Is this what a "focused" Google looks like?July 3, 2012: 5:00 AM ET
Larry Page promised to slim down the company's portfolio of far-flung projects. He did. But now it seems like the company may be losing it focus again.
By Verne Kopytoff, contributor
FORTUNE -- Last year, Larry Page, Google's chief executive, responded to criticism that his company had lost focus by promising to put "more wood behind fewer arrows." Translation: Google would cull its bloated list of products so that engineers could attend to bigger priorities.
To show that he was serious about focus, Page killed off Google Health, an online locker for digital health records, and PowerMeter, a little known service for tracking home utility consumption.
But staying focused is hard to do, as Google (GOOG) showed last week when it introduced a series of new products including a tablet computer, a home entertainment hub and a corporate computing service. As if that was not enough, Google previewed futuristic Internet-enabled eye glasses that are supposed to make smartphones obsolete. "Google is focused. On everything," Aaron Levie, chief executive of Box, an online file storage service, joked in a post on Twitter.
Questions about Google's focus echo across Silicon Valley, where Apple's (AAPL) keep-it-simple business strategy is often lauded as the ideal. A limited number of products make it easier to sweat the details that make a computer, tablet or smartphone better than a rival's -- or so Apple's philosophy goes.
For most of its history, Google's strategy has been likened to throwing spaghetti on a wall to see what sticks. For years, it seemed like engineers could get any pet project approved for a splashy public premiere.
Dozens of services vie for attention alongside Google's core search and online advertising business. Remembering all of the products is nearly impossible, even for someone who follows the company closely. Sometimes, it seems like Google's services are forgotten internally as well given how long some of them go without being updated.
To be sure, the company has occasionally killed duds or those that fell out of favor. But since Page returned to the role of chief executive last year, the pace of executions has seemed to be on an upswing. In addition to Google Health and PowerMeter, he eliminated Slide, an online slideshow; Buzz, a social networking service; and Labs, a test bed for some of the company's not-quite-ready for primetime products. Knol, a Wikipedia clone, is scheduled to be shut down in October.
Google declined to comment. But in a series of blog posts since last year, its executives have repeatedly mentioned focus as the rationale behind closing more than 30 products or features, and redirecting resources to others that can create a higher impact. "We aspire to build great products that really change people's lives, products they use two or three times a day," said Bradley Horowitz, vice president of product for Google's social network, Google +. "To succeed you need real focus and thought—thought about what you work on and, just as important, what you don't work on."
In another effort to bring more focus, Page reorganized the company into seven groups shortly after retaking the chief executive role last year. Now top leaders oversee specific areas -- advertising, social networking, Android, Chrome, YouTube, and local mobile commerce -- instead of broad portfolios that diluted accountability and slowed decision-making.
Still, Mr. Levie, from Box, said in an interview that Google will have a hard time competing against companies focused on just a few things. He pointed to online file storage, which his company has focused on exclusively for seven years. Google introduced a competing product three months ago. Can corporate customers really be confident about Google's commitment to the space and its willingness to innovate when it has dozens of other competing initiatives, he asked?
In the end, Mr. Levie said that Google's "more wood behind fewer arrows" strategy has become "more wood and more arrows."
Mr. Levie applauded Google for its experimentation with gee-whiz technology like Google Glass, which brings the Internet to people wearing eyeglasses via their lenses. Such products help inspire innovation industry-wide, regardless of whether Google's glasses ultimately succeed after they go on sale to consumers, perhaps in 2014 (developers, however, can get them next year).
Colin Sebastian, an analyst with Robert W Baird & Co., was more supportive of Google's expanding product portfolio. Yes, Google has a lot on its plate, he said. But "competing on the Internet requires constant change."
For Google, that means placing a big bet on its new Nexus 7 tablet and Nexus Q home entertainment hub along with its latest phone, the Nexus Galaxy. It's not Google's first time selling hardware. But it is its most ambitious. In the end, selling hardware has become critical to competing against Apple and Amazon (AMZN), Mr. Sebastian said.
Google's new corporate computing service, Compute Engine, is another matter, he said. Companies would use the service to take care of their data crunching. All Google is doing is leveraging its existing infrastructure that is uses for its computing needs, Mr. Sebastian said. No significant investment is necessary except for marketing.
Broadly speaking, though, taking a company into a new direction is never made easily. Google's latest push into hardware was a particularly big gamble considering it came only after acquiring Motorola for $12.5 billion, the most Google has ever paid for a company. "To his credit, I do think Larry Page has focused the company," Mr. Sebastian said. "He's not afraid to make the big decisions."