Throwing Mud Against the Wall

21 Jun ’06

CNN’s Money.com runs a breathless “star money manager thinks X” piece on the dangers of investing in Google. The article may well be right about that – who really knows – but one discussion caught my attention:

Kobrick said that Google clearly has a great product, but that alone isn’t enough to make it a good stock. He worries that the company is still experimenting with how else to make money beyond search advertising.

The company has launched many new products over the past few months, and while each product release tends to generate breathless hype, there is little indication yet if any of them will be big profit generators for Google.

“Google’s throwing a lot of mud against the wall to see what sticks. That’s pretty scary,” Kobrick said.

This tracks a meme that has gotten a lot of attention in the ‘sphere in past weeks, and it might well be right, but I don’t see this as scary – I see it as healthy. Where else do ideas come from? And doesn’t a company the size of Google get to do some R&D? And when it does, can’t it do it publicly – just to see what, er, sticks, with the users? The Google Labs concept – or any alpha or beta release programs, for that matter – have always struck me as a ridiculously clever way to get users involved in product testing and development.

{ 2 comments… read them below or add one }

Mark Federman June 26, 2006 at 07:03

In a world in which “consumers become producers” Google’s approach of trying things out in public and going with what works makes perfect sense. Besides, other companies have always done this with test markets, focus groups and the like, except that the products have always been much closer to launch before they see even the glimmer of the light of day. Google’s approach makes sense in the UCaPP world: develop applications “in public,” and obtain a reading of their usefulness early on in the cycle.

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Josh June 21, 2006 at 20:55

Rob,

I completely agree. I think what the ‘finance’ types are complaining about stems from the initial infatuation with all-things google. I think some of the band-wagon jumpers jumped on when the stock took off with the idea that whatever Google touched would automatically turn to gold because, well, it was google. Now that that isn’t happening, they are worried about the multiples Google received, because it might not be as sure a thing as they once thought.

I always thought that IBM Labs was a brilliant way for a company with that kind of resources to get really bleading edge. My only worry with Google is that a lot of their new ‘mud’ is not really unique, there are quite a few competitors, and with some exceptions, the market (of users) seems to prefer the solo up-and-comers (Flickr, MySpace, Craigslist)…

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