This is impressive. They blew through their numbers. They're showing that they can offset a slowdown in the core cash-cow via other product lines. Search revenue increase was particularly impressive.
Impressed by the diversity of revenue streams for Microsoft. Wonder how a one trick pony like Google will be able to handle this should it run into pressure from competitors in future.
It's funny really. Microsoft has lots of revenue streams despite being clueless about a lot of things (in many ways they are in lots of markets they don't truly understand). But to some degree it doesn't matter, at least for now, because they keep trying and they do learn from their mistakes.
Google, on the other hand, is extremely bizarre. They have excellent engineers and they have a ton of high-impact applications and services. But they are utterly clueless when it comes to dealing with customers, so they have yet to significantly diversify beyond their revenue models from a decade ago. Google has at least 3 separate multi-billion dollar businesses locked away within their company (in addition to search/ads) but they still don't know how to make use of them or bring them to maturity.
It's stuff like this that makes you appreciate the companies that get everything right.
Office/collaboration apps (gdocs, gmail), cloud hosting (app engine), and youtube. Google has put a lot of work into these and has monetized them to some degree but only a fraction compared to their potential.
The total revenue from everything that isn't search, motorolla, or internet backbone transport is only about 5% of gross revenue. If they were better at interfacing with customers and better at making and selling actual products that slice could easily be half the company, if not more.
Office Collaboration? Are you kidding. Gdocs is incredibly primitive compared to Office.
GMail isn't bad, but ultimately doesn't have half the features you can get for a SME on Exchange, simple things like stopping people emailing a document outside of the organisation. Very important (often a legal/contractual requirement) are simply not possible.
Cloud Hosting? Amazon and MS are out infront.
The thing they've got sewn up is YouTube, but the oddity about that is how awful the search / navigation on the site is. Like imgur they have a brand that people see embedded, I'm fairly sure people click on Reddit imgur links which they wouldn't for an un-known domain host.
But that doesn't mean a competitor can't come along and destroy them. In the rather profitable (and technically un-challenging) world of Meme Generation, we saw the incumbent cast aside this year, amongst some bad publicity. The same could easily happen to youtube.
That's precisely the point. Does google lack the technical talent to turn gdocs into an office killer or gmail into an outlook killer? Of course not. They lack the vision, the business model, and the idea that it's important.
So instead they stay cuddled up in their warm little search / ad revenue hidey hole where it's comparatively easy for them to dominate the market. While they chase facebook out of a false understanding of what the next generation of big computing corporations are going to look like. It's almost as though google, as a company, has some sort of institutionalized autism. Gdocs is a five year old project and yet it's stuck mired in mediocrity. But have you ever seen people trying to collaboratively edit a spreadsheet using sharepoint? It's a travesty.
As for youtube, they're clearly dominating the market in every way, except for the ones that matter. They don't understand the commitment it will take to turn youtube into a true competitor to HBO and netflix, not just in eyeball-hours but also in revenue generation.
Google refuses to make good on the innovations they've made (or bought) while at the same time they are incapable of trailblazing legitimately novel things. In some ways it's charitable to compare them to the bumbling, myopic Microsoft, because at least MS was capable of executing well into multiple different business areas (office, dev tools, servers, email, etc.) It's sad seeing so much talent going to waste.
Well now in all fairness this is a damned if you do and damned if you don't. Is Google to be admired for not straying too far/becoming distracted and focusing on the one thing it does really well? Or is it vulnerable because it doesn't branch out into a lot of other markets?
I dunno, they could be the first to come out with a CarOS and get government contracts (automate bus routes, trucks maybe, later individual cars). Self driving cars is right up there with EVs for future revenue sources...
