Fortune Magazine recently published an article entitled “Has Google’s Android Peaked?” The subject emerged because, for the first time, there is a slowing of Android’s net user gain.
The Android O.S. is a strange product for Google. First of all, it is free; Google’s hope is that is generates web traffic and ads. Second, it is open source, so the code is in the public domain and vendors can and do modify it for their products. Hence, there are many versions (e.g., one for pre-paid phones, one for the high-end Samsung Galaxy phones, etc.). Unfortunately, if you are a developer of smartphone apps, developing for the Android is complicated. You need many versions of your app, due to the different versions of Android. Hence, some developers ignore Android (causing Android to have few apps than iPhone). Net, Android is a messy business proposition.
This isn’t the only case where Google ends up with a fuzzy business model. People are still wondering how Google will make sense of the acquisition of Motorola Mobility. Also, there is gmail, Google’s broadly used, free email system; it’s not at all clear how this fits in from a business perspective. Additionally, Google is trying to compete with Facebook with their product called Google+, and it is not clear what they uniquely offer.
While Google can claim that all of this leads to traffic and opportunities for advertising, the stock market is not enthusiastic. For example, Google peaked in the fall of 2007 when its stock price reached $700 per share. Since then it has bounced around in the $550-$650 range and currently sits at the low end of that range. That 4 ½ year period of no growth has investors scratching their head in regard to the future of Google.
So what’s the learning here? Focusing on THE next big area of opportunity (not four or so of them), and making sure that it will have a significant profit and customer impact, is what gutsy leaders do. Unfortunately, getting lulled into managing a whole bunch of different things, each with fuzzy potential, is the trap that business leaders often fall into, especially successful ones!