Make no mistake: Google still has plenty going for it. On any given day, 63 percent of the world's searches are done on Google. That's a staggering stat. But that's where Google's story still begins and ends, even after so many attempts at generating new revenue from other streams.
I liken Google to a kind of trust-fund baby for tech: The company got mega bucks at a very early age, and ever since it has been trying to come up with creative ways to spend it, and far-flung business ventures to make even more. Remember that Google spent over $1 billion on its YouTube acquisition, but even after all these years, the deal still isn't generating any material profits.
The company is seeing nice traction with its Android Mobile operating system, but Google gives that software away for free. Nexus One, Google's so-called "hero" phone, the company's foray into hardware that was supposedly going to be an iPhone killer, bombed so badly that both Verizon and Sprint won't stock it.
Just this week there were rumors of a new Google tablet PC in partnership with Verizon, but there are no specs to speak of, no price, no release date. Same goes with the company's ambitious high-speed broadband network that we still don't know much about, or how much it's going to cost, or where it's going to be available.
Google has also dabbled in space exploration, green energy, and its Google Docs is supposed to be some kind of competitor to Microsoft and its Office empire, yet at best, Google has only been able to command 4 percent of that market.
I talked with the president of Microsoft's Business Division, Stephen Elop, and asked him direct questions about Google. So much is made of the rivalry between the two, but its much more like Intel vs. AMD than Coke vs. Pepsi . Elop tells me, "Look, Google is making a number of claims out there, but at the end of the day, it's Microsoft who's winning the customers."
True enough, and when I asked him about Google's attempts at software and browsers, like Android and Chrome, Elop laughed it off, saying "We have a saying at Microsoft: 'Hope' is not a strategy.'"
That might seem like a little hubris, but it's tough to argue the point from a company generating $4 billion a quarter from Office, while Google, with its endless resources, still can't really make a dent. Conversely, Microsoft released its search engine Bing not too long ago and already controls 11 or 12 percent of the market. In other words, Microsoft seems to be able to make more headway in Google's core business—and more quickly—than Google seems to be able to against Microsoft in one of its core businesses.
That's also important: "one of its core businesses" is something you can't say about Google. There's only one business at Google, and an enormous number of initiatives that have yet to pay off.