Dorsey to Google headquarters back in 2011. We don’t know if that’s even true, but if it is, then I think it’s time that Page picked up the phone and dialled Dorsey’s number once again.