Google's Daring Dozen: 12 Big Bets In 2011Google's Daring Dozen: 12 Big Bets In 2011

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Google has done well in 2011, at least in terms of revenue and the popularity of Android, Chrome, and various other products and services.

But it hasn't been a perfect game. Looking over the company's major initiatives and projects this year, there are some bold moves, some stumbles, and many intriguing developments.

1. Google's Pending Acquisition Of Motorola Mobility
Good: 55%; Bad: 45%

In the best of all possible worlds, this deal would be unnecessary. But we're not living in that world. Google had to do something to address the growing fear among its Android partners and potential Android customers that its mobile operating system would crumble under patent litigation. Offering $12.5 billion for Motorola Mobility, with its sizable patent portfolio, and taking related steps like challenging the validity of Lodsys' patents and selling patents to HTC, staunched the bleeding of confidence.

[ Microsoft has made a lucrative business out of mobile licensing deals. Learn more: Microsoft Gets Android Phone Makers To Pay Up. ]

But owning Motorola Mobility and its intellectual property may not change the situation: Microsoft will generate huge sums from the various Android patent license agreements it has forced upon makers of Android hardware. Oracle's Android lawsuit remains. And Apple's continued success will only accelerate efforts to copy its hermetic business strategy. With Microsoft opening retail outlets and pursuing its own app store model, not to mention Amazon's launch of a Google-free flavor of Android, Google appears to have no choice but to make sure there's hardware being sold that will be able to accommodate its software--Motorola can help with that. The major technology platforms are building toward a vertically integrated future, despite all the talk of the wonders of the open Web.

2. The Chromebook
Good: 15%; Bad: 85%.

Google's Chromebook is an ambitious project that has been left in the dust by a fast-moving hardware market and hobbled by its limited value proposition. The Chromebook isn't a complete failure, even if Google won't say how many it has sold and Samsung cut its Chromebook price significantly. Chromebooks are actually respectable, though underpowered, machines, if you're in the market for a browser in notebook form factor.

The problem is that this is a niche market, at least at the moment. Chromebooks are useful for schools because they require far less maintenance and support that the typical Windows PC and because the pricing model is dirt cheap. But Google envisioned greater things for its Chromebook than life as a device you give to kids and employees because you don't trust them with the power to actually maintain local files and run local applications.

The Chromebook was born too bulky and too dependent on wireless connectivity for business travelers (though they're fine in hotels with Wi-Fi). The notebook market is becoming less and less concerned with the traditional notebook form factor--a slab large enough to contain a DVD drive and other computing hardware--thanks largely to the success of the slim MacBook Air. When CES rolls around in January, the action will be around ultrabooks, which is to say copies of the MacBook Air. Chromebooks needed a hardware refresh the moment they hit the market in June.

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What's more, lack of offline editing capabilities in Google Docs makes Chromebooks dead weight inflight, or anywhere that both Wi-Fi and cellular data service are unavailable or avoided--price-sensitive consumers don't want to maintain a separate cellular data plan for their Chromebooks.

Google may be able to turn the Chromebook around. But to make its Web-constrained hardware more appealing than a general purpose portable, the company will have to embark on either a multi-year slog combining promotion, competitive hardware, more mature online services, and unique features, or a Hail Mary pass--something like free nationwide wireless or product design that makes the MacBook Air look clunky and awkward by comparison. The less-is-more Chromebook value proposition only works when the buyer of the device isn't actually going to use the device--so much for the consumer market. And right now, most enterprises just aren't ready to trade in their PCs for Chromebooks. For Windows IT support staff, Chromebooks represent the path to unemployment.

3. Google TV
Good: 45%; Bad 55%

Google TV is preparing to return to the stage after a disappointing first act. Google has provided developers with access to improved Google TV software and the company insists that it will have new hardware partners and new chipset vendors in 2012. That's when we'll finally see whether Android apps that play on televisions enhance the TV experience.

Google hasn't been helped by Hollywood, which blocked its Web content from appearing on the first generation of Google TV late last year, or by Logitech, which tried to sell its $300 Revue for $200 too much. With Apple TV selling for $99, you'd think Logitech would have entered the market at a more competitive price point.

But with YouTube striking content deals, a few good apps, and hardware that will presumably carry a more realistic price tag, Google still has a fair shot at creating a viable platform in a TV market that seems to change daily. But the window of opportunity won't last forever: Apple is working hard to find a way to turn its Apple TV "hobby" into another province in its iOS empire.

4. More Wood, Fewer Arrows
Good: 90%; Bad 10%

Google CEO Larry Page described his initial managerial focus as an effort to put "more wood behind fewer arrows." The results of that policy have been startling: More than three dozen products and services have been shut down or marked for closure in 2011.

Overall, it was a necessary change. Google could not afford to keep throwing code at the walls to see what stuck. Having pushed the envelope for years, Google now has to keep the envelope from being pushed back by competitors that see their business models under siege. That effort requires focus.

Google's strategy of releasing code early and often still has a place, but more rigor and coordination is required when working with hardware partners. The quirky, intriguing Google of yore had to grow up too soon.

5. Raises
Good: 85%; Bad 15%

Faced with Facebook's well-known interest in Google engineers, and an inability to maintain its backroom agreement with competitors not to hire each other's employees, Google confronted a talent hemorrhage that only cash could cure. So last November, Google's Eric Schmidt, then CEO, told company employees that they'd be receiving a 10% raise in the new year. It may not have solved all of Google's managerial challenges--Google declined to comment on whether the raises improved employee retention--but presumably there's some correlation between employer generosity and employee loyalty.

