Kinks in the Google Plan for World Domination

Katherine Mangu-Ward | May 18, 2009

After the brief outage of several Google products last week (which felt like an eternity to those of us who are otherwise happy citizens of the googleverse) people are re-examining their anti-trust arguments against the search-engine-to-end-all-search-engines—or they should be. The cries of unfair play have increased in volume recently as Google has expanded into video, email, word processing, etc., and the newly-minted trustbusters of the Obama Administration are getting antsy.

The Technology Liberation Front's Cord Blomquist has a good Monday morning (well, Monday afternoon) analysis of the great googlefail of 2009, and why even big, powerful players aren't invulnerable:

Google’s failures aren’t the result of failings specific to Google, but rather evidence that companies that become excellent in one field aren’t necessarily capable of achieving excellence in another.  Rewiring even a portion of a multi-billion dollar company to provide a totally new product is a near impossible task.  The incentive structures, hiring practices, corporate culture and myriad other factors necessary to be world-class in one endeavor may be very different for another.  In short, market advantage is not much of an advantage in today’s economy, but instead can prove to be an incredible hindrance to expanding into new markets.

This is especially true in the tech industry where barriers to entry are low, investor eagerness is high, and new competitive spaces are opening constantly.  This is why big players emerge so quickly—like Google—and fade so fast.  Think AOL, AltaVista, Compuserve, etc.

So, rather than focus on how to punish big players in a given market, the Obama administration should focus on how to free up capital markets to allow money to flow to the best technologies so that competition remains vibrant....

If any additional evidence is needed that big firms don’t always stay big and can even fail, members of the administration need only visit Google News…if it’s up.

More on Google and anti-trust here.