The Wall Street Journal has a pretty negative article on Google’s innovation programs and cost cutting efforts. (Thanks to Prasad for finding this and highlighting it via his Twitter account.) Here is why Google’s innovation efforts matter to me as a venture capitalist - investors and technology entrepreneurs have a fear of Google. In meetings I often hear, “why can’t Google just do this with their engineers’ spare time?” or “why can’t Google come up with something like this and crush you with their distribution?”
From the article:
…with the U.S. economy in a recession, Google is ratcheting back spending and cutting new projects. “We have to behave as though we don’t know” what’s going to happen, says Google Chief Executive Eric Schmidt. The company will curtail the “dark matter,” he says, projects that “haven’t really caught on” and “aren’t really that exciting.” He says the company is “not going to give” an engineer 20 people to work with on certain experimental projects anymore. “When the cycle comes back,” he says, “we will be able to fund his brilliant vision.”
The thought among VCs was that, with millions and millions of people viewing the Google search page each day, Google could easily launch and test all sorts of crazy new services, like Google Checkout or Google Finance or Google Base or Gmail. Some of these have really taken off, and with the early(ish) success of Gmail VCs were quaking in our collective boots that Google could easily leverage its distribution power into huge market share for any new product its engineers dreamed of creating.
But maybe Google’s distribtion heft isn’t enough?
Anyways, this was more of a long tweet than a real blog post. There is no real conclusion here, just a thought I wanted to throw out there.
