What distinguishes Google from other companies is a culture that starts at the top in terms of encouraging engineers to come up with products and technologies designed to reinvent inherently inefficient processes
That's how Ken Auletta, author of "Googled:The End of the World as We Know It," summed up his analysis of Google as a company during a keynote presentation made today at the SIIA Information Industry Summit in New York City.
That may not seem like a huge amount of insight, but Auletta was quick to contrast that approach to a whole range of companies and industries that are committed to protecting inefficient processes. For example, Auletta argues that newspapers are an inefficient and expensive way to distribute information. Similarly, companies such as Apple have made it clear that compact discs were an inefficient way to distribute music.
As more companies such as Google move to disrupt inefficient processes and flawed business models, business executives are being confronted with an "unprecedented velocity of change" that continuously threatens their business. His remedy for this problem is for CEOs to give engineers they trust a seat at the senior management level in much the same way that Google founders Sergey Brin and Larry Page work hand in glove with Google CEO Eric Schmidt
But for all of Google's success, Auletta also points to major issues that could unhinge the company. For example, the company loses almost a half billion a year on YouTube. To staunch this loss, he says Google executives have come to realize that they need higher grades of commercial content that they can charge for, versus just relying on end-user-generated content. Similarly, Auletta says Google will soon start selling electronic books online in competition with Amazon. Both efforts are aimed at creating an additional revenue stream beyond advertising, which Google executives have come to see as a less reliable engine for growth during a recession. Another key factor driving Google in this direction is the fact that the growth in search engine queries is starting to flatten.
Auletta says that Google is also subject to threats such as a shift toward semantic search engines that rely more on the context of the entire document to determine relevancy and the fact that users are increasingly relying on social networks as places where they can gain trusted information without having to sort through a cumbersome sets of search results. This latter issue fueled Google's recent attempts to acquire Twitter, which thus far have been rebuffed.
Google, adds Auletta, also historically lacked the appropriate level of "emotional intelligence" to really comprehend copyright and privacy issues because, from their perspective, information wants to be free. Those issues have created a fair amount of strife for the company, but Auletta adds that the Google culture may be changing as Google confronts new economic realities in its quest to become the first $100 billion media company