Is Google a one-trick pony?
Google is the uncontested leader in search market query share today, and its $565 stock price and $175 billion market cap validate the proposition that it has monetized search better than any competitor. But the question, "can anyone catch up with Google in search?" is probably the least interesting question that marketers need to ask today. A far more germane question is: "who will dominate a world in which search is no longer associated with a particular brand name or URL, but a ubiquitous utility whose functionality is an automatic feature of all digital devices?"
1. Tech players come and go
Those who claim that Google is unstoppable seem to believe that the mere fact that a given technology player is on top today means that it will be on top tomorrow, despite the fact that this notion is contradicted by everything we know from the history of the technology business. Tech companies that once seemed unstoppable include IBM, DEC, Gateway 2000, WordPerfect, Novell, AOL, Earthlink, Netscape and many others. I don't need to remind you of the hundreds of technology companies, each of which promised to "be the Next Netscape" or the "next eBay," that went bust in 2000 to 2001, flushing trillions of dollars worth of speculative investments down the drain.
There's an old saying about New England: "if you don't like the weather, wait 20 minutes." The tech industry equivalent might be: "if you don't like the leader, wait 20 fiscal quarters," because it's rare that companies, even great ones, stay on top for long. The winds of change blow that swiftly and unpredictably.
2. Success in one area is no guarantee of success in another
Google's success in monetizing search is no guarantee that it will enjoy success in areas beyond search. If one looks at Google's record in extending its self-service media buying model to non-search media (e.g., Google Print) or in developing non-search products (e.g., Google Video, Google Answers, Orkut, Froogle, among others), they have failed to gain any traction. It's too early to say whether Google's ambitious plans to extend its tentacles into TV, radio and the mobile environment will succeed or fail. But achieving dominance in these areas will be an uphill battle, and few believe that Google's lead in search will necessarily translate into an advantage elsewhere.
3. The battle for computing's next frontier will be fierce
The traditional desktop PC-monitor-keyboard-Web page paradigm has been with us for thirteen years, and it's currently hard to imagine the connected computing experience without it. But there are slow tectonic shifts happening that one day in the near future will rip it apart. There will likely be no single device that entirely replaces the functionality of the general-purpose personal computer, but its all-in-one feature set will be distributed among specialized devices that are seamlessly connected. Google's management realizes that its future growth depends on making its services ubiquitous on this new set of devices. But the mere fact that Google has stated its intent to dominate the new computing paradigm (whose final form has not yet been determined) indicates that they recognize that they are in for a fierce battle against technology titans. Those powerful and entrenched players, including the telecom networks, are clearly not going to let Google dictate terms about what happens on their own networks, and this realization clearly accounts for Google's apparent intention to recast itself as a telecom player in order to perform an "end run" around them. Joining telecoms in opposition to Google is Microsoft, who not only dominates the desktop platform but has spent many years, and billions of dollars, building its own gaming and mobile computing platforms that are effectively "Google-proof."
Only history will be able to tell us if Google is in fact a "one-trick pony" that happened to stumble into a lucrative advertising model, milked it for all it was worth but was ultimately unable to adapt to the changing shape of the computing environment. Google has the will, the cash and the infrastructure to continue to dominate search for some time, but as search moves beyond today's computing paradigm the picture grows far less clear. And the history of technology innovation is rife with companies whose spectacular initial successes were, in the language of the music industry, "one hit wonders," if not "one trick ponies."