Dennis Kneale on Google

Last Friday on CNBC, Dennis Kneale, the network's new main print guest, and managing editor at Forbes, laid out a simple explanation for Google's continuing spreading of its resources across so many areas- search, advertising, telephony and space, to name just a few.


Kneale pointed out that Google CEO Eric Schmidt ran two companies- Novell and Sun- which were heavily damaged from competition with Microsoft. In Kneale's view, Google's many investments constitute a continuing campaign by Schmidt to pulverize his former nemesis.


Call me, well, sceptical- of pure corporate motives- but I think his explanation makes some sense. Some corporate leaders can't let go of old grudges, and begin to use their shareholders' assets to settle personal scores. Or simply advance personal agendas.


I, too, along with Kneale, think Google is courting disaster with its ever-widening business reach. I wrote this post a little over two years ago, shortly after the birth of this blog. In that post, I wrote,

"I think that the two guys who founded google are very smart. They built a better search engine, but they realize the next great search engine is likely to surpass them, just as they dethroned Alta Vista. Yes, there actually were search engines prior to Google. A friend mentioned to me a few months ago for how little Alta Vista was ultimately purchased by some European company. It was pathetic.

I believe that the owners- excuse me, senior executives now- of Google realize that their best hope for continued consistent value, and thus wealth, creation is to become so entangled in the online habits of their customers that Google is no longer perceived as a search engine. Otherwise, they face the ever present threat of rapid decline.

Consider this. The two founders of Google probably don’t spend as much time creating new and better search procedures as they once did. Further, current students at better engineering schools across the country now have something at which to aim. By virtue of its current dominance, Google probably can’t take advantage of the next smart search engine designer’s new twist. And, to be honest, using a new search engine is ultimately as simple as going to a new website.

Thus, the rapid expansion by Google into, well, just about anything online that can tie your behavior into their brand, rather than their search engine, per se. For example, email services, instant messaging programs, a whispered foray into the remains of AOL, wifi rollouts in San Francisco, and, now, a voluminous database of searchable literary content. They must be really worried. Because very little of these enterprises, by themselves, require integrated consumer behavior. Rather, a single company offering all of them hopes they can bend consumer behavior to their version of service packaging.

Not likely in this internet and information age, is that?"

I still believe this to be true. And I think it reflects what Dennis Kneale observes in Google's current environment. They are just throwing resources at anything they believe can bring traffic and make a few bucks. Anything to complicate their business model, so it doesn't appear to all hinge on a search engine which continues to age.

Sure, if someone dreams up a significant advance in search technology, Google may just buy them out. Still, isn't that a sign that a company is already aging? When it can't sufficiently improve its own core technology to fend off competitors, and needs to share its wealth with them?

Which, of course, is an insidious form of trust-forming behavior. Rather than let a competitor get a foothold, just license their technology, which is legal under Sherman and Clayton Anti-trust law. Or buy a firm that is so small that it won't trigger FTC review.

But Google seems to be already so sprawling in its business endeavors as to be unmanageable, in the conventional sense of the word.

Cisco was once deemed to be the ne plus ultra of high-growth tech firms. Then it flamed out in the bursting tech bubble of 2000.

Could Google begin to slow from a gradual inability control/manage itself, and simply fail to appropriately allocate resources among so many competing projects, many of which will have serious competition?

Personally, I think it will. It's just the way businesses mature, irrespective of the content of their industry.