Business Software

On2 Purchase Spreads Google Even Thinner

What does Google do? Most people would say it's a search company. After all, that is where the company built its brand. That is how "google" became a household word. But now there's Gmail, Google Docs, YouTube, and Google Voice, the Chrome Web browser, the Android mobile operating system, the recently announced Chrome operating system, and more. In its effort to take on dominant market players in virtually every area of online technology, Google is perhaps biting off more than it can chew.

Google purchased On2 Technologies this week for $106.5 million. On2 is an established company known for building video compression technologies, sparking speculation about how Google intends to use the new acquisition. That sets them up to perhaps streamline Youtube and make it a profitable venture to square off against competitors like Hulu.

That brings me back to ‘What does Google do?’ The answer to the question continues to get foggier over time. One problem is the pressure from Wall Street. Reporting quarterly revenue that is the same as last quarter, or the same year over year as the quarter the year before, is ‘bad’ news and doesn’t excite investors.

But, what is wrong with stable? It should be OK to build a successful company that establishes itself as a dominant brand in its core market. If the company can pay its bills and pay its employees and provide a reasonable income for hundreds or thousands of families, shouldn't be sufficient? The push to impress Wall Street leads to laid-off workers to make the bottom line look better. The race to be bigger, faster, and more profitable leads to risky ventures and taking your eye off the ball in your core market.

I am not suggesting stagnation. To remain dominant, or even remain in existence, companies have to innovate and they have to keep an eye on the competition and continue to provide value for customers. But, that doesn’t mean branching into every other form of technology and tilting at windmills in markets where there is already a dominant leader and established rivalries.

Google is great at being a search engine. It is no small feat to have your company name become an accepted verb. Nobody says they’re going to go ‘Yahoo’ some information. I am not sure if there is some sort Don Quixote / Napoleon complex going on at Google, or if it’s the pressure from Wall Street to always show growth, but as Google tries to be the next ‘Google’ in every other market that exists, it may watch Microsoft Bing become the next ‘Google’ in its core business.

Tony Bradley is an information security and unified communications expert with more than a decade of enterprise IT experience. He provides tips, advice and reviews on information security and unified communications technologies on his site at tonybradley.com.

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