Analysis of IT news

Saturday, November 03, 2007

The challenges it had to face: Google

After Microsoft and Apple, let's have a look at Google. What challenges did the company had to face and overcome? How did it affect the company's culture?

Google has been releasing a wide variety of Web services, from web search (its core product) to Web-based email. If the company seldom pioneered a new market, it has often tried to offer a new approach to do something old and tried to raise the bar. There were a lot of Web search engines before Google, but the company released a search engine that was faster and more efficient than what was around. Gmail entered the Web-based email market late, but although it didn't become #1 of that market it nonetheless shook everyone up, forcing competitors like Hotmail and Yahoo Mail to significantly increase the storage they were providing. And when it was released, Google Maps was way beyond any existing Web mapping service in terms of user interface.

Pushing the envelope is by definition everything but easy, which is the first challenge that Google is constantly facing. As a matter of fact, the company started as a thesis project by its founders, two PhDs from Stanford. That's why Google has been very aggressively hiring talents right out of the university all over the world. Where Microsoft likes to hire MBAs, Google likes to hire PhDs. Two of the company's obsessions have been 1) algorithms and 2) user interface.

A second challenge the company had to face has been technical scalability. Services that push the envelope put a greater strain on the servers. When Gmail offered over 4 times as much email storage as the competition, its email search feature couldn't take 4 times longer. Likewise, Google Earth allowing users to "fly" above various points of the globe implies that a continuous flow of images needs to be sent to the user with as little interruption as possible. On top of that, when it launches a new service, Google knows it is likely to be flooded with requests, if not by a flock of curious, one-time users. That's what happened to Geoportail, a French territory-oriented, Google Maps competitor sponsored by the French Government. The service indeed collapsed after a few hours under the load of so many people wanting to try out the new site. So for Google, launching a new Internet service doesn't only mean writing some code, it also means a powerful hardware architecture to back it up. This is why Google has developed powerful data centers that spread the load across thousands of machines. It has also been deploying data centers all across the world and has been buying a lot of dark fiber to build its own network. Algorithms might be Google's pride, the company nonetheless has been developing physical assets to keep a competitive edge.

Another challenge the company has been facing is customer scalability. Google's business model translates to millions of customers, the majority of them providing little revenue: the millions of little website displaying Google ads, or the millions of small businesses buying ad space on Google search engine. This means that the company doesn't have the resources to deal with them all personally if it wants to keep healthy profit margins. As a result Google has been automating everything. Combine with the fact that the Internet has allowed Google to release a service directly to end users, and you have a company that doesn't have to work with anybody else to release new services.

The liability for Google is that it is used to have automated mass "partnerships", behaves like a black box to its customers and is used to change its services without much discussion with them. That's how the company recently changed its PageRank algorithm without warning, never mind that it upset numerous Google Ad and AdSense customers. Likewise, customers who believe they've been victim of click fraud will have the hardest time getting an email response from a human being, let alone talking to one on the phone.

This behavior is an even larger liability when it comes to real partnerships. To begin with, the company tends to have a "release it on my own" approach instead of seeking partners to help. It sometimes seeked some partnerships but it's an exception more than the rule (examples of such exceptions being the book scanning project or the free Wi-Fi project in San Fransisco). The "release often, release early" mentality works great for autonomous Internet services, it is less successful for services that require consensus. This is how Google got sued by several newspapers worldwide because it was indexing their websites without their approval. It's only much later that Google struck a partnership with some news agencies and start hosting some of its own content. Likewise, the Web search giant's attitude can hamper the promotion of its OpenSocial standard geared towards social networking sites. Here, Google just cannot do as it pleases without listening to its partners.


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