Why Google Will Win Its CEO is daring, decisive—and willing to wait for his big bets to pay off.
Two words: Larry Page. In his short
tenure as CEO, the reclusive, socially
awkward cofounder has proven to
be bold, unpredictable, unapologetic, and—so far—brilliant. Page
reorganized Google’s executive
team, empowering rising stars such
as You Tube’s Salar Kamangar and
Android’s Andy Rubin. He killed 28
underperforming projects. Google+,
the search company’s answer to
Facebook, garnered tens of millions
of users in a few months’ time. Then,
he paid $12.5 billion for Motorola
Mobility, giving Google access to a
trove of patents and raising the possibility of more direct competition
with Apple. “There are basically no
companies that have good slow
decisions,” Page told customers at
Google’s Zeitgeist conference in
September. “There are only companies that have good fast decisions.”
Meanwhile, even in a tough
economy, Google’s traditional ad
business continues to produce—it’s
averaging about 30% growth this
year, even while its bets on the future, such as You Tube, look increasingly promising.
Google
powered
12. 5 billion of
19. 5 billion total searches in the U.S. in
August 2011, according to comScore.
Google’s dominant position in search is the
platform that lets it aggressively target
mobile, social, local, and other new frontiers.
12,500,000,000
world. Four billion people watch TV; in the U.S. alone, the medium generates $70 billion a year in advertising revenue. Google, Chandra promised, was going to “change the future of television.” He turned on a
prototype of Google’s new device, a set-top box called Google TV that
would bring the web to the tube—and that’s when things got awkward.
His Bluetooth remote didn’t work. Chandra and his team called for the
guys backstage, who blamed the problem on all the phone signals floating about the room. Several minutes passed while engineers fiddled
furiously with the device, the scene playing out like the worst Curb Your
Enthusiasm episode ever. Engineers fixed the problem, but like a racehorse
stumbling out of the starting gate, Google TV never recovered. Released
a few months later, the product was panned and sold quite poorly.
Each of the Fab Four believes that it can somehow define the future
of television, when that flat panel in your living room (and every other
device you own) is connected to the web, pulling in the video you want
at the moment you want it. With the universe of choice now available,
the moribund channel grid will need to be revolutionized with a fresh
interface for finding programs. Social signals—such as indications of
what shows your friends are watching and hints as to what shows you
might like given those friendships—will be part of the mix, as will live
conversations with friends watching the same show. And the advertising
will be more targeted and relevant. Each of the Fab Four wants a piece
of this. The honey pot? Not only that $70 billion in domestic ad revenue
but also $74 billion in cable-subscriber fees.
That’s the idea anyway. So far the Fab Four is the Failed Four when it
comes to TV.
There are many reasons for this, starting with the fact that they are
trying to unseat entrenched players who are fiercely protective of the
business model they’ve relied on for decades. Network execs, for example,
had no intention of handing Google the right to give Google TV customers access to the full-length shows that are currently available for streaming only on their own network websites. Not without a lot more money,
anyway, given that their online ad revenue is a fraction of their TV take.
Google approached its negotiations with the networks with arrogance,
and the networks responded by blocking access.
Then there’s the fact that none of the Fab Four want to think of itself as
being in the TV business—rather, each sees television as a means to an end.
For instance, Amazon offers free streaming movies and TV as an incentive
to join Prime, a service that offers a year’s worth of free two-day shipping
(on most purchases) for $79. Bezos has recently made deals to bolster his
video library. He paid CBS a reported $100 million to offer old Star Trek and
Cheers episodes, among other things, for 18 months. And he made a similar partnership with Fox. “We’re just getting started,” Bezos said at the
Kindle rollout event in late September. But on balance, Prime is not a way
to give the people lots of great TV; TV is a way to get people to Prime.
And creating next-generation television hardware has proved difficult.
Apple TV, a box that first and foremost connects your i Tunes video library
to your TV, has been remade several times since its 2007 debut and is still
a product for early adopters. Even Jobs and Cook have dismissed it as “a
hobby” for the company.
Still, the massive, old, and profitable business of television does
seem ripe for disruption, perhaps through the invention of some magical device. Cook had barely erased “interim” from his CEO title before
analyst and media speculation began that his first bravura move as CEO
would be an honest-to-goodness Apple-branded television set, perhaps
as early as Christmas 2012 (cue fanboy swooning). The dreamers note
that Apple could create an Internet TV that would merge web services
