Thursday, August 12, 2010

Догнать и перегнать Facebook!

Yesterday, after several years of using Gmail to satisfy most of my e-mailing needs, I finally clicked on one of those in-line ads that regularly run just above the Gmail toolbar. To remind you, the ads, superbly matched to customer interests and efficiently delivered at the proper time, were thought to become a money-making machine for Google. Until yesterday, the original intent worked neither for Google, nor for me. Finally, the spell broke. I don't know how much PennState University paid for the e-mail display ad, but the article linked to it was well worth reading. There, professor Hambrick described four major factors that bring about extreme risk-taking by CEOs:
1) recent [good] performance;
2) lavish media praise;
3) CEO's narcissism;
4) incentives with large upside payoffs but small downside penalties.

According to Dr.Hambrick, these factors often lead to unjustified acquisitions because CEOs think that the acquired companies will perform better under new management.

I parked this information somewhere in my brain and switched to reading Bloomberg technology news, which mentioned among other things Google's recent acquisitions: Slide, ITA Software, and etc. Google CEO Eric Schmidt justified the acquisitions by the large amount of cash the company had in its bank account and a long-term need to get into social networking.

Hmm... What's the difference between Google's old acquisitions that lead to the development of many excellent products, such as Google Maps, Google Earth, Docs, Gmail, etc., and the new ones? To me, the difference can be summarized by one word: "platform". With old acquisitions Google could fairly easy move them onto its existing, highly efficient storage-and-retrieval computing platform developed for search.
But now, Google doesn't have a consumer social networking platform to accommodate the acquisitions. Wave didn't work out, Buzz is not doing that great either. Rather than acknowledging a missed opportunity and concentrating on something more promising, Google continues imitating Nikita Khrushchev's strategy for Soviet Union circa 1957 to catch up and overtake America. Well, it didn't work out for tovarisch Khrushchev, and, I'm willing to bet, it won't work for Mr.Schmidt.

tags: 4q diagram, innovation, business, strategy, social, networking, information, platform

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