Kent Newsome's blog entry here made a lot of sense when I read it. Google has made a killing with Internet search and should be able to maintain that business momentum for many years to come. But with recent product releases not hitting pay dirt -- yet -- like its search business, what is Google to do to ensure it can keep growing? As I've written before, Google, while incredibly successful, still needs to expand beyond one revenue source to ensure long-term success and make sure that investors don't have to face future surprises in its business model and revenue.
Diversification is a sound strategy in any business, regardless of present success. Not that Google is anything but a success now. Its products, which I use above all the competition, are fantastic. But the fact that these products are free, but are all supported by a single revenue source, concerns me going forward.
With that said, Google has made large recent strides to partner with established and traditional media to weave its way into more advertising revenue beyond pure Internet search. This is a good diversification strategy -- advertising revenue is Google's boon right now, and I've said many times before that I think Google's aim is to become the world's largest advertising network. But I do agree with Kent on one slightly-important thing here -- when ad partners (large ones) see the loot Google is bringing in, will these companies want to keep some (or most) of it for themselves? Why, without Google's reach, these companies may not even have an advertising business in many ways -- but that won't stop greed.
Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.











Reader Comments (Page 1 of 1)
8-16-2006 @ 12:04PM
Andy said...
The joint venture approach that Google is using is brilliant. Google has reduced its successful advertising strategy to a formula that can be repeated over and over by partnering with successful companies. It is almost immediately profitable for both companies, low risk,is not capital intensive and can applied to an ever expanding group of companies.