With the holidays around the corner, we decided to do a mini-series about a few of the tech stocks that we follow all year long. We are the first ones to judge and criticize how these companies are run. But as they say, it’s always much easier to criticize than actually run a company. So we decided to go ahead and write a series about what we would do with these companies.
Google: Management in the Past Few Years
It’s no secret, I am an admirer of Google (GOOG) and have even said myself that I'm in love with the company. That being said, I still have issued worries about the way things were headed, even comparing the way Google is evolving to Yahoo (YHOO) (certainly not a compliment). I generally like Google’s long term vision and the way it refuses to manage with a short-sighted vision. I have also been a critic regarding Google’s attitude toward the Chinese government, which has resulted in more or less being shut out of the most important growth opportunity.
Click to enlarge charts
Android has been the biggest success story in the past two years as it has emerged as a strong leader at the center of the smartphone world. It is not clear yet how Google will profit from Android’s incredible success but I think it’s fair to say that Google will benefit tremendously from having Android as the leading operating system and will likely be Google’s next billion-dollar business.
- Google should be at the center of the web experience, no matter where it takes place (computer, mobile, etc) and how it is done (internet, video, application, maps, etc).
- Google should be a leader in data collection, organization and be able to resell the output from that process.
Initiatives/Priorities I Would Get Started On
YouTube advertising: I think there is a golden opportunity for YouTube to launch a competition or tournament that tries to determine the best ads on the Internet. The initial goal would be to give entertainment to the users. Think about it. A large part of the audience of the Super Bowl (the largest audience for a yearly event anywhere on the world) is there to watch an event and to see interesting commercials that will then be talked about. Why not try to create another similar but “Internet only” event. Over time, this could grow and become a very profitable venture for YouTube.
Acquire Twitter: Google has been involved in discussions to buy Groupon for $6 billion. As I argued recently, I think buying Twitter for more or less the same price makes much more sense both from a commercial point of view as well as for its social strategy
Keep the attack on Microsoft: Google has been attacking Microsoft (MSFT) from almost all angles and the upcoming emergence of Chrome as an operating system is bound to be another major attack.
Launch marketing campaign about cloud computing: Google and Amazon (AMZN) would likely be the two biggest winners if businesses and personal users started moving their data and applications to cloud computing. It will likely happen, but if I were Google, I would try to get it done as quickly as possible. The marketing campaign should explain the numerous benefits for users and highlight the work that Google has been doing to further secure that data.
Monetize Google Maps: Many different things could be done to help Google get more out of its dominant maps business. First off, more visibility could be offered to local businesses that pay a premium. As well, coupons could be made available. How? A user looking for restaurants in a city like New York could see the restaurants that are around but also download coupons or deals from the map's website. Business owners would be paying to put those up in a similar way to what is now being done on search results.
Start webhosting business: Google is one of the more efficient companies at managing incredible loads of traffic. Why not start selling that expertise by letting companies host their web data on Google’s fast and secure servers?
Launch financial data service: We have discussed this in the past. Billions are spent in the financial sector for information. Google has access to a very large proportion of data that companies like Bloomberg are reselling and has other data (about users) that Bloomberg does not have access to. I think this could easily become a billion dollar business if done right. Simply start by selling the data at a very reasonable price in order to get a better idea of what users are looking for. Prices can then be increased slowly over time.
Launch wireless internet + phone/Internet service: This is an ambitious project but I think that over time, Google is a player that could get this done. Start offering high speed wireless Internet access throughout the U.S. by starting in a few locations and expanding quickly. Would it be free? No, but it would be a very attractive bundle. Example? Sign up for $49.95 per month and get Internet access and your mobile phone service (unlimited) using Android. This would help Google expand its presence both in the wireless and mobile phone space.
Health system: The health system is one of the largest areas of spending everywhere in the world, it is growing and nowhere is that more true than in the U.S. I think Google has a tremendous ability to get data and organize it in a more efficient manner. Helping users track the best insurance companies by not only tracking premiums but exactly what is covered could be a great way to tap into an emerging market.
Sell data analytics: Is there an outbreak of a specific virus? What are young teenagers looking for when they search for clothes? What are the movies that users are reading about? Google has the largest set of data and could easily repackage a lot of it in order to be sold. An example? Political candidates could certainly benefit from gaining information about what their constituents are looking for, what they are worried about, etc.
Work on government contracts regarding data and apps: Google has spent a lot of time working on comparable products to what Microsoft has been offering for over a decade. It’s now time to start getting some contracts from governments and from large corporations that will benefit both the consumer (cheaper and more efficient alternative) and Google (recurring income).
Increase lobbying spending: No matter what you think, Google’s dominant presence in all kinds of different markets is creating enemies that will likely be using different monopoly laws to try to slow down the search giant. I would continue to work on getting “support” from the government.