Google Backlash – Round 2

A Business Week article takes a critical look at some of Google’s products and specifically at their market share. And while I agree that Google is overhyped, the pendulum swings too far to the other side.

PostBubble sees Google’s experiments in a positive light based on the potential return on investment.

The cost of developing these applications is probably less than google spends on a weeks worth of food for their employees.

Even if this was true (it probably isn’t, software development is time consuming and expensive) Google will have to keep all its products up and running. Maintenance and support alone consume resources and money. What happens when Google starts killing their unsuccessful experiments/products to cut costs? How are the users going to react? Is a slow death an option (see Orkut)?

Is Gmail still not openly available because it is too expensive for Google? Marissa Mayer said in a recent Business Week interview:

Gmail, I would say, has actually been phenomenally popular. It may not be the size of Hotmail and Yahoo! Mail. We actually have artificially restricted the uptake of Gmail through the invitation model. And I think it’s pretty easy to imagine that if we removed the invitation model, we would see ten times as much demand.

Demand is independent of supply, right? I have a hard time believing this claim because there are more than enough invitations out there. Every existing user basically has 100 invitations to hand out.

Business Week cites market share numbers for several Google products and compares them to the competitors. Looking at the trend would be more important though. I wonder how fast Gmail’s user numbers are still growing. And how does this growth compare to the competitors?

I was out for drinks yesterday with friends some of which work for Google. I commented on the recent Google Wallet launch (or whatever it is called):

Google is launching so many products because they’re still looking for a business model.

Only one friend laughed. He doesn’t work for Google.

Is round 3 of the backlash going to be the one that will have an impact on the GOOG stock price? Round one happened in early 2005 when there was a wave of “Yahoo! got its mojo back” posts.

[Footnote] I work for Yahoo! Mail.