Clouds at Google

Despite another stellar quarter of growth, clouds are forming over Google.

In terms of real earnings, the company remains a one-trick pony, the pony being AdSense. AdSense is now riding a trend that is taking ad revenue out of other media -- even TV.

But what else is making money? Analysts note that video ads are starting to sell, but are they material to profits? Nope.

The bigger problem is bureaucratic. Google is having to build a system to manage its various technology efforts, along with metrics with which to measure results, and a process for replacing managers who don't perform.

This is proving the most difficult challenge.

Take Google News, for instance. (Please.) Google has yet to place any ads on it, fearing a backlash from media that will claim it's profiting from their efforts, stealing their content. The online landscape for media is already abysmal, with some news sites sitting behind paid firewalls, others sitting behind registration firewalls, and some refusing entry completely except to designated readers (like Billboard).

The news engine is also, well, cranky. Some lead stories stay up for a day or more. And the choice of which sites to include, and which to exclude, remains unclear.

For instance, my open source blog at ZDNet is included. Using open source as a keyword, I will often be greeted by one of my stories in the morning. I've sometimes seen my own face staring back at me. But I've yet to figure out the method used for putting some of my pieces on the top of the stack, and I'm not really trying to break news there.

TechDirt has been in contact with the Google News team over issues like this, and the answers they've gotten back are as clear as mud. At some point Google either needs to put someone there who can be clear about things, find a business model for the service, or (frankly) pull the plug.

The same is true for Blogsearch. Again, this site is indexed. So is Open Source. But voic.us, which I've been running for a year on a Drupal platform, isn't. There should be a clear delineation of what goes into this -- RSS feeds. But again, clear as mud. And no business model. And no publicity for the site within Google.

The management process at Google is to hire the very best people, and to give projects their head. That's great. But if this is to be a business, you have to show a little discipline, rein some things in, push others, set priorities, seek profit.

Is this happening? Doesn't appear to be. Yet.

Comments

[Jesse Kopelman]

What about the concept of good will? How much does it really cost Google to run some of these things? Couldn't it just be looked at as advertising expense -- keeping the brand out there and associated with whatever is hot. Anyway, I think you are showing cognitive disonance here. It takes times to do things on a large scale. Big companies have to run at real-world time (years) not Internet time (months). Perhaps the real argument is why does Google have to be so big? Why not pare down to a few hundred employees, focus on search exclusively, and start paying some fat dividends to investors? It's like ever since Microsoft we've fallen into the trap of thinking that a public company has to be a growth company. That is just not the case.