Wetpaint CEO Ben Elowitz on the Future of Digital Media
One of the great truisms of being a successful technology company is that just when you reach the top of the heap, if you sit down, you’ll slide off.
And that’s why, in a month where we’ve just seen HP disassemble itself, I have to hand it to Google: It really and truly is pulling out all the stops in order to be relevant as the social / mobile Web takes hold.
Faster than digital predecessors who have championed a technology generation and then found themselves in peril, Google seems to be reconciled to the fact that, as my Chief Operating Officer Rob Grady would say, “What got them here, won’t get them there.”
In this case, the victory of desktop search is already proving to be hollow as we approach a change in technology generations.
I’ve been reading Steven Levy’s “In The Plex” over the last couple of weeks, and what’s most remarkable to me about this love letter to Google is the genuinely revolutionary orientation and nature of the company. Indeed, Googlers are happy to set aside convention in order to reinvent.
It’s a high-risk attitude, but hopefully it can generate high rewards in a time of change.
In recent months, Google has tried to reassert its revolutionary culture and transform itself, in order to avoid the stale fate that has befallen Microsoft and so many other technology behemoths that just couldn’t flow gracefully into the future.
I’ve tried to add analytical context and dimension to this sad syndrome in three recently published articles in Fortune:
My sense is that Google must confront formidable challenges; and yet, it’s way too early to run Google down, or write it off.
Judgment Day on the desperately wanna-be social Google+ still awaits Larry Page and his executive team. And Android, Google’s mobile platform that so wants to be as cool as Apple’s iPhone, has increased its share of the smartphone market – from 17 percent to 43 percent – over the past year.
Which leads us to Google’s recent $12.5 billion acquisition of Motorola Mobility.
This deal was expensive. And visionary. And, more than anything, it reflects Google’s fierce — and creative — spirit toward its competitors.
There are arguments about whether the Motorola transaction was offensive, to help Google drastically accelerate its Android bet; or defensive, to amass patents that will enable Google to block the competition and defend its own advantages.
But, more than anything, the deal demonstrates the most remarkable gene sequence in the Google DNA: Google recognizes how things change; and it stops at nothing — even multi-billion-dollar acquisitions — so it can be a huge part of what’s new.
With smartphones overtaking PC’s, Google, a desktop search company, clearly recognizes the danger it faces, and absolutely wants to move on to the next big thing.
But the central question as Google tries to innovate for the impending five-year cycle is whether the company can see the next visible technology horizon, which extends decades out, and whether it can adapt the rest of its DNA to meet the market.
Unfortunately, I’m just not certain that Page & Co.’s vision extends that far.
But time will tell.
Since Google’s early rise, this question has consumed hordes of those watching it: Is Google a technology company or a media company? Paradoxically, Google has continuously defied the dichotomy, seeming to succeed in media precisely by maintaining that it is solely a technology company.
Can Google (GOOG) keep defying (or denying) reality?
Today’s Web is very different than yesterday. When Google was born, the basic technologies of devices, browsers, protocols, sites and apps were still in development. Now the Web is much more meaningful and mature: it links real people to the other people and things they care about in a socially connected environment. The question is, where and how does Google fit in to this new digital eco-system?
It’s important to note that Google’s world view is dominated by a utilitarian ethos, as though its product is mere software created just to provide the quickest route from point A to point B, or, in the case of search, from Q to A. For Google’s flagship, search, this made for a perfect match with an ideal user experience. It also provided a competitive advantage over other products, which forced people to enter simple questions into complicated experiences. In this way, Google became an accidental media company, answering queries with utilitarian search results and basic classified ads.
But the DNA that has made Google successful in search has made it more difficult for the company to excel in the next, more social, phase of digital media. Digital publishing isn’t a service or function; it’s all about immersing people in rich and rewarding experiences that make them want to linger and then keep coming back for more. The social Web values human connection and experience, not just functionality or speed. And that difference has led to Google’s multiple false starts — Buzz, Wave and Orkut — as well as its current attempt, Google+.
The sad truth about Google is that at its core, in culture and technology, the company’s history is one of pathetic indifference to audience experiences; instead, it’s wed to the almighty algorithm.
That’s why I chuckled a bit after reading a recent the back and forth between TechCrunch and Monday Note. First, TechCrunch reported on the $50 million raised by Flipboard — the hot iPad application that searches RSS feeds, Twitter, Facebook or Flickr and aggregates the results in a neat customized book-like layout. Why, asked TechCrunch, would an iPad application start-up need $50 million?
Well, said Flipboard CEO Mike McCue, because maybe Google will launch an attack. Monday Note responded by putting Google’s Flipboard threat in a very rational perspective. Google, explained Monday Note, doesn’t really have the creative culture or experiential mind-set to develop its own version of Flipboard. The reasons?
I agree wholeheartedly with Monday Note, which also called Flipboard “THE product any big media company or, better, any group of media companies, should have invented.”
It’s regrettable, but based on its history at least, Google doesn’t seem destined to become one of those media companies anytime soon. And the reason is that the very nature of media — building a relationship with audiences by providing them with experiences worth returning for — is that experiences need to be valued based on more than function alone.
As anyone knows from a wonderful dinner at a great restaurant, atmosphere matters. But in search, utility has been the name of the game, and Google’s success here seems to be leading it into a posture and position that is more and more protective of its home field – and more wedded than ever to its utilitarian approach. The more Google tries to support its search empire, the more it will fail in the rest of its media efforts .
