2011: The year of Google

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By just about every measure, 2010 was a great year for Google -- perhaps its best ever. So I'm surprised to have read over the last 10 days or so, several commentaries and punditries asserting that Google has slowed down and is losing its competitive edge. These prognosticators of Google doom are fraking crazy. Anyone who asserts that Google has lost its mojo is simply and absolutely clueless.

Google is on a roll and showing its mojo everywhere. No tech company on the planet is iterating products and services faster than Google. Not a week goes by when Google isn't announcing something new somewhere. Perhaps some of Google's critics aren't paying close enough attention, since there are few Apple-like media events, which draw lots of attention.

There are many measures of Google's 2010 success and infuence and what they foreshadow for 2011. For example, four Google blog posts ranked among Techmeme's top-10 tech stories of the year. Next to Apple, Google overwhelmingly had the most stories on Techmeme's top-50 tech stories -- 19 and 13, respectively. Clearly somebody is paying attention, if not Google doomsayers. Google blogs had 24,768,052 unique visitors in 2010, up 70 percent year over year, according to Google. To get a real sense of just how quickly the search and information giant is iterating products everywhere, visit the Google Blog Directory.

Three attributes define Google's success and why 2011 will be second of several big years:

1. Google made several key, strategic investments years ago that are starting to bear fruit in new products and services. Android is among them.

2. The year 2010 marked a dramatic change in software/services development, with Google making iteration development priority. The company started releasing more features and new products on shorter cycles -- every six weeks for the Chrome browser.

3. Mobile is the next big thing in computing. Feature phones and smartphones offer huge opportunities for utility features and services that help people connect and communicate. Google's success with Android and Chrome mobile are foundational for making the company a major player in the market for cloud-connected devices.

Apple Investments That Paid Off

During the mid- to late-Noughties, Google made several key investments that are now starting to hugely pay off, such as the 2005 acquisitions of Android and YouTube. As significantly, Google brought to market during the economic crisis foundational products that will pay back dividends for years. The information and search giant started reaping the fruits of these investments in 2010. But it is in 2011 and the two to four years that will follow where Google can really reap the benefits. The pace of Google product development has never been faster, and it's the crucial ingredient for continued and future success.

Historically, companies that continue to invest during a recession or other economic downturn are rewarded later on. Apple is glaring, recent example. In September 2009 post "2001: An Apple Odyssey," I explained how four Apple investments were foundation for the company's current success: iTunes, Mac OS X, Apple Store and iPod -- in order of release. The recession of 2000-01 hit Apple hard, devastating its share price. Another company might have pulled back research, development and new product releases, but Apple pushed ahead.

The "2001 four" are foundational to every product success since:

  • iTunes grew into music and, later, applications stores
  • Mac OS X led to iOS that runs on iPad, iPhone and iPod, and, of course, it powers Macs
  • Apple Store provides a place to sell products and the Apple lifestyle, and anchors the company's massive marketing and distribution channels.
  • iPod established the global retail distribution channels that support iPad and iPhone -- and these devices are descendants.

That's the simplistic perspective. You can read the September 2009 post for depth. This post is about Google and not Apple. But the parallels are worth noting. In late 2008, Google released Android and Chrome, which are transforming the company into something more than search and information gathering -- like Apple's "2001 four" pushed beyond the Mac into consumer electronics and cloud services.

Google Investments That Will Pay Off

Android and Chrome aren't just huge successes, they're fundamentally changing Google. Perhaps it's this change that Google doomsayers emotionally perceive without intellectually understanding the meaning. Let's measure the success. First, Google's mobile OS. T-Mobile launched the first Android handset, the G1, in late September 2008. During 2009, global Android handset sales reached 6.8 million units, according to Gartner. Not a bad start. By December 2010, Google was activating more Android handsets in a single month (9 million) than were sold for all of 2009. Activations rose from 60,000 a day in February to 300,000 in November. Last week, Nielsen put Android smartphone OS market share ahead of iOS in the United States.

Android may be open source, but it wouldn't have gotten this far so fast without continued and aggressive investment from Google. For example, Google announced the Nexus One smartphone in early January 2010. Few bloggers and journalists seem to have groked the N1. I daren't count the number of times I read someone calling the smartphone a failure, because of the seemingly low number of sales or Google selling direct. These critics don't get it. Google released Nexus One with two clear goals, and both were achieved: To provide manufacturers a baseline reference design and to give developers an Android phone that always has the newest version available. The runaway success of Android in 2010 cannot be understated, and Nexus One lit the fire.

