The story of Google’s success isn’t exactly that of a small company that defied the odds. Its founders were Stanford Ph.D. students. Early angel investors included Amazon’s JeffBezosand SunMicrosystems’ AndyBechtolsheim. In those early days of the internet, with even established players still figuring things out, the startup was well-positioned to disrupt the status quo.
Now, Google is one of the biggest companies globally, and its name has entered our lexicon as synonymous with the very act of searching. Businesses seeking to optimize for search engine relevance, which is really everybody, are for the most part only concerned about Google’s algorithms.
It seems unthinkable for Google to lose its current dominance, but that situation could be more likely than you’d expect.
Warning signs
Google currently powers over 90% of the world’s search activity. It holds over 60% of the global market in search advertisements. It has maintained this dominant position in the industry for over a decade and is ranked only behind Apple, Microsoft, and Amazon in terms of value among publicly traded companies.
To some, those statistics would suggest a business that’s too big to fail. Others believe that there’s no such thing. History would seem to agree with those in the latter camp. Keen observers will have noted recent warning signs, such as tightening government interventions and regulations.
In separate cases, the Department of Justice, and attorneys general from 35 states, have filed legal action against Google alleging anti-competitive, monopolistic practices. Australia passed a world-first law to make tech companies pay for news content on their platforms, which resulted in Google settling an undisclosed amount.
Parallels can be drawn with other giant companies that have failed in the past. The British East India Company, which once accounted for half of world trade, was dissolved by its government. Standard Oil, the textbook example of a monopoly, was dissolved by a 1911 Supreme Court ruling. More recently, Microsoft faced the prospect of a breakup after losing a 1998 antitrust case, which was ultimately settled.
Each of these companies, at some point, had been considered unassailable. Over time, though, numerous factors combined to bring them low. The successor companies of Standard Oil persist, and Microsoft remains a major player, but they aren’t the behemoths they once were.
Losing position
The complete failure of Google is unlikely. It has actually done an impressive job of diversifying over the years. Under its parent holding company, Alphabet, which was established in 2015, Google is invested in diverse and far-reaching branches of technology.
Beyond search and ads, the company has a solid driver of revenue in YouTube. Its Android OS holds a similar majority of the global smartphone market. Its cloud-based services are being used by countless businesses.
Those products fill needs that are in high demand. One disruption, even if it were to massively impact Google’s major revenue streams, wouldn’t be enough to bring the company to its knees.
If Google were to lose its dominant position anytime soon, it wouldn’t vanish. It would merely take a tumble to the benefit of its competitors.
There are indications this is already happening. Facebook holds the advantage in the realm of social media marketing, which would certainly rise to the occasion if Google slides. Amazon is already encroaching on Google’s market share by offering algorithms on its own marketplace, eliminating the middleman when users want to look up products.
Innovation’s loss
From that perspective, nothing would really change in the event of a Google downturn. Other companies would fill the void. Consumers and businesses would still see their needs satisfied by a somewhat different combination of search methods and marketing tactics. For some, such a disruptive event would even be an opportunity to master those new platforms’ algorithms and gain an edge.
The scenario that could prove ominous, though, is one where Google falls prey to the biggest pitfall of AI and big data: self-disruption.
The trend towards allowing big data and machine learning exert a strong influence on companies’ decision-making threatens that. We use these tools to cut through complexity, searching for that extra 1% advantage, but blindly pursuing efficiency blocks you from pursuing actual innovative ideas.
Google has had its share of hits and misses over the years. There have been notable failures, such as Google Glass and Google Buzz. That’s part of the territory when you’re fostering innovation. You take risks even if the data says it might not be a good idea.
Google’s greatest strength has been its ability to process data for relevance, making vast information meaningful to humans. If a company like that should fall because it lets algorithms get in the way of innovation, it doesn’t bode well for the collective future of any company harnessing AI.
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