If you needed any confirmation that Google dominates the Search field, the latest search figures will convince you. As Forbes tells us, comScore’s February Search Query results have Google increasing its share from 67.0% in January to 67.5% in February. Microsoft edged up from 16.5% to 16.7% while Yahoo! decreased from 12.1% to 11.6%.
Even more dramatically, netmarketshare.com shows the following data for the Mobile/Tablet Search Engine Market Share in February, 2013.
Search Engine Total Market Share
Google – Global 86.77%
Yahoo – Global 5.31%
Bing 1.93%
Baidu 0.69%
Ask – Global 0.36%
AOL – Global 0.03%
These results happen of course because Google is doing a fine job in search. However with that comes enormous power in influencing whether a particular online property will appear in those search results.
When a company becomes as big and powerful as that, it raises a question on what controls should be put in place over the company. Getting bigger may not be the most useful company goal. If the company takes unilateral actions then it may well unite a strong coalition of the opposing forces. This aspect of strategy came to mind in thinking about Google’s strategy given all this current buzz about Google closing down its Google Reader service to the chagrin of many influential inhabitants of the Web.
As Michael Porter, perhaps the best known strategy guru, has said, strategy is all about saying No. That could be seen as the equivalent of what the best known management guru, Peter Drucker, said – Focus, focus, focus. However saying No is a much more hard-edged concept. Is that approach beginning to have any credence at high level in Google, particularly given the government reactions in certain jurisdictions.
Government Controls on Google
In the USA, in January of this year, Google agreed to change its business practices to resolve FTC competition concerns in the markets for devices like smart phones, games and tablets, and in online search:
Landmark agreements will give competitors access to standard-essential patents; advertisers will get more flexibility to use rival search engines. Google Inc. has agreed to change some of its business practices to resolve Federal Trade Commission concerns that those practices could stifle competition in the markets for popular devices such as smart phones, tablets and gaming consoles, as well as the market for online search advertising.
In Europe, there is a current antitrust investigation and EU regulators foresee a Google antitrust settlement by August concluding a two-year investigation into Google (GOOG). The European Commission – the EU’s executive arm – has been examining proposals put forward by Google to resolve complaints from more than a dozen companies, including Microsoft, that Google was using its market dominance to block competitors.
What is Google’s Strategy
The title of this post, How Big Is Too Big, is intended as a question about strategy. A.J. Kohn wrote that Google’s underlying strategy is pretty simple, can be set out in 7 words and is seemingly harmless: “Get people to use the Internet more.” There is no short summary from Google on its strategy but we can perhaps infer how it might be described by distilling some of the Google pronouncements over the recent past.
What Has Larry Page Been Doing Over The Last Two Years
Larry Page, one of the two founding partners of Google, took over the reins as CEO in April 2011. A New York Times article some 6 months later suggested he was working to trim a bloated ship. The situation was described as follows:
Google is not yet 15 years old, but in tech years, it is an aging giant that moves a lot slower than it did when it was a hot start-up. It is being pushed around by government regulators and competitors like Facebook, Apple and Amazon, which are all vying for people’s online time.
I’ve pushed hard to increase our velocity, improve our execution, and focus on the big bets that will make a difference in the world. Google is a large company now, but we will achieve more, and do it faster, if we approach life with the passion and soul of a start-up.
Improving execution could only come about through focus and by the spring cleaning exercises that he described in April 2012 and further in March 2013.
We have so many opportunities in front of us that without hard choices we risk doing too much and not having the impact we strive for.
In all of this the long term direction seemed to be unchanged and these efforts were all geared to achieving improved operational effectiveness. There is no suggestion that Google intends in any way to limit its natural growth in pursuing its simple mission.
The Importance Of Competition
The key determinant in whether Google should consider limiting its growth aspirations are really determined surprisingly by the competition. If other search engines provide realistic and strong alternatives to Google, then even though Google may have a majority share of the search market there is active competition to ensure it does not use its dominance against the common good. Currently the Bing search engine seems to be attracting a steadily growing portion of search queries. On this basis, Google should feel at ease with its current strategy of pursuing its natural growth.