Google's Midlife Crisis

In social networking's brave new world, can the Internet giant expand beyond search?

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Is Google stuck in a rut? The search giant's stock is down 21 percent since January and efforts to diversify its revenues have been less than satisfying. In an exhaustive article, Fortunes' Michael Copeland and Seth Weintraub argue that Google's "search party is over." As people begin to rely on social networking to guide them through the Web, keyword searches no longer rule the roost, they argue. Can Google keep up in this brave new world? Technology observers discuss:

Say you want to buy running shoes to train for a marathon. Five years ago you would have simply Googled it, looked at the list of results, weighed your options, and made the purchase, perhaps by clicking on one of the sponsored links that accompanied your search. Today you might still do that, but increasingly you might pose the question "What running shoes should I buy?" to your friends on Facebook, or maybe write "Who knows about training for marathons?" on Twitter. By the time shopping service Groupon sends you (and 25 of your friends) an offer for the perfect shoes and registration for a race, you'll probably just pounce on it.

  • Google Doesn't Know How to Connect People, says Tom Coates in the Fortune article: "Google is very good at building these utility-type products -- search, e-mail, and messaging. They are sort of like the power company of the Internet. But what they lack is a sense of how people share and collaborate."

  • The Social Networking Threat Is Overblown, writes Internet entrepreneur Patricia Handschiegel: "Let’s not forget how giant MySpace had been. The media seems to have forgotten how it fawned and toted over MySpace, certain it’d never die, but that doesn’t change that it did — and it could happen to Facebook just the same. Google’s not in that position, and won’t likely be. In fact, Google’s so far away from any company in the space in terms of truly capitalizing on what’s ahead, the media should be looking at that with concern. When all is said and done, you can be sure you should be."

  • This Fortune Story Is Bogus, writes Patricio Robles at Econsultancy: "At the end of the day, the risk for Google is not that it won't develop the next big thing. Sure, it can't stop evolving and trying to innovate. But there's far more risk in Google losing sight of its core business and trying to become the next Facebook than there is in Google continuing to deliver the best possible search experience. That's why Google should ignore tech pundits, analysts and journalists who suggest that the company needs to fix something that isn't broken. Google is a search company, and anybody who says that the company's party is over when it's generating billions in profit every quarter clearly doesn't have good taste in parties."

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