Google's next big score
There's nothing to suggest that Google's current growth engine - ad-supported search - is in trouble. But it's clear that the company is searching for ways to grow beyond that well-run core. (See Chaos by design, from the Oct. 2 issue of Fortune.)

Depending on how you count, Google has released at least 83 full-fledged and test-stage products, but none has altered the Web landscape the way Google.com did.

Will Google come through with another big win to justify its $400 stock price? Or will the search phenom prove to be a one-hit wonder?
Posted by Deirdre Terry 11:43 AM 16 Comments comment | Add a Comment

For a company that is so famously secretive, it's pretty funny how the Google execs are always ready for the camera whenever a business magazine comes knocking.
Posted By scott, san francisco CA : 1:47 PM  

To claim that Google "got lucky" is extremely obtuse.
Posted By Alex, Park City UT : 2:18 PM  

I think that Google has great future. I see the same patern in their management style as in companies run by Warren Buffet. Give people a chance to be succesfull, leave them alone, and enjoy.
Posted By Dmitriy, Fair Lawn NJ : 2:46 PM  

Circular reasoning: Does Google have a second magnificent 'act' since the market has priced the stock at twice it's fundamental value. Maybe we should just enjoy the anticipation like we do a rollercoaster about to go over the top. The sell side guys do this again and again - Snapple at 40, Netscape at 75, Amazon at 113, etc, etc. The mutual funds love these little darlings, too. It helps them sell funds and, what the heck, it's not their money. The bonus is theirs and they never have to return that no matter what the truth is. Google sells at 15 times sales. Does someone think it will be easy to pull some new thing out that will be as powerful as search has been for them? They have a lead in search but no big moat. As search matures, it may support a market cap less than 15 times sales . If it heads down toward supporting 7.5 times sales then the new big thing must support 7.5 times sales, also, just to maintain the current valuation. How likely is that? The stock will be in the 200 range within 6 months.
Posted By Rick, Plainsboro, NJ : 3:51 PM  

Google ahould aquire yahoo for IM or more likely Mirabilis (the makers of ICQ..one of the original online chat/collaboration tools). I see Google being about tools..you put solid hard working tools into the hands of people and they will use them everytime. Google is looking for the best talents out there...This is a smart approach in my book. Even if they play the odds, they will find the next big thing first.
Posted By T L, Columbia, TN : 4:33 PM  

Google will falter sooner than later..quality of their searches has dropped due to changes in search their algorithms that no longer help consumers like they used to.

They are more focused on driving traffic and ads that contribute to their bottom line (bad..should have stayed private) rather than quality.

Furthermore, competition is heating up and it will only get tougher for them to compete due to lack of diversification.

When economic cycles get tighter they will be adversely affected since ad spending will significantly slow down.
Posted By Raj, San Jose, CA : 4:35 PM  

Ignoring google's successes, calling other
successes "lucky", while asking
all the wrong (or unfair) questions
like is google video or just-release
spreadsheets catching up to
the competition nearly instantly,
that's what "arrogance" is. Look
in the mirror, Adam. And lighten up..
Posted By Lerah, Ithaca, NY : 4:58 PM  

I find it hard to think that innovation will come from a company that basically took someone else's idea and made it their lead horse.
Posted By Justin, Redwood City, CA : 5:59 PM  

Although Google had an exceptional stock take off from their IPO. Most new search engines tend to come in with a bang and wither away. Unless those lax individuals at the top of google have some excellent ideas brewing. I would assume google's stock value to slowly decrease over the coming years.
Posted By Alex Kalamazoo, MI : 8:26 PM  

Clearly, if Google does have a second act, it won't be in the near future to enhance share price. Omid Kordestani, the revenue engineer for Google, sold all or nearly all of his stock - a simple little tidbit which hasn't received any attention.
Posted By William Fox, Phoenix Arizona : 11:06 PM  

Google is one of the greatest media companies of our time. Clearly, a company that inserted itself into the top internet search engine spot against competition from Microsoft, Yahoo, and ASK Jeeves has something to be proud of. In that same respect, it would be completely foolish to count Google out this early in the game.
Posted By Mark, Kearney NE : 11:09 PM  

I am a lone software developer (and MBA from NYU) who has designed what has become something of a hit product. I designed the program with an impressive feature list. The program took about four years of development.

I have analyzed many and indeed integrated at least one product (Google Earth) into my software.

My general take is that Google is as the author says, throwing stuff against the wall and seeing if it sticks. There are many puzzling gaps in Google's software offerings.

I'll give you one recent example. I received an email from Google about their new payment system.

Verisign has been doing this for years and has a simple and effective e-commerce solution (i.e. Payflow) that allows Verisign to do an HTTP POST to a web server to complete a transaction.

Does Google have this obvious and simple transaction mechanism? Nope. What they do have is an elaborate XML format that would be quite a learning curve for most developers to implement.

I also find Google's use of the term "beta" to be extremely annoying and pretentious. A piece of software should be in "beta" only for a short period of time if at all. Google's use of the term "beta" for years is contrary to industry practice.

Google's laid back attitude about finishing up products and honing their feature sets relentlessly is catching up with them as people tend to drop using their software after a little bit of experimentation.
Posted By Bob, Massapequa, New York : 11:51 PM  

Google will move from the den (where the PC is) to the living room (where the TV is). That's a major leap with major growth potential.
Posted By Bill Smith, Cupertino, CA : 9:18 AM  

The underlying assumption in this article is that Google execs spend their time trying to come up with ways to improve the bottom line. That may be true for some of them, but from the few in-depth features I read on the two founders, their main focus is not amassing $'s. It's INNOVATION. Hence the bevy of products the company releases, whether or not they'll make money (some, like Google News, don't even have a monetization method, as far as I can tell, b/c they have no adds). It does sound distressing for investors, but it's the founders' game, and they're in the driving seat. Don't snigger at "Don't be evil" - it may be the very reason for their "failure" to have a second act: they're trying to create useful tools for humanity, more than they're trying to cash in on them. How very non-corporate of them! :-)
Posted By Nancy, Phoenix AZ : 11:00 AM  

Google's second act will involve a suite of free ad-supported web applications for everyday use. The recent partnership with Intuit (the maker's of Quicken) prove that they are moving in this direction. The launch of Google Spreadsheets and the acquision of Writely word processor also shows this. They will help lead the way to making desktop applications obsolete.
Posted By Steve, Knoxville TN : 12:08 PM  

The reason I initially loved Google was because of it's simplicity. I love how sleek the homepage looks.

I use Google Desktop, Google Earth, and Gmail.

However, for search their results aren't any better than Yahoo! I only use Desktop and Earth, because they are free. Gmail? I do really like it.

I think though, that with the purchase of YouTube, they are either well on their way to becoming the next Yahoo (which does too much for its own good), or I see it as the first step towards becoming not the World leader in search, but the world leader in advertising...

Here's one interesting question though? Why is Sergey Brin selling nearly $160 million worth of stock every month (see insider trades on finance.yahoo.com).
Posted By Cam - Houston, TX : 7:26 PM  

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.