The downside of course is that over time such recognition tends to be taken for granted and increased costs may make Google more cautious or less willing to spend on research and development.

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6. Google+
Good: 70%; Bad 30%

The fact that Google+, Google's answer to Facebook, didn't flop and didn't result in a disastrous privacy gaffe has to be counted has a win. Some things could have gone better: Google's introduction of business accounts, aka Google+ Pages, should have happened at launch rather than in a post-launch scramble; and the company's Google+ name policy, with its refusal to allow pseudonyms, unless you're one of the digerati, has been an exercise in tortured logic. We're still waiting for Google to rethink its stance on online identity. In the meantime, Twitter gets it.

But overall, Google+ has a lot going for it, like Hangouts, and should be welcomed even by Facebook fanatics, based on the premise that competition will force Facebook to try even harder.

[ Google+'s videochat service has a lot going for it. But are Google+ Hangouts ready for business? ]

The downside is that the social network risks becoming the Hotel California of computing--a place that you can check out of anytime you like, but can never really leave. The extent to which Google and Facebook can track users across websites means that users can no longer defend their privacy by saying, "It's none of your business." Your data is their business.

7. Google Acquires ITA
Good: 80%; Bad 20%

Google struck a deal with the Department of Justice to win approval for its acquisition of travel software company ITA earlier this year. In theory, Google's concessions should address concerns raised by Google's competitors. In practice, Google will probably still find a way to profit handsomely from the lucrative travel search market.

Consumers will benefit by being able to find travel deals at Google speed. While Google's larger competitors in the space, like Bing, Expedia, Kayak, and Orbitz, can be expected to adapt, smaller travel search outfits will find it more of a challenge to gain traction.

8. Google Acquires Zagat
Good 75%; Bad 25%

On the plus side, Google's decision to buy restaurant review company Zagat--in order to own review content rather than, say, borrowing it from Yelp--should warm the hearts of intellectual property advocates everywhere. On the minus side, Google's decision to own review content may mean less exposure for third-party content like that published by Yelp. The effect won't be immediate: Google wouldn't do anything so impolitic as to start dropping Yelp or the like from its index. But as Google builds new services, it may be able to look inwardly rather than outwardly for content that can engage an audience.

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9. Google Music
Good 95%; Bad 5%

Google Music isn't likely to make the music business what it once was. Nor will it make being a musical artist much easier, though many self-managing musicians will certainly appreciate being able to sell their songs through the Android Market. But if nothing else, Google has done consumers a service by offering an alternative to Apple's iTunes Match model, which requires $25 annually to listen to and store songs that the user has (or should have) purchased already.

Google Music may not immediately challenge Apple's iTunes or Amazon's MP3 Store, but it's good to see another competitor take to the field.

10. Android 4.0
Good 90%; Bad 10%

Google's long-awaited unification of its tablet and mobile phone versions of Android arrived with version 4.0, known as Ice Cream Sandwich. The Samsung Galaxy Nexus, the first mobile phone sporting Android 4.0, looks like it presents a credible challenge to Apple's iPhone 4S.

[ Compare new mobile operating systems from Google and Apple. Android 4.0 Vs. iOS 5 Faceoff. ]

Android 4.0 may be an answer to Apple's iOS 5, but it's an incomplete answer: The mobile browser in Android 4.0 doesn't yet support a number of important HTML5 APIs, like Web Sockets, Drag and Drop, and HTML5 forms--these would be particularly useful with their built-in input checking capabilities. Google, as one of the loudest advocates of HTML5, really ought to be fielding a mobile browser that bests Safari on iOS in a varied set of tests. But there's no mobile version of Chrome, yet.

More broadly, the problem with Android 4.0 is that it's not immediately available to a significant portion of the Android customer base (at least among those disinclined to use a command line). If you want Android 4.0 right away, you'll probably need to buy a phone that has it installed already, the Galaxy Nexus. As to when the mobile carriers will make Android 4.0 available, well, that's up to the mobile carriers, rather than their customers. A three-month wait to get Android 4.0 isn't really ideal in a market segment with six-month product cycles and a preference for instant gratification.

11. Google Fortifies The Web
Good 95%; Bad 5%

Google has continued to support open Web technologies, through projects like Android, Chromium, the WebM video codec, the WebP image compression format, the Dart programming language, and NativeClient, and through its introduction of tools like Swiffy, QualityBots, its Page Speed Service, and PlayN. While Google helps itself as it advances Web technologies, it is also helping its competitors--witness how Amazon doesn't allow users of the Android-based Kindle Fire to install apps from Google's Android Market. And for such selflessness, Google deserves some recognition.

12. Google's "Monopoly" Defense
Good 65%; Bad 35%

In its 13-year existence, Google has become enormously powerful and has made many enemies in the process. Some of those enemies, most notably Microsoft, have argued that Google's search advertising business violates antitrust laws and that Google's search system treats Google products and services better than third-party offerings. The charges have enough substance that both U.S. and EU regulators have started looking into them.

Google has been relatively effective in defending itself and the chance of any harsh regulatory remedy for the company's success looks remote.

Yet, if Google ultimately escapes antitrust penalties akin to those that confronted Microsoft around the time of Google's birth, we will still be left with a playing field that current laws just don't seem able to level. Companies that own platforms have powers that give them competitive advantages.

Perhaps there's nothing to be done--try to imagine a world without Google, where, say, Microsoft ran the world's most popular search engine, or a world without a dominant search player, and that scenario doesn't look like an improvement. But questions about competitive fairness should keep being asked, even if sensible remedies aren't immediately obvious.

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