Google is still what, 89% ad revenue? The issue that I’ve had and still have is Google presenting a compelling vision of a very different future Google and IMO they haven’t done that.
Waymo is the only other bet that has had considerable success. Google Fiber has been curtailed, Verily has had expectations lowered, Nest is clearly not doing as well as hoped, etc. In terms of a world of Alexas where people are using their voice to get answers…where does Google stand in that? What does the ad business look like in a world where an increasing amount of search that used to be done on a screen is done w/voice? Amazon’s ad business has been accelerating, too.
Youtube is certainly a compelling asset, but Google has not done a particularly compelling job monetizing it – Youtube Red’s original content is sort of sub-CW stuff and I think they’re going to continue to have a difficult time getting people to pay after they’ve spent so many years not. They’ve made good phones, but neither the Pixel or Nexus phones ever took off. They have to push Waymo and push it hard; they can’t have a phone-like result where the people who use it really like it but they didn’t push it hard enough en masse. I mean, I think it would be interesting if you went on the streets of NYC and asked people if they were even aware of the existence of the line of pixel phones and how many would say yes.
While the recent concern over Facebook has passed, I think companies were data is the focus have to be careful in terms of not bringing attention to themselves via similar scandals going forward. So – bad company? No, not at all – I just think that Google will have to diversify in the years ahead away from the focus on advertising and that the Google of 5-10 years from now is going to have to look materially different than the Google of today. People were upset about the spending last quarter, I think they have to.
The opportunity was the decline after the last quarter, which I don’t think was warranted. But I do remain more skeptical and would like to see “other bets” fare better; you have a company that went towards the Berkshire conglomerate structure with Alphabet, then the only other bet that has been of real note has been Waymo. Google Fiber being curtailed was a real disappointment, given how significant the demand is for other players in internet providers.
The other thing that is somewhat minor but interests me in terms of Google is travel – IMO there is an opportunity there. There is certainly opportunity in AI as you saw the other day. Again, I just think that the focus IMO has to be diversifying – they have to move beyond the massive focus on ad revenue.