Valley Bigwig Says Google is a "Total F--ing Train Wreck" True?
Yahoo's exec turmoil, Mr. Big tells us, is only slightly worse than that of its peers. And here Mr. Big rattles off a list of big tech companies he says are plagued with management strife: Microsoft (MSFT), eBay (EBAY), Google (GOOG)...
Wait a minute. Google? Yes, Google, says Mr. Big -- you just don't see it yet, because AdWords' success masks all problems:
"Google's a complete f--ing mess on the inside. A total f--ing trainwreck. They don't talk to each other. They fight constantly. A lot is being pissed away. In three or four years you'll be looking back at this company and wondering what happened."
First time we've heard that assessment from a Valley insider. Is it fair?
See Also: Yahoo: We're Not Shutting Down!
There's 18,000 people working there. Probably 16,000 of them had nothing to do with the success of GOOG. It's likely that somewhere around 8-9,000 of them are going to start vesting underwater over the next 6 months.
If there's a downturn in ads GOOG will crash the way YHOO did in 2000
Specifically, will some other product start growing fast enough to offset some of the slowdown of the main engine. My money's on display ads as the leading candidate, but to make those really count, they'll have to start plastering them on Google.com.
http://www.nytimes.com/2008/06/24/technology/24google.html?pagewanted=all
We've been asking that of GOOG for years. Are any properties accretive besides search?
The Y! product portfolio and revenue in 1999 was far more diverse than GOOG's current position.
That said, chaotic f--king train wreck now does not mean they will fail now, growing cash flow this quarter guarantee nothing 3-5 years down the road. those internal infighting happens at any place populated by smart and ambitious people(the same bunch that flooded yhoo and aol in their days), which in and of itself may not be a positive or negative.
Ten years ago MS started to spread their bets on msn, xbox, server market, and a whole bunch of other things, which was a smart thing to do even though nothing paned out big like windows and office. Goog knows to follow this same pattern, which is I think what's behind the Andoid, youtube, and other bets. best case for them is to reach a MS-like plateau in 4-6 years, and then forced to focus on playing defense. I certainly would not want to bet against them right now, but I also learned that this market can turn very fast.
Sure, I hear this all the time. Is it really news? Most of us have been hearing the same thing for four years -- warring products groups, over-flat structures, anarchic day-to-day operations and opaque management -- and little has changed at Google that I can tell.
Until the tide stops rising in the online ad market and the water recedes a little, we're not likely to see any of the rocks beneath Google, however big the demonstrably are.
Sure, search is an effective advertising medium, but things are getting ahead of themselves. People are overpaying, skewing the numbers to make the ROI look better than it is. Eventually, the bubble will burst, or at a minimum deflate significantly. While search will still be a HUGE and viable business for GOOG, it will take a hit. When it does, it gets interesting.
http://www.Drewryonline.net
http://www.ShawnDrewry.com
And to finish, a trip down memory lane: a Fortune article from July 2000. Try reading it replacing “Microsoft” with “Google” throughout. Spooky. The headline:
I Remember Microsoft: Once computing’s red-hot center, Microsoft now has a tough time retaining its best and brightest employees. Here, some who left reflect on what they learned–and why they find life on the outside so much more alluring.
Google it seems to me is living its corporate 'adolescence' - always a messy time with uncertain outcomes!
In three of four years you'll be looking back and noticing that Google dominates advertising across digital more that it does now, has made giant inroads into mobile, tv, radio, print and just about every other media format and swallowed up much of the market cap that remains from the big 4 ad agency conglomerates that don't have a clue how digital has transformed consumer consideration and purchasing forever.
Until advertisers recognize how they are being ripped off by the brilliant spam monetization platform that is adwords/adsense, google has nothing to worry about.
The author is merely passing along an insider tip on what is pretty much a gossip site. "Anonymous" doesn't mean made-up, a fabrication, or non-verifiable, as many, many, many newsprint stories and their journalists will tell you. Read much?
Please provide an example of a company that had >70% global share of a market that "vanished" or "failed" (due to any reason) in the 3-4 year window we are discussing here.
The idea is asinine. Google dominates more in the rest of of the world than it does in the US and is printing money. Are you folks living in a vacuum?