On the other hand, if Google wants to succeed in a new era of personalized media, it needs to start by recognizing the human element, beyond the algorithm. It’s no coincidence that the competitors that are rapidly building market value today — like Apple (AAPL), Facebook, Twitter, and even Flipboard — are doing so with tremendous attention to the human factor. As the Web turns more social, Google needs to abandon its historical disregard for the human touch.
With Google+, it appears that Google is showing the first signs of doing so. Its Circles interface, and its approach to Hangouts, indicate that Larry Page and Vic Gundotra are beginning the change in priority. Its proposed acquisition of Motorola Mobility, which manufacturers hardware for consumers, adds another set of similar questions. But it remains to be seen whether the change will metastasize: can Google change its company’s DNA to value the human above the machine?
After all, in this increasingly social Web, the connections that Google needs to make are not between question and answer, but between people and their desires. And that has been the formula that has always worked in media.
From early on, Google seemed determined to be more than a search company. And one of the most admirable traits of Google’s structure has been its decentralization: The company’s deliberate decision to forego synergies to give product groups the freedom of independent thought and action has created tremendous product variation and innovation. Distinct product groups and a culture that prized fresh original thinking created great products like Gmail, Google Apps, and Google Maps; and all of these products delighted users even as they initially passed up the value of synergies that big companies often tout.
And yet, it seems that those at the Googleplex are increasingly giving in to the temptation to integrate new product development into a “synergistic,” if monstrous, whole. Integrating new products into existing ones, the story goes, should give a new product a boost with a built-in user base and in-product feature merchandising, not to mention enhanced “strategic” and “platform” value, which basically translates to customer lock-in.
I understand the attraction of this. And it makes sense in principle. But the trend is concerning, because it sacrifices the essence of Google’s (GOOG) greatness: its focus on the simplest possible product to meet user needs. Instead, products are increasingly being morphed into tack-on feature sets of bigger products.
But the downside here is that the influence of the core product consistently invades – even where it shouldn’t – and this overwhelms what could be a terrific new stand-alone product. As a result, great now too often becomes good at Google. And, if this new-product dilution and diminution continues, it will be increasingly difficult for the company to successfully innovate and take advantage of the burgeoning social Web.
One classic example: instead of solving a real need for all the Web’s users, Google Buzz was, as MG Siegler noted at TechCrunch, “shoved in everyone’s face by way of its somewhat unnatural home in Gmail.” My mother has taught me to put people with advanced degrees on pedestals, so I can’t help but be stunned that legions of Googly Ph.D.’s missed this by integrating Buzz into Gmail. It’s pathetic, but true: Google forgot that most connected people aren’t even on Gmail. And, obviously, the value of the network is far lower when most people aren’t on it. So, instead of being a great social product with a clear use case, Google Buzz became a controversial feature with ambiguous purpose that was added on as an appendage to Gmail.
With the launch of the Google+ Project, these questions of product integration, synergy, and installed-base leverage are more crucial than ever.
Google+ will not succeed on the back of Google’s search product alone. No matter how many users it may garner, it will turn out like the other stillborn features in Google’s search, e.g. Buzz and SearchWikis. Already, it would be easy to consider Google’s first new social product launch a success, based on the 20 million or more reported users who have signed up for it. But nearly all of those users have joined on the basis of their existing relationship with Google, rather than for the sake of any life-altering content from their friend networks.
And, while leveraging its existing business and user base in search may sound like a smart corporate strategy, the results of such migration will be limited. The battle for the social Web is being waged for a prize of exploding consumer attention online. Adding line extensions to users’ search experience will neither defend Google from Facebook’s coming attack, nor offensively capture new and emerging opportunities for Google. So, the “leverage-and-enhance-the-core-product” strategy is an easy reach to execute, and offers appealing initial momentum, but it is short-sighted.
We’ve all seen this pattern before; and I’ve lived it as part of the Microsoft (MSFT) world here in my home of Seattle for the last decade. No matter what part of the company they work in, my friends at Microsoft know their paycheck comes every week, thanks to product sales of Windows and Office. And no matter what product they work in, whether it’s set-top boxes or mobile phones, their objectives are overwhelmed by the need to sell more copies of Windows and Office. Meetings at Microsoft have become famous for having a dozen-plus attendees – all in order to maximize integration with, you guessed it, Windows and Office. Rather than being marketed independently, great products like Office Web Apps and Windows Live SkyDrive seem destined to become mere shadows of their moneymaking core brands, victims of what Matt Rosoff recently referred to as the “strategy tax.”
As Google matures, is it becoming more and more like its original nemesis? Ironically, it’s Microsoft’s focus on synergy that has left such huge room for entrants like Google and Apple to come in and dominate sectors including apps, music and devices. Microsoft’s failure syndrome was especially perplexing because it clearly had the talent and experience to build these categories better and faster – if it had been willing to obsolete itself.
If Google doesn’t give itself back the freedom to compete with the reality of the outside world, it will quickly find itself a self-imposed victim of the Microsoft Syndrome. It may ride its own large, but strategically dead-ending, business for a long time; but it could also find itself missing out on the huge next wave of the Internet — social.
The required response from Google is not just a set of adjunct products that build on search. Instead, this is exactly the time that Google needs broad, far-reaching, and decentralized creativity to solve real people’s still-latent needs via the emerging social Web. Google needs to make sure its Google+ Project is a complete stand-alone product that – like Google Apps, Google Search, Gmail, and Google Maps before it – can compete on the open Web and break new ground. Facebook has outsize traction in the social sphere, but it’s not too late for Google, as long as the company quickly takes action to avoid falling into the trap that has caught its first major rival.