Google: Too Many Moving Parts?

Back in August 2006, The Oxford English Dictionary updated its definitive record of the language with a new entry, adding “Google” as a verb, meaning to search the Internet. That put the firm in the exalted company of brands like Xerox, FedEx and TiVo, which also gave their names to the actions they invented. 

Fast-forward to today and Google is stronger than ever in search. However, over the same period, it has a record of ups and downs as it has attempted to extend its dominance across the digital media and technology spectrum. Its ambitions, summed up in its mission to “organize the world’s content and make it universally accessible,” has led it in diverse directions, pitted against a host of competitors, ranging from digital giants like Microsoft to upstarts like Facebook, Twitter and even traditional media companies. In fact, Google dabbles in so many businesses, it’s hard to keep track of them all. Remember when Google jumped into the nascent in-game advertising space with the acquisition of Adscape Media? Or how about Google’s now-defunct answer to Second Life, Lively, which lasted all of four months?

Time and again, Google has had mixed success in establishing itself as a leader in today’s most promising areas of digital: social networking, mobile services and video advertising. It’s also involved in display and more traditional advertising. The established players in these segments see Google as a disruptive force with intentions to take over the world. Others just see the Web giant as a company with extremely deep pockets that can pretty much afford to experiment wherever it wants. “I think for better or worse Google has turned into a Microsoft knockoff,” says Mark Cuban, the founder of HDNet and owner of the Dallas Mavericks. “They do some brilliant things, fail at others and with some they slog along, subsidizing it till something clicks. Just as Microsoft generates ungodly amounts of cash from Windows, Office and corporate apps, Google creates boatloads of cash from search. They use that cash to mine other businesses and fight the battle of attrition.”

Indeed, Google’s Web search ad revenue still accounts for most of its $23.65 billion in revenue. A large part of the problem is the simple fact that, as recognized by the Oxford Dictionary’s editors, to many consumers and even advertisers, search is Google and Google is search.   

The company remains determined to extend its ad dominance beyond search

By Brian Morrissey, Adweek

Google turned to display advertising as a natural extension of its search business. After all, the area seems ripe for the application of Google’s core strength of using technology to bring automation and efficiency to inefficient markets. One statistic that sums up the need for change: Administrative costs for a Web banner campaign eat up 28 percent of the spending v. just 2 percent in TV, according to ThinkEquity.

“We think about bringing the science of search to the art of display,” says Barry Salzman, head of media and platforms for the Americas at Google.

But that doesn’t mean Google always succeeds in its first try. Unlike search, where Google was in effect inventing a market, the display market was eight years old with a raft of strong incumbents when Google dipped its toe in 2002, first running its regular text links targeted to the keywords on a page and finally two years later running static banner ads. Over the years, the Google Content Network has evolved to include the type of display advertising commonly offered in the industry. Yet Google has failed to capture much of the market.