The mainstream media is losing confidence in Google, which for some
time has dominated several areas of the tech industry, but is now
displaying signs of "losing touch."
Case in point: Yesterday, New York Times' Farhod Manjoo published a column titled "Google, Mighty Now, but Not Forever" in which he argues that companies "meet their end not with a bang, but a whimper, a slow imperceptible descent into irrelevancy." Manjoo draws heavily on a blog post by industry analyst Ben Thompson as evidence for Google's gradual demise.
According to Thompson: Google may very well be in a similar situation to early-eighties IBM or early-oughts Microsoft: a hugely profitable company bestride the tech industry that at the moment seems infallible, but that history will show to have peaked in dominance and relevancy.
Thompson's argument is based around the fact that Google's ad business is unprepared for shifts in the industry. Native advertising is on the rise, he argues, the key to which "is the capability of producing immersive content within which to place the ad, such as Facebook's news feed, Twitter's stream, a Pinterest board...
Google has nothing in this regard."Google enjoyed $11.3 billion in ad revenue in Q3 of 2014, the vast majority believed to have come from search advertising. (Revenue from YouTube, one of Google's biggest properties outside of search, is just $1.3 billion annually). So when the broader ad industry begins to shift, it's a big problem for the company.
As Thompsons says, "Google is dominant when it comes to the algorithm, but lacks the human touch needed for social or viral content."
It's a compelling argument. But Google's woes are not limited to changes in advertising. There are other noticeable weaknesses.
Last year, a record 1 billion Android smartphones were shipped. Theoretically, Google should be in a position of massive growth: Android phones are increasingly less expensive compared to Apple's, while its potential customer base is expanding as the next billion people get access to the internet in emerging markets.
Case in point: Yesterday, New York Times' Farhod Manjoo published a column titled "Google, Mighty Now, but Not Forever" in which he argues that companies "meet their end not with a bang, but a whimper, a slow imperceptible descent into irrelevancy." Manjoo draws heavily on a blog post by industry analyst Ben Thompson as evidence for Google's gradual demise.
According to Thompson: Google may very well be in a similar situation to early-eighties IBM or early-oughts Microsoft: a hugely profitable company bestride the tech industry that at the moment seems infallible, but that history will show to have peaked in dominance and relevancy.
Thompson's argument is based around the fact that Google's ad business is unprepared for shifts in the industry. Native advertising is on the rise, he argues, the key to which "is the capability of producing immersive content within which to place the ad, such as Facebook's news feed, Twitter's stream, a Pinterest board...
Google has nothing in this regard."Google enjoyed $11.3 billion in ad revenue in Q3 of 2014, the vast majority believed to have come from search advertising. (Revenue from YouTube, one of Google's biggest properties outside of search, is just $1.3 billion annually). So when the broader ad industry begins to shift, it's a big problem for the company.
As Thompsons says, "Google is dominant when it comes to the algorithm, but lacks the human touch needed for social or viral content."
It's a compelling argument. But Google's woes are not limited to changes in advertising. There are other noticeable weaknesses.
Last year, a record 1 billion Android smartphones were shipped. Theoretically, Google should be in a position of massive growth: Android phones are increasingly less expensive compared to Apple's, while its potential customer base is expanding as the next billion people get access to the internet in emerging markets.
