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Analysts: Google spreading itself too thin

Analysts: Google spreading itself too thin

Google's biggest enemy may be itself

In addition, Google has a separate unit called Enterprise which provides products for businesses like the high profile Search Appliance enterprise search device and the Google Apps suite of hosted collaboration and communication applications.

Google also has a long and ever-increasing list of APIs (application programming interfaces) for many of its consumer and enterprise services. The thousands of external developers who use them are very demanding and always looking for improvements in these programming tools.

Of course, Google also serves its very important search advertising customers, which it has historically supported via automated, self-service online systems. But Google wants to increase its brand advertising, and this requires more personal attention for big name advertisers. Google also has initiatives for offline advertising, like radio, TV, print publications and billboards.

Cutting across all these areas are mobile initiatives, including the ambitious Android mobile platform, to bring Google's services and ads to mobile phones.

Whether each of these endeavors is worthwhile to pursue is up for debate on a case-by-case basis, but the number of areas in which Google plays is staggering, even for a company with almost 20,000 employees.

"Google is so distracted by the number of things they're trying to do that they're not focused on assuring the quality of any of them. The end result is they're building a foundation for failure," Enderle said.

Google wouldn't be the first large company to get sidetracked by too many side projects -- it has happened to vendors like Microsoft and Intel in the past, Enderle said.

"It's a common mistake: trying to do too many things at once and forgetting what your core business is," he said.

Also of concern is that for all its hyperactivity in launching new services and projects, Google has delivered some real stinkers and missed the boat entirely on important trends, said industry analyst Greg Sterling from Sterling Market Intelligence.

For example, Google Video was a disappointment and the company wound up spending US$1.65 billion to buy YouTube, the startup that rose quickly to lead the video sharing market, he said.

Google also failed to capitalize on the growth of social networking, devoting little attention to Orkut while MySpace, Facebook and others grew rapidly, Sterling noted.

Other products arrive with much fanfare and end up being underwhelming, like the combination of Checkout and Google Base, which together pundits predicted could have become an e-commerce threat to eBay, something that never happened.

Other services are acquired and then languish in obscurity for long periods, some never to be seen again.

"Google doesn't do everything well. They're not infallible. Some products are hits, others are misses," Sterling said. "The company is doing a lot of things to branch out defensively and offensively, but it's definitely not the company it was two years ago. It's become a big entity, more bureaucratic."

It thus remains to be seen whether 10 years from now Google will still be at the top of the search heap while maintaining a bulky menu of side projects.

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