Google Finance Shows that Google is No Longer An Innovator

The last two major product launches from Google have been Google Maps and Google Finance. While Google Maps redefined mapping and I am a fan of the product, Google Finance is merely a cheap knock off of Yahoo Finance done in Flash. While everyone is blogging about Google Finance, I believe the relevant question for investors is this:

Have Google's new product launches created new revenue streams for the company?

The answer is firmly no. In fact, Google Maps does not generate significant revenue and judging from Google Finance, the product will not either. In fact, what is incredible is that Google has taken its serendipidous approach to product management (that was perfectly fine for a 10 person startup) and now hope to make it work for a $100 billion company. Frankly, I don't know any $100 billion companies that run product like Google. I believe it is because the ones that did (including Excite, Lycos, @Home) have all perished because the strategy simply didn't scale. In fact, several well-respected tech executives who have visited Google have said to me, "Google is run like a zoo. There is no adult supervision." While conventional wisdom should usually be taken with a grain of salt, it should be taken seriously when some of the smartest folks in the tech industry are uttering those words.

Google's Product Management Strategy Is Flawed

A successful product management strategy is based on the creation of a well-defined set of functions that serve the unmet needs of users while creating value for the entrepreneur. Google's product strategy has been firmly focused on serving the unmet needs of users. With Google Maps, Google created a new way of visualizing data. With Google Finance, it is hoping to do the same. But in both cases, Google failed to create value for itself and for shareholders.

Google's New Product Launches Have Largely Been Business Failures

Good product management marries technical superiority with a keen understanding of what customers are and are not willing to pay for. Google's search product was not good product management. It was a technology looking for a business model that ended up finding one due to sheer luck. Google's new product launches have largely been failures because it has been unlucky this time around. Investors need to be mindful that while it is better to be lucky than smart, a product strategy based on knocking off existing products of competitors will not be successful in the long run particularly when there is no business model attached to these products.