Google's Tarnished Chrome: The Making of a Disaster


Often, when watching companies full of kids who were hired right out of school, I wonder how many of them actually earned their grades and how many simply gamed the system by downloading papers written by others, or buying test answers. This is because it often looks like these new employees feel that this same kind of effort will make them successful in business and that they don't really have to do any real work.


Google's Chrome OS appears to be a case in point. Google itself is looking like an unfocused shell of a company yearning to follow the lead of larger firms that had the focus of mayflies. These firms were run by executives more interested in looking like they were doing meaningful things than in actually getting them done. Google increasingly is looking like a company that has too many ideas and too little focus. Let's look at Google's Chrome OS from three aspects: strategy, promotion and focus/execution.


Strategy: Microsoft's Vulnerability


It appears easy to me to maintain a monopoly. All you have to do is keep your customers moderately happy and maintain a very high switching cost to any competing offering. Apple is a perfect example of how to do this. It avoids really angering its customers, spends lots of time reminding customers how smart buying Apple is, and its migrations from old product to new product are, while not perfect, some of the most trouble-free in the market. As a hardware company, it also knows that its OS is mostly a razor to its hardware and applications blades. It prices for volume and focuses on moving people from version to version aggressively, which is what helps fuel, at least for this decade, market leading margins and growth.


Microsoft hasn't done that with Windows. It appears not to get the whole "razor/blade" thing, and has been overcharging for and over-building Windows. It's also been underfunding IE for an extended period of time. This too has contributed significantly to Apple's growth and IE's dramatic market share decline. Both Apple and Microsoft are held to an installed base of customers, partners and products that makes it difficult for them to embrace the future. Finally, the PC OEMs, Microsoft's critical partner base, are upset with Microsoft and desperately want a second choice. On paper, Google's offering looks tightly targeted at this substantial opportunity and, if Google could execute, we would likely be looking at a market share exchange unlike anything we've ever seen in technology. But "if" is a big word and incredibly important here.




We are creatures of habit. Once we lock into a product, we don't want to move. That is both what kept Apple alive in the terrible '90s and kept it from gaining even more share this decade. It's why we still have obsolete fax machines, and why our keyboards are based on a design over 100 years old, whose primary purpose it to keep keys on a typewriter from getting tangled. We just don't particularly like change. This is why marketing becomes so important. Without it, people stay with whatever they are using, and that can be problematic when moving into a market like the PC market that is dominated by one product and one vendor.


Google is like a company that sells food but doesn't like to cook it. While it owns much of the advertising revenue stream, it simply doesn't know how to market. If it did, it would have realized that Microsoft's Bing is as much a marketing attack as it is a product attack, and that its best short-term defense would have been marketing focused. Like a lot of engineering companies, Google apparently thinks if it builds it, customers will come. Microsoft made similar mistakes with Plays for Sure, and AutoPC. Without marketing, no matter how good the product is, it will only get a very small percentage of the available market.


Lacking Focus/Under Executing


Google has projects on smart grid, public cloud computing, cell phones, desktop productivity applications, e-mail, telephony, mapping and library Indexing. It even builds a lot of its own hardware. It seems to have a CEO who is more interested in things that have nothing to do with actually runnng the company, and it is currently bleeding market share in its core search business. This is a textbook focus problem, and I agree with Judy Shapiro that huge companies like AT&T and Chrysler have been crippled by behavior like this.


When Microsoft took on IBM, it was focused like a laser on what was then its core business. Any company of any size can be destroyed by a lack of focus, but it is particularly problematic if it's challenging a larger vendor on that vendor's home turf. Netscape learned this the hard way. It appears Google is heading down the same path. If Google can't focus, the Chrome OS will be less of an attack on Microsoft than it is a nail in Google's own coffin. Like Japan did with Pearl Harbor, Google is waking up the sleeping giant. If Google doesn't get its act together quickly, this won't end any better.


Wrapping Up


Google has caught Microsoft napping in this new battleground but now that it has awakened the Redmond Giant to the threat, it has to execute sharply or this Giant and other competitors will feast on its dying carcass. It isn't looking good. Google appears unfocused, uncoordinated, it has no apparent marketing or PR skills, and it will likely be over a year before the finished product can even enter the market. All this time it will probably be bleeding search market share as Microsoft and others take advantage of Google's lack of focus and Microsoft prepares its second strike response.


I continue to see this related to an education system that seems to teach that going through the motions is the same thing as accomplishing the task, and the historic problem of managers being better at setting expectations than they are at setting appropriate goals and achieving them. There is a way to do this right. Google is not currently on that path.