Further Evidence Of Google’s Dominance Being Diminished?
Well I just read that Google missed second quarter earnings expectations. Although earnings were up 28% it clearly failed to meet investor expectations as the stock fell 5% in after hours trading. Is this a sign of further trouble in the short term? Probably not. But this is clearly another indicator and further evidence to suggest that Google’s dominance in search may be on the decline.
Google isn’t just losing web search engine market share but they are now beginning to disappoint financially. To me it suggests that maybe other players in the market are starting to level the playing field and beginning to hurt their earnings if not directly, at least in a somewhat indirect and tangible way. Google’s acquisitions have been widely reported and here is a good list of them. Over the years one can see that their acquisitions have increased dramatically. Here is a link to a graph from Mashable showing Google’s acquisition by year from 2001-2007. This at least suggests that there has been a strategy at Google for some time to distinguish itself from its competition through acquisition.
These disappointing earnings are possibly an indicator that Google’s attempt to maintain it’s advantage and distinguish itself from the competition through acquisition may be a failing strategy. As the above shows, it’s apparent that Google’s focus may have strayed from innovating from within to innovating through acquisition and this may be having an negative impact on its bottom line in several ways. First, and most importantly maybe some acquisitions were not wise and may have had a directly detrimental impact on its earnings. Second, it’s been readily apparent to me for a while that the relevance of Google’s search results are not what they once were or could be. Is it possible that by focusing so much on acquisitions that Google has inadvertently neglected what is truly important and that is improving its search results. Could this be the real reason why Google’s web market share declined in June? I don’t know for sure but it’s an interesting topic for debate.