Is Larry Page asleep at the wheel? Because it sure feels like it.
Facebook is conducting an all-out assault on Google. It just launched embeddable videos and a new ad network. Those businesses will compete with YouTube and Google’s DoubleClick display ad business.
Facebook has become a juggernaut in video lately, and this will only bolster its position. With its incredible data on users, it will be an attractive destination for video ads and display ads, weakening Google’s display business.
Google looks like it is basically helpless to stop Facebook. It doesn’t have an answer for Facebook. It tried and failed with Google+. Google doesn’t own a “stream” like Facebook’s NewsFeed, where it can stick high-quality brand advertising right into what people are reading and doing.
From the outside looking in, as Facebook gets stronger, it looks like Google is running in the wrong direction. It looks like CEO Larry Page has handed off responsibility for the company at a critical time.
While Mark Zuckerberg zeros in on real opportunity like mobile ads in the Facebook app, video plays in the app, monetizing Instagram, and building platforms with WhatsApp and Facebook messenger, Larry Page is looking at more pie-in-the-sky stuff like robotics and self driving cars.
Robots and self-driving cars are cool, and we should all be thankful that Google is willing to experiment with them. However, it’s not clear they’ll ever be huge businesses.
It feels like Page is bored with the nuts and bolts of running an advertising-based internet company. He seems to think things like Instagram or Snapchat are too prosaic. He isn’t going to dive into the display ad business, pushing Google’s business to the next level. He’d rather work on changing the world.
Zuckerberg, meanwhile, is still interested in pushing his company forward, even if it means working on smaller projects like video ads.
To be clear, Google is not suddenly going to go kaput. It’s not at risk of going out of business. It will continue to mint money. But, it’s hard to see where big growth is going to come from.
Mobile is neutralizing the power of the search business. People are using apps more and more for their searches.
YouTube is not the business people thought it would be. It did just $4 billion in revenue last year, and it’s only breaking even.
Android is a fantastically successful mobile operating system, but Apple’s iPhone has the most valuable users, and it’s taking share from Android. Android has never developed into a real business and it’s unclear if it ever will.
What is the future of Google’s business? Larry Page has been a strong advocate for Google inventing the future through fantastic ideas like balloons that deliver internet, and contacts that measure glucose, and a startup that can prolong our lives. But are those ever going to become businesses?
In Google’s defense, the tech industry tends to move in quick cycles. Just two years ago, the world was in love with Google and thought it was going to be a trillion dollar company. Facebook three years ago was seen as a risky company. Apple was tanking three years ago. Today, that’s all turned around. Facebook and Apple are the kings, and people are worried about Google.
So, it’s entirely possible we’re being overly harsh reactionaries.
But, it feels different this time. Right now it feels like Google is directionless and Facebook has all the momentum. It feels like Google could turn into the next Microsoft — a company with brilliant people and brilliant ideas that fails to deliver, sending the stock sideways for a decade.