What about Chrome? Google released the browser's public beta in early September 2008. Two months later Google, which has a long history of keeping products in beta for years -- certified version 1.0. It was a dramatic change in Google software development. The company continued to rapidly iterate Chrome throughout 2009 and 2010, significantly outpacing Apple, Microsoft and Mozilla browser development. Chrome reached version 8 by end of last year. In July 2010, Google announced an accelerated release schedule of new Chrome versions every six weeks.

According to NetApplications, Chrome usage share rose from 2.64 percent in 2009 to 9.98 percent by early January 2011. That's less than Firefox two years after its November 2004 release, but Chrome is available in more places. Every Android phone ships with Google's WebKit browser (as does every iPhone with Apple's WebKit browser). If Android sales keep or increase pace, Google should have the largest install share of any mobile browser by end of 2011. Wild card: iPad, which first two quarters of sales are remarkably strong.

Apple defenders will squawk that Mobile Safari's usage share is higher, based on monthly data released by several ad metrics companies and also NetApplications. In December, iOS browser usage share was 1.69 percent on all devices -- iPad and iPod touch as well as iPhone, according to NetApplications. By comparison, Chrome usage share was .40 percent but with faster month-on-month growth of 29 percent. Google's mobile usage share is immaterial right now; the company is laying foundation for future. Meanwhile, Chrome is itching to break out. In November 2010, Chrome 7.0 had the second largest monthly usage share gains in NetApplications tracking history. In mid December, Google claimed there are 120 million Chrome users.

Then there is what Chrome is becoming. In early December, Google dispatched 60,000 test laptops running Chrome OS. The Linux-based operating system is planned for summer release. Amazingly, many of the same critics calling Google a floundering has-been also claim Chrome OS will fail or that Google will give up development. Well, hell, Chrome OS hasn't even launched yet. Assuming the laptops only cost Google $500 to purchase, receive and dispatch to testers, that's a $15 million investment. That sure seems like commitment to me.

Rapid Iteration makes for Quick Product Cycles

Google did something quite remarkable in 2010, building on foundations started during the era of forever betas and from process of shorter development cycles beginning in 2008: Products and services rapidly improved through iteration, and many on an accelerated schedule. As important, Google seemed to iterate everywhere at once, blogging about updated features or new products at least weekly and often much more frequently. For example, Chrome advanced from version 4 to 8 in 2010 and Google Maps for Mobile from version 3.4 to 5.0.

By just about every other measure, Google set rapid pace in 2010 that sets foundation for this year and the next few to follow. Among the many, many, many new products/services or updated ones released in 2010 (seriously, this is a short list):

  • AdMob acquisition
  • Android 2.1, 2.2, 2.3
  • Android and iPhone apps (simply too many to list)
  • Blogger Template Chooser
  • Chrome (v4.0.249 - v8.0.552)
  • Chrome Web Apps Store
  • Caffeine search engine
  • E-mail Delegation (for Gmail)
  • Gmail phone calling (US/Canada free for 2011)
  • Gmail multiple accounts in one browser
  • Google Apps Marketplace
  • Google Books
  • Google Buzz (desktop and mobile)
  • Google Earth for Android
  • Google Instant search (desktop and mobile)
  • Google Maps for Mobile (v3.4 - v5.0)
  • Google Place Search
  • Google TV
  • Google Voice (public availability)
  • Google Voice for iPhone
  • "Near Me Now" for mobile
  • Priority Inbox for Gmail (and Gmail mobile)
  • YouTube updates (simply too many to list)
  • "Where Am I?" for mobile

Why is all of this lost on the people asserting that Google has lost its mojo or simply has lost its way? Some of them can't get over calling Nexus One and Google TV failures, sure signs to them Google has lost its way. Then there is Wave, which Google retreated from; the product had little traction and was too difficult for most people to grasp. But Wave was a brilliant concept that was simply ahead of its time. If Wave doesn't come back, it surely will power other Google products or services. In some ways, Facebook Messaging is what Wave could have been minus the complexity, collaborative features and real-timeness. That Google is trying new things like Wave, Chrome OS or Google TV and so constantly and consistently releasing new features or products are signs it's still surging. Wave is sign of Google's wave of continued success.

