Oct 18

Is Google Failing to Innovate?

Posted in: General, Today's Chili

This article was written on March 11, 2008 by CyberNet.

innovation Yesterday we watched as Google Stock hit a new 52 week low of $413.04. It was just on February 8th when they closed below $500 and now they’re coming way too close to that below $400 mark. Luckily for Google, the European Union just approved the buyout of DoubleClick (the U.S. already gave their stamp of approval) and Google stock was headed back up this morning on that news. We looked at some of Google’s competitors and it looks like some of them also had a rough day yesterday, but it got us thinking about Google and if they’re failing to innovate and thus failing to impress investors?

From many angles it looks as though Google is all about innovation. They look for great ideas all over the World and acquire them when found. They give employees about one day a week to develop their own project which screams innovation. And speaking of employees, they’re able to attract some of the best of the best out there. There’s no doubt that they’ve got loads of talent. Up until recently, the effort that they have made to be innovative has helped them push their way over the $700 dollar mark per share. Investors were impressed and jumped on the Google-wagon.

So what has happened over the last few months? There are multiple opinions on this one with some saying that it’s simply the economy while others say that every stock has its ups and downs and this is just one of those down times for Google. One idea to consider though is that Google simply isn’t doing enough new innovation to impress the investors and keep them pumping money into Google.

Recently I stumbled upon a list over at Google titled “Ten things Google has found to be true.” There were two things on the list that really stood out:

  • It’s best do do one thing really, really well (#2)
  • Great just isn’t good enough (#10)

They say that their one thing is search, and it is. They’re great with search, there’s no doubt about that. So then why is it that they’re branching off and trying too many different things that end up being just okay and not great? They also say great just isn’t good enough and that they need to always deliver more than expected. “Through innovation and iteration, Google takes something that works well and improves upon it in unexpected ways.” As of late, they really haven’t delivered more than expected.

Whether Google stock is dropping because of the economy or it’s dropping because investors haven’t seen enough innovation, one thing is for sure and that is that Google stock owners are probably getting a little nervous as this point! And if you don’t own Google stock, hey, now might not be a bad time to buy.

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