Tuesday, December 02, 2008

WSJ: downturn finally hits The Goog

"Google's years of rapid growth were fueled almost entirely by a single business: sales of search ads, the small text ads that appear next to search results cranked out by its Internet search engine. The company realized that the torrid growth couldn't continue forever. So far, it hasn't come up with any big new revenue streams.

"Letting a thousand flowers bloom and letting many of them stall and go nowhere has worked well to this point," says Thomas Eisenmann, a professor at Harvard Business School. "But if you want to be the dominant advertising network across every medium, you need more top-down management."

Google executives say they started preparing for slower growth more than a year ago. But the economic crisis is forcing them to step up their efforts.

In recent weeks, Mr. Schmidt has held meetings with top executives to determine where to focus investment more narrowly. Top priorities include display ads, which use graphics and appear on Web pages; advertising on mobile phones; and the company's online business software."

No comments: