Is Google falling apart?
February has not been kind to Google (GOOG). The fragile status of its YouTube unit was on display this week, as The Browser noted yesterday, when Viacom (VIA) announced that it would zap its videos over startup rival Joost. The National Hockey League, which had once embraced YouTube, is now apparently yanking videos from the site. And while it's a single-market hit, we noticed that Norwegian media giant Schibsted announced that it was starting a local competitor to YouTube. Now comes word in today's Wall Street Journal (subscription required) that the much vaunted deal between Google and CBS (CBS) seems to be falling apart.

And thus descend the vultures. Over at PaidContent, Rafat Ali was so eager to write the bad Google news that he let several typos go up on the site uncorrected.

Nobody's arguing that the company is going to go out of business; the stock is down a little this morning, but so's the rest of the market. The Browser thinks instead that certain realities about Google's business are beginning to sink in. YouTube is a tremendous first-mover in the promotion of online video but, to paraphrase something the wonderful James Fallows once wrote, if first-mover advantage were really absolute, I'd be writing this item on a Kaypro and you'd be reading it on a Wang. Adam Lashinsky's masterful Fortune cover story last fall on Google's embrace of chaos sounded cutting-edge, but it could just as easily fall into a form of neglect. Google may develop and buy fabulous products, like the Blogger publishing tool I'm writing on, but it is not always good at cultivating and growing them. The company needs focus, and until it finds it, February could turn out to be a very long month.
Posted by Jim Ledbetter 9:37 AM 12 Comments comment | Add a Comment

Disagree with this article and agree with the media pundits. Chaos is the best way to run a company. Imagine how productive employees can be when there is no organization, structure, business process, or even requirement to make money. The success of the Google model speaks for itself - look at how diversified the revenue stream has become since IPO - look at the pageview market share for all of their newer products like Google Finance. To suggest that anything is inperfect about Google is simply to admit that "you don't get it."
Posted By Jack, Sunnyvale, CA : 11:17 AM  

Hard drinking in the morning can cause illusionary and irrational thinking...I guess the next rumour of Google's immenent demise will be clear signs their employees are forgetting more often to flush the toilet.
Posted By Mike Sams, Cocoa Beach, Fl : 12:06 PM  

It would be premature to draw any conclusions from the WSJ article on YouTube. At this stage in the negotiations, Viacom and the other media companies are just posturing. The first one to reach a deal with Google will get the best one. The others will then fall over one another to get in on it but will have to pay the price of waiting too long.
Posted By Ed Lasky, Chicago, IL : 12:42 PM  

The author raises a good point but let's not get carried away. Agreed, it's not all hunky dory for Google, but at the same time, stakeholders needn't panic...not yet. Google is facing growing pains, it still has to create sustainable revenue models for the various diversified businesses it has launched. Is the advertising revenue model sustainable in the long term? I don't know. How many ads do you click on when you're searching the net?
Posted By Mona, Los Angeles, CA : 1:00 PM  

Speaking of neglect, did anyone else notice the condition of Eric Schmidt's shoes in that cover photo. Or was that a planned snub at east coast sensibilities: 'Buffed brogans are for the ceos of mature dividend paying companies.'

Don't want to fall into the 'post hoc ergo propter hoc' fallacy concerning Google's success and chaotic processes, but isn't highly motivated, transparent, competitive chaos the essence of capitalism?

Pour yourself another one. I gotta believe that no one there has to flush their own toilet.
Posted By Chris Kerlin, Fort Lauderdale, FL : 2:09 PM  

well the only thing I know is that youtube is going down if they can't get their act together...the site has soo many problems that seem to never get fixed and when they do something else goes wrong...people are starting to leave and go somewhere else...they need to start working harder and fixing these problems
Posted By Matt, Bridgeport, CT : 4:22 PM  

Google is hardly pulling a Britney Spears yet.
It's hitting a few bumps, but it is far from "falling apart".
Posted By Edna, Austin, TX : 4:23 PM  

Jim, excellent take here. I agree that Google needs focus. They are resembling Yahoo of several years ago... when the main differentiator for Google was their focus, and Yahoo's lack of it. It will also be interesting to see how the search marketing industry in general impacts the big 3 search engines moving forward.
Posted By Jon, Baltimore MD : 4:35 PM  

Google overpaid for YouTube. It could have been bought out at the fraction of $1 billion Google shelled out.
Posted By sh, New York, NY : 5:30 PM  

First off, Google paid way too much for YouTube, but what do I know about M&A. Secondly, I think YouTube is great for personel video sharing (like Flickr is for photos) eventhough I've never personally used the site to share videos yet. But when it comes to big studio sitcom/movie/sports sharing, it's another Napster to me. Good for a couple of years until something better comes out or dies from lawsuits. There will ultimately be something like iTunes but for big studio video sharing. Whether Google can morph YouTube into it before the others, only the future holds.
Posted By Ben, San Diego, CA : 6:06 PM  

Google Search is broken, for important (commercial) keywords, and produces irrelevant results full of spam.
The date parameter in advanced search has not worked for a long time (at least a year). You should not trust Google!
Posted By Jim Olsson, Goteborg, Sweden : 6:17 PM  

Duh! is about all I can say. Coming from someone who has no business education whatsoever, I could have told you that Google was on a sure path to destruction when it started releasing a new tool an hour on it's website and then letting them languish there unfinished and unused.

The folks at Google suffer from the conceit that comes with being hired after multiple rounds of interviews. They feel they are the chosen ones and have nothing to learn from anyone else.

The can't see the forest for the trees.

And YouTube! Of course that was going to go to hell in a handbasket as soon as big corporations started getting involved. They RUIN EVERYTHING. It's part of their job!
Posted By Matt Klein, Bloomington, IN : 4:57 PM  

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