Google is well known for its capabilities in advertising, search technology and web-based software. However it is weak at developing desktop-based software (its successes on the desktop, like picasa, are acquisitions). It’s interesting that sometimes, its weakness in one area affects its strength in another area. Here’s an example: google video. While trying to upload to google video, I learnt that the “uploader” software doesn’t work. It fails to login, and even when it does, it ends up spending a long time uploading, after which those files do not actually appear online. Lots of people have had problems with it. Now it may surprise you that a multi-billion dollar company cannot write software to do this simple task, and hasn’t been able to fix it despite user complaints over the past 2 years, but again this is desktop software that Google isn’t good at developing. You might ask why I wouldn’t just use a browser-based uploader? The reason: Google’s browser-based uploader is limited to small files, while its youtube service imposes a 10-minute limit, not enough for an academic lecture, in this case last week’s IPRIA Conference. Google has now decided to give up, and will soon stop offering uploads of videos altogether. It is therefore ceasing to compete in the market for longer videos, which include higher-resolution HD videos, as well as video-hosting of lecture-length. So, Google’s weakness on the desktop in this case is contributing to the failure of its strategy on the web. Me? I’m handing my money over to vimeo.
Core Economics 
I like to highlight that Google has acquired Omnisio, a site that is great for videos like lectures and presentations as they can combine slide viewing and streaming video. It seems like it would be integrated into with YouTube in the future and provide alternative viewing options. The recent annotation feature on YouTube is most likely a result of that.
I do not think that Google is planning to abandon the market for HD or larger videos but rather tries to build it into the YouTube brand. I would feel that their strategy and vision lies in developing web-based software and they are really not that focused on desktop clients. (even though I still think Google Reader will be much faster and better with one) I guess its only a matter of time when the operation for Google Video is completely removed since it does not make sense to spend resources on two similar products under its wing.
Having said that, Google has also become quite known for its incomplete products lately as much as its search engine. (eg. Google Notebook etc…)
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chrome, google’s new browser is built to be a stable _desktop_ browser that allows web based apps their own sandbox (i.e. if one desktop app fails in a ‘tab’, it doesnt bring down the whole browser). Not sure what the view is on the web but i’ve been using it and its nice/stable…To suggest with the sheer number of engineers sourced from such diverse backgrounds they ‘can’t do’ desktop to me seems a little naive. also, andorid seems to be doing OK? and thats an OS of sorts isnt it? I think its more that they under invest in desktop as they see it as non core to how they want to deliver serivces (i.e. via the ‘cloud’)…
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Simon, Marcus – thanks for your comments. Just to clarify, I’m not suggesting that google has incompetent engineers. It’s about organizational capabilities (how they’re organized, what areas google has chosen to invest its expertise in), not about individual-level skills. As an analogy, think about Lamborghini- they’re good at building F1 race cars, but not at building trucks. It turns out that writing software is difficult (e.g., read Joel on Software), so having a big group of engineers doesn’t automatically allow a firm to do all things easily. The reverse concern is often raised about Microsoft, that has done a good job on the desktop but is struggling to create appealing online sites. That’s slowly changing as they redeploy resources, but it takes time and energy to build new capabilities. As I articulated, in the case of Google Video, the thing I find fascinating is the interaction effects, ie., their weakness on the desktop hinders their strength online.
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Didn’t Adam Smith explain this around the time the USA became independent of Brittain? Quoting from the link in the previous sentence:
“Under this regime each worker becomes an expert in one isolated area of production, thus increasing his efficiency. The fact that laborers do not have to switch tasks during the day further saves time and money.”
Do you know of any companies that become effective without some degree of specialization?
Google are best at what they do. That’s hard but it is a lot easier than being best at everything.
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