Advertising, the money making machine for Google, accounts for practically all of its revenue. Google also depends mostly on the English-speaking market in the United States and the U.K. for 59% of its revenue.
After domination of a category like search, the question business leaders and investors always have is, What's next?
What's next is usually taking the incredible success of the mother brand and extending it into new areas. As well as gobbling up lots of other companies and rebranding them with the same brand name.
This is exactly Google's pattern today. And it's exactly the pattern of many companies yesterday. Companies like Microsoft, AOL and Yahoo.
If you know me, you know what I’m going to say next. It is a mistake.
The power of a brand comes from its ability to own a word in the mind. The more things you put your brand name on, the weaker that name becomes in the mind.
Say Yahoo to somebody today and they yawn. It means nothing because it over-extended and over-expanded its brand, leaving itself vulnerable to competition.
Say AOL and you think dial-up and failed mergers and expansions.
In the short term, it is hard to see the dangers of expansion. The "Let’s Google everything" strategy gives a boost to the company and more importantly the stock. While consumers and investors get fooled into thinking the strategy is sound, it is not.
(Company leaders who think in the short term are likely to run their companies into the ground.)
Yesterday, Google announced it was going to rename several non-Google brands as Google products. So say goodbye to Picasa and Blogger. Hello Google Photos and Google Blogs.
This is on top of the other Google brands such as: Google Alerts, Google Earth, Google Image