It's good blog fodder but makes little sense as an argument (even though I bit :)
- Yahoo, even years ago, failed to frequently update and improve functionality of key products like email and "360" and small business Web services. They failed to show they were listening to the market to passing on cost savings or increasing storage and functional capabilities.
- Google seems to be is continually improving, tweaking, pushing forward, giving more for less, or at least the same price, whether Google Analytics, its tie-up with SalesForce.com, its email products or Ad Sense.
In the old days (1996-1998 or so) Y! focused intensely on the users. We iterated fast (days and weeks). We launched products fast (days and weeks).
But starting in late 1998 and into 1999 the type of people (not all, but many) coming into Y! changed. They came specifically to get rich, not to change the world. "Vesting in peace" became quite common. No one would take risks or responsibility.
People started believing their press clippings. We made big, overpriced acquisitions and did nothing with them (BCST and geo) instead of little, smart acquisitions that led to new products.
In 2000 and 2001 the people who built the original products left (many retired).
You're right, Y!'s core products have not kept pace in a long, long time.
Netscape.
-AOL
-SGI
That said, running a big company is pretty damn hard, so who knows how things are inside.
Anyone that's had contact with the Google employee base will attest to the arrogance that seemingly keeps them from co-mingling with the common folk: it's users. It's this class separation that will ultimately create a divide between the market's needs and GOOG's product/service portfolio.
Indeed one might argue that this is already happening for the vast majority of services outside of their core business; while the top maybe near (if not already put in) for Adwords.
Combine this with the lack of vision- but all of the hubris- that a gaggle of MBA's from elitist schools bring to the party, and you have a self-fulfilling prophecy in the making.
Anyone that's had contact with the Google employee base will attest to the arrogance that seemingly keeps them from co-mingling with the common folk: it's users. It's this class separation that will ultimately create a divide between the market's needs and GOOG's product/service portfolio.
Indeed one might argue that this is already happening for the vast majority of services outside of their core business; while the top maybe near (if not already put in) for Adwords.
Combine this with the lack of vision- but all of the hubris- that a gaggle of MBA's from elitist schools bring to the party, and you have a self-fulfilling prophecy in the making.
(read a more detailed post I wrote on this here:
http://businessmindhacks.com/post/microsoft-and-complexity)
From all I can see, Google is executing (especially in search and search ads) EVERY SINGLE DAY. Last year they tweaked their search algorithm over 400 times! And the Q1 earnings monetization surprise (after all of the ComScore handwringing) underscored this.
Neither YHOO or MSFT have done anywhere near as much, even though MSFT theoretically has almost unlimited resources at its disposal (if they could buy YHOO for $30-40 per share, you'd think they could have just spent the $ on executing on their own, IF they had any confidence in their ability to do so that is...).
Currently the GOOG monetization advantage that comes from their focused execution is somewhere around 50-100%. Note that this has NOTHING to do with "scale". It has everything to do with the advertisers being able to afford higher average bids due to higher average conversions. Period.
Conversion is the only thing that ultimately matters to an advertiser. Scale is a straw-man. If YHOO or MSFT had equal or better conversion numbers for the same keywords, then advertisers would jump on that. The individual advertiser could care less about the total query share numbers, or total number of clicks, they only care about their ads converting.
If you place a ***direct response*** ad in your local newspaper, do you care what total percentage of the greater region that newspaper reaches? Nope.
If an ad doesn't convert you can't long afford to run it. In search ads, if you fail to convert the clicks you get, you can be bankrupt before you know it. It's that simple.
Currently, MSFT and YHOO have wasted 5 months already, let's see if they can waste almost the entire rest of the year and then some. If the Micro-hoo deal went through TODAY (see recent rumors), it would likely waste another 6-12 months.
Google will be just fine. Until someone completely outflanks them with a "blue ocean strategy"/new category. But Google is working pretty hard to actually have that come out of their own corner.
the media tends create a halo around a company based on it's stock performace and thus any or all of their attributes are reasons for their outstanding success.
look at semel. here in early 2004 he was profiled in a best managers of 03 article. http://www.businessweek.com/magazine/content/04_02/b3865715.htm?chan=search
and here
http://www.businessweek.com/magazine/content/05_02/b3915639.htm?chan=search
and less than 3 years later, we have this
http://www.businessweek.com/technology/content/jun2007/tc20070619_441857.htm?campaign_id=tbw%22
he probably didnt change that much during that time. so it's hard to say what specific things he did in 03 that can be attributed to the company's great performance and conversely what specific things he did or didn't do that led to poor performance in 06-07. just because there's a correlation doesnt imply causation.
here the media changed its tune pretty quick, as it usually does.
basically whoever is out performing in the stock market, the media tends to pick up their attributes and these become the "secrets" to success. right now everything google does is the recipe for success.
