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Google Can’t Grow New Products, Hence the Acquisitions



Towards the end of Bill Tancer’s opinion piece for Time magazine there’s a great observation about the growth of Google’s new products – they’re not growing!

However, for all of its success, Google’s online dominance has been limited to search. In web-based email, for example, Google’s service, Gmail, is in a distant fifth place to leader Yahoo! Mail, which is over 12 times the size of Gmail in terms of visits. Google has barely made a peep in social networking; MySpace, the #1 social networking site, is over 300 times the size of Google’s Orkut service. Even mainstream information such as Google Finance is an order of magnitude smaller in visits than the industry leader in financial information Yahoo! Finance.

As Bill suggests, and I agree, Google has struggled to build anything that comes close to the dominance it has in the search space (64.8% share). We all look on Google as being a company that builds great products, and even I’m among those that warn industries to prepare for when Google enters your market, yet what has Google dominated outside of search? Not much really and so is instead using its huge war chest to buy its way into dominance (such as acquisitions of YouTube and DoubleClick).

Did I miss a Google grown product that dominates its niche (outside of Brazilian mafia social networking)?

  • http://thearticlewriter.com/blog/2007/06/04/yes-ebay-acquires-stumbleupon/ Matt Keegan

    Google really doesn’t have to develop anything new. As the old saying goes, “If you can’t beat them, buy them.” Looks like this is the Google business model these days.

  • Eduardo Fenili

    I think you have to take into account how long Yahoo and MSN mailing accounts have been around. Its not very easy to get one to switch from a free online email they have used for several years.
    YET, Gmail has taken a lot of those people and is growing. Maybe I am 100% wrong, but I would take a guess and say the sign-up rates for those 2 may favor Gmail.

    The same can be said for their other products like Finance and such. I have seen many people slowly adopting those. Myspace was acquired as well, so I think thats a bad example.

    Finally, I believe the bottom line is many large companies do exactly as Google does. They talent like nobodies business, but they also purchase it as well:)

  • http://www.idoseo.com Charlotte SEO

    Oh I’m sure they will build something into Blogger for social networking….

    Perhaps buy Vox which is pretty cool

    David

  • squeez

    If Yahoo and Microsoft did not shackle their users by making POP access a pay-only feature, defections would be even higher.

  • http://www.thevanblog.com Steven Bradley

    Sounds very similar to Microsoft who dominate the OS and a few applications tied to the OS, but has never managed to dominate any other market. And hasn’t Microsoft been buying up other companies for years?

  • http://www.beagooddad.com/ Mike

    Google Reader? Did they build that?

  • http://www.marketingpilgrim.com Andy Beal

    @Mike – good call, I believe they did.

  • http://www.ianfernando.com ianternet

    agree with matt – google just bought feedburner since they were behind in making their adsense feeds

  • http://www.mathpoints.com Andy

    Nothing wrong with buying/partner with other expertises to make existing products better. Last time I check, we still use Gmail, Google Map and their Reader.

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  • http://www.cavanmoon.com Cavan Moon

    I think Gmail will eventually overtake Yahoo and Hotmail, but that will certainly take time. Actually, eROI released a study it conducted of personal email client usership during the 2nd quarter of 2006 that found Gmail was the most popular. Unfortunately, the study only consisted of 300 responses. I’ve looked for similar studies from EmailLabs or eMarketer, but haven’t turned up much.

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  • http://www.webmaster-money.org Webmaster Money

    Exactly, it is faster to buy developed companies and rebuild them then create something new. Firs you get rid of competition by buying it and second you get the competition members base which will subscribe to other Google services eventualy.