There has been a torrent of bad news streaming from Alphabet in the past few weeks, making it clear that the company that has always looked like many different companies under one umbrella is finally making an attempt to get its house in order.
It is not that many things were wrong under Alphabet, Google’s parent company. But the number of failed projects is now so numerous that after all the effort, Google is still a search engine and ad network operator, nothing more.
That’s not entirely true, though. They do have Chrome and Android, two of their most successful products that Google launched on their own. On the acquisition side they have YouTube, but despite its success and popularity it has hardly made any movement except for organic growth over the years. YouTube Red is still a baby so we can’t even count that as a genuine success just yet.
Now, before you start jumping up and down citing Google Apps and Gmail and all of that, remember that we’re talking about a company that is probably home to the best tech minds in the world, and with money to burn being the icing on the cake. Do you really expect investors to believe that with all that cash and brains Google couldn’t get a single moonshot project off the ground, let alone go for the moon?
Unfortunately, that seems to be the case. Alphabet has struggled to create a commercial product that can run with the ball, and for some reason the company has steered clear of big ticket acquisitions so far.
But look at what its peers are doing. Facebook wouldn’t be where it is today without Instagram, and WhatsApp is going to take it even further. Microsoft made a clear statement with the $26 billion LinkedIn acquisition that it will dominate the enterprise segment with its as-a-Service offerings. IBM has literally been walking the streets looking for billion-dollar acquisitions that have taken it much closer to its goals in analytics and cloud, among other things.
And that’s not the worst of it. Alphabet sat quietly and watched the cloud industry slip through its fingers even though they were probably the biggest consumer of cloud from way back in the mid to late 00s. The introduction of Diane Greene into the cloud picture is possibly the only major step they’ve taken after launching the Google Cloud Platform. This was around the same time when Microsoft was literally killing them in cloud infrastructure and pushing Google Apps into fourth place with astounding Office 365 growth.
At the heart of Alphabet’s problem is what we tell our kids all the time: don’t try and get good at too many things at the same time. Instead, focus on one area and try to become the best you can at that. The list of Google’s “been there done that” projects is alarmingly long. They tried to gain a foothold in social media with Google+ and look where that is now. And what about putting smartphone functionality on a pair of spectacles? Even the more recent ones like Google Fiber are fizzling out after the parent company took a hard stand. AT&T is now taunting Alphabet for even thinking about stepping into its turf. And just today the New York Times reported that the company is calling off its Project Ara, its attempt to build a modular smartphone.
Just like a college kid who doesn’t know what she wants to major in, Google continues to struggle with project after project, not really knowing what direction it wants to take for the future. I have tremendous expectations from the DeepMind artificial intelligence project, but with Google handling it there’s no guarantee that it won’t flop like so many of its dead siblings.
Let me give you a ridiculous analogy here. What if you were a large pharma company and you told your senior scientists that you wanted them to develop “a really cool new drug”? Where do you think they’d end up with directions like that? On the other hand, if you told them that you wanted to launch the cheapest chemo drug for a specific type of colorectal cancer, they’d have a much better chance at success.
Google’s situation is like that first scenario. They know they want something awe-inspiring but they don’t know what it is yet. And I don’t see any other tech company gambling on their future that way. Did Facebook go out and build a mobile operating system or buy an autonomous driving technology company? No, they bought companies that would extend their reach and depth within social media, and then they took a low-risk route by investing wisely in the leading virtual reality company – which is actually synchronous with their push on the video front, by the way. Did IBM suddenly go and buy a space exploration company? No, they bought medical imaging technology companies to extend their IBM Watson Health agenda and their initiatives in cloud and cyber security.
Even now Google is working on a self-driving car project, but Uber came and took the lead from right under their nose. Did you know Uber already has a fleet of self-driving Volvo XC 90s in the city of Pittsburgh that was launched late last month? Sure, it comes with a driver and an off-site operator to make sure it’s safe for the passenger but at least they’re moving into the market with whatever they have.
So at the end of the day, while I have tremendous respect for the business Google has built around its search engine, around the Android operating system and around Chrome and even Google Apps for that matter, I completely fail to see the purpose behind repeatedly getting into unfamiliar areas instead of doubling down on what they do have.
They’ve got DeepMind that’s still busy building apps to beat humans at their own game, while IBM did that years ago and has moved far ahead since then with Watson. They’ve got the biggest audience in the world for free video streaming but other than eking out a few billion dollars a year from advertising, they’ve done little else before they launched YouTube Red. And they’ve got Chromebooks, which recently topped Apple Mac sales in the U.S. with 2 million units sold against Apple’s 1.76 million.
These are the businesses that Alphabet needs to double down on while autonomizing the other business units, and I celebrate the fact that the company is finally doing exactly that. They’re also allowing Sundar Pichai, the man who put Chrome, Drive and even Android on the map, to run the core businesses while co-founder Larry Page oversees all the forward-looking businesses including Google X, Nest and Life Sciences.
I think Alphabet is finally coming into its own, and the next few years will be an exciting time for “the little search engine company that could.” I have a strong feeling we’ll be seeing some serious movement from Alphabet over the next decade. Don’t fault me for being an optimist.
Thanks for reading our work! If you’re reading this on Apple News, please favorite the 1RedDrop channel (next to our logo) to add us to your news feed, or Like our page on Facebook. Please bookmark our site for more insightful articles on current and future technologies that are changing our lives.