Google doomsayers also point to Facebook's 2010 successes, which definitely shouldn't be understated. Some of them seemed to rejoice over Facebook topping Google.com as most visited website in the United States during the first 11 months of 2010, according to Hitwise. But Google properties still ranked No. 1.

For traffic, YouTube is hugely important to Google. Based on ComScore data, YouTube searches often are greater than second-ranked Yahoo. If ComScore counted these searches in monthly data, Google would hold the No. 1 and No. 2 spots some months and one and three other ones. YouTube had 2 million viewing sessions in November 2010, and the average time spent online by viewer was a gigantic 4.5 hours, according to ComScore (For comparison, second-ranked VEVO was 85.4 minutes). Hulu generated more ad impressions, but that will change in 2011, I predict. Time online is hugely important to advertisers, and Google repeatedly tweaked the YouTube ad model in 2010. Time is ripe for the advertising to match potential ad impressions; Google should get there this year.

What It All Means for 2011 and Beyond

Search and advertising may pay Googlers salaries, but all the other products and services generate information and other content that extend search, keywords and ads' reach. The big growth market is mobile, where Android and Chrome will be hugely important in 2011 and beyond. There Google is fanatically innovating and iterating with features like voice search that make finding stuff that matters to people now easier to find. During World Mobile Congress in February 2010, CEO Eric Schmidt said that Google's priority would now be mobile applications "first" before desktop apps: "Our programmers are working on things mobile first." That's certainly clear from looking at the speed of Google's mobile product/services iteration and its focus: cloud-connected devices.

Many Google critics and Apple defenders share similar flawed thinking: They assume that iOS will be the platform of choice because of applications. But the app-centric model is transitional. Businesses and consumers love apps in part for their familiarity -- what they use on PCs. Developers love mobile apps because they're generally easier to create than desktop applications and there's more money to be made (its an economies of scale thing, there being so many more mobile than PC users). But feature phones and smartphones are fundamentally different from PCs -- the devices are more personal and they're carried everywhere.

There is something like 4 percent difference between human DNA and that of chimpanzees. But, whoa, what a difference. Likewise, smartphones and PCs may be computers capable of similar tasks but they aren't the same things. Smartphones are smarter. They can locate themselves geographically (GPS and compass) and spatially orient themselves (gyroscope). They respond to human touch (capacitive screen) and interaction (accelerometer, proximity sensor). They can take voice commands and help people find their way (maps). And so on. Smartphones are multifunctional and personal, and fundamentally they're still about communications and connections: Voice or video; texting, IM and e-mail; and search for stuff nearby or what people want to buy.

The person who might spend hours in front of a PC, spends seconds or minutes at a time on a smartphone (though many more interactions). Phone behavior is more about utility but personally in ways that matter to the user. Google rival Microsoft has the right approach with Windows Phone 7: Get on and get off the device quick; bring relationships closer through built-in features or extended apps.

I'm not suggesting that mobile applications will disappear, but there must come a point when the number of them overwhelm people as they settle down to using smartphones every day, all day in spits and spurts. Do you really want to go to three or four different apps to get news or would you prefer to get it one place? That's utility. Providing what you want, where you need it. With search and other mobile facilities, Google has got utility cold. Perhaps this essay could be titled "2011: The year of mobile utility." Google has it.

In looking at Google in 2011 and beyond, five technologies will define products as the company iterates existing ones and releases others:

1. Search (including keywords and advertising)

2. Android

3. Chrome/Chrome OS

4. Messaging (e.g. Gmail, Google Talk, Google Voice)

5. Cloud sync/identity

Perhaps if Google wasn't investing so much to extend what it offers customers, the lost-mojo doomsayers might be right. But Google invested in the right places from 2005-2010, and it iterated products at breakneck pace in 2009 and 2010. Is your computer running Mac OS or Windows better this week than it was last week? Did Apple or Microsoft add new compelling features to your browser in the last six weeks? Sure, these companies are improving their products, but nothing like Google's pace. In the race to lead the next computing era -- cloud-connected devices -- speed and utility are everything. Google delivers both.

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