Real Google Story Drowned out by YouTube Rumors

Sure, today comes the rumor that Google is in talks to buy YouTube for $1.6bn (about $53 per YouTube user).  This managed to create 375+ news articles in a couple hours.  See details on Google’s own News site:
http://news.google.com/news?hl=en&ned=us&q=google+youtube

But the more important story, certainly to Google’s future, came in the LA Times this morning “Google Puts Lid on New Products”.  This is where the real action is.

The gist is that Google is slowing down introduction of its new web products in order to re-allocate resources to make its existing products better integrated with each other and hopefully more useable.  Like a lot of tech companies, Google innovates and product-develops like crazy – but they are challenged at creating long-term users of these products who can become profitable for them.  Google search, which we all know, is the cash cow financing all these other products.  Will any of them ever take over a significant chunk of Google’s revenue, thus diversifying the company and making it both stronger and more sticky?

See a bunch of these 50+ web services and software products here:  http://www.google.com/intl/en/options/ and even rougher ones here:  http://labs.google.com/  Go ahead, try them out.  I’ll wait.  Really, they’re pretty cool.

Having been employed in a tech-heavy Internet company, I can attest to the brilliant power of Google to suck up all the smartest engineers and programmers with the giant carrot of the chance to develop super-cool applications with almost unlimited resources.  They assume that any new, cool product will naturally draw users to it and create revenue.

But as a business-person, I’ve wondered when Google will actually take advantage of their smart programmers, mix them with some kick-ass marketing people, and actually make products people know about, and will use?

I’ve tried Gmail and Google Earth and Google Glossary, etc, but I haven’t changed my behavior to use them every day.  Part of the problem for consumers is even finding out that they exist!  There are a lot of techies out there who play with this stuff, but the real revenues come when the majority of Internet users realize that a new feature solves their problem and start coming back again and again.

Yahoo has been better at integrating their products seamlessly for the user, but they are always a step behind Google in raw innovation.  Yet it’s Yahoo that I continue to return to.  MSN is just too complicated and cumbersome.

Google sits on a goldmine of new products and useful applications – I wish they would allocate some resources towards telling us about them — and give us good reasons and easy methods to use them regularly. 

Google needs to play a more grown-up marketing game (pharamceuticals is a good example) of cultivating opinion leaders, gurus, super users, etc. and then following that up with marketing to consumers to really build momentum in their products.  Only then will they have a sustainable powerhouse built for the long term.  If they get that right, it will dwarf the headline-grabbing YouTube purchase.

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