Compagnie de l'Ouest, 22nd October 1895 : One person was killed when the Granville - Paris Express overan the buffers at Gare Montparnasse.
The Granville - Paris Express nose dived into the street after overunning the buffer stop at Gare Montparnasse. The Granville - Paris Express was carrying 131 passengers as it approached its destination, Montparnasse Station in Paris. The train was in the charge of locomotive No. 721, a 2-4-0 (type 120 in the French style of notation) and was being driven by Guillaume-Marie Pellerin.The train was made up of twelve vehicles. Two luggage vans and a postal van were coupled behind the locomotive. There followed eight passenger carriages and another luggage van coupled at the the rear. There were 131 passengers
The train had left Granville left at its usual time of 0845 but was running several minutes late for its arrival time of 1555. Driver Pellerin was an experienced man having worked for the railway for 19 years. Although he was understandably anxious to make up the lost time, he would have been well aware of the rule that forbade drivers to use the Westinghouse brake to bring trains to a halt at Gare Montparnasse. On this occasion however, he guided his train at speed into the station. He attempted to apply the Westinghouse brake, but it failed to operate. He was left with only the locomotives brakes to stop the train. But owing to the speed and the weight of the train, these were inadequate for the task. The two conductors on board realised that they were entering the station at a speed which was too high to stop safely. One of them at least, Albert Mariette was pre-occupied at this time. Although he should perhaps have been alert to the situation of the train, he was instead concentrating on completing his paperwork. It was at the last moment that he realised the train's plight and he attempted to apply the handbrake. He had barely begun to turn the handle when the locomotived ploughed through the buffer stop.
The engine careered across almost 100 feet (10Metres) of the station concourse, crashed through a two feet (0.6m) thick wall, across a terrace and sailed out of the station as it plummeted onto the street 30 feet (9m) below. This was the Place de Rennes which carried the tramway between the station and Place de l'Etoile. The falling locomotive just missed hitting one of the trams.
The front three vehicles were extensively damaged, but all the passenger carriages remained on the track. There were only five serious injuries amongst those travelling on the train. These were two passengers, the fireman and the two conductors. However, a woman bystander in the street was killed and another was injured.
Driver Pellerin and Conductor Mariette were both prosecuted. The driver was found guilty by virtue of having driven the train too fast. He was fined 50 francs and sentenced to two months imprisonment. He was not however required to serve the term of imprisonment. Mariette was also at fault for not having applied the Westinghouse brake himself. He was fined 25 francs.
People are often a victim of their own success, and when you basically have a perpetual money machine like AdWords it's easy to be in denial about problems and let them fester.
Excite? In 98 it lost $30mm. Hardly Market dominance
AltaVista? Not sure what they ever dominated
SGI? Its market cap peaked in 95 and in still was pretty valuable until the bubble in 00.
Netscape? Sure they dominated for a few years... while never earning a penny
AOL? Yes they don't dominate like they did SEVEN years ago. But they've hardly vanished with 10mm subscribers and possibly the leading Ad Network in Platform A.
I'll say it one last time. Google is not a search company. It is a data company -- and to paraphrase David Ogilvy, they key to advertising success is information.
Ted L once said, 'perception is reality'.
Platform A is the largest Ad Network in terms of reach and is a staple of most media plans for any brand advertising. Online advertising is not a big business? Oh, what are we talking about here then..?
The online ad market is growing at about 20% y/y. That qualifies for me as big business.
AOL also has the#1 IM service and the #6 online video property ahead of Disney (#3 combined if combined with TW).
I'd peg AOL at $15B company. With good management it could be a $50B company in a few years. AOL is not Google, but it is far from irrelevant.
This isn't exactly on the subject, but I also remember some company that barely crossed my mind a few days ago... what was it called? Big Blue, IBM or something? Haven't even seen one of their desktops or operating systems or anything for a long time.
Well, the bigger they come, as we have all heard...
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