Of this group, Microsoft survived, IBM has nearly recovered, and Apple actually eventually became greater than it had ever been, suggesting the pattern need not be terminal. But Sun, Netscape and likely Yahoo illustrate that it certainly can be the end of a once successful firm. Let's look back on how Google's inability to learn from the mistakes of others is setting the stage for its failure.
The Microsoft-Google-Microsoft Blog
I could have written a blog entry similar to the post describing how Google lost its way several times in my own career. It tells the very sad story of a company that started out founded on fairy dust and dreams that has suddenly had to face the twin realities of losing its focus and being rendered obsolete by Facebook. What is interesting is the writer, James Whittaker, left and then returned to Microsoft. I imagine this was because Microsoft is in a steady state, while Google is in transition and transitions, particularly when they come at the expense of cherished entitlements, are incredibly painful and demotivating.
Whittaker also tells the story of a company that has lost its way in a desperate need to be seen as successful, one that misinterpreted Steve Jobs' advice about focus and simplicity. Google is simplifying and focusing on people, which is consistent with the Jobs' counsel, but the company appears to have skipped the part about deciding what they are good at and focusing on that. Google still seems to be chasing Microsoft, Apple, or in this post, Facebook. This last elusive target has been a recurring theme and one that has contributed to the crippling of a lot of great companies.
IBM Now Is Focused
Each attempt to become another company further weakened IBM to a point where the firm almost failed. Now that IBM has shifted gears and is focusing on being the best IBM it can be, the company doesn't appear to be trying to be Google or Facebook and shares are trading higher than they have ever traded.
Microsoft Still Faces Challenges
Next, Microsoft saw AOL as a threat and created MSN but missed the Web and Netscape ambushed them. In the process, Microsoft lost focus on OEMs and users. They began to worry that Sony was planning to turn the PlayStation into a PC and built the Xbox, which further alienated OEMs and pretty much killed the PC gaming business.
Finally, Google arrived and Microsoft spent billions trying to be a better Google. But Microsoft didn't seem to get Google's core model and the once-unstoppable outsourced software model is no longer unstoppable. Microsoft continues but the OEMs that initially made the company unbeatable are now also using Google, and Microsoft has been eclipsed in cellphones and tablets.
Apple, Once Near Death, Stronger Than Ever
Apple was months away from going under when Jobs came back. He refocused the company on the consumer PC business and then, anticipating that PC growth was slowing and recognizing that catching Microsoft from behind wasn't going to work, moved into entertainment. The renewed narrow focus on consumers and excellence allowed this company to recreate itself in its own image. Apple is the only firm that actually emerged stronger than its prior peak after losing its way.
Netscape Mistakenly Blamed Microsoft
This effort to upend Microsoft has been at the core of billions of dollars in wasted spending by more companies in the last three decades than any other failed strategy and it cuts across virtually all of these vendors. What is fascinating is that when you talk to an ex-Netscape executive he will often argue they were put out of business by Microsoft, which, in a similar fight with Google, has been fairly unsuccessful. I reviewed the evidence out of the Justice Department trial, and while Microsoft clearly misacted, the company was hapless in its fight with Netscape. Each major failure tracked back to a decision made by a Netscape executive largely connected to something that had nothing to do with its Internet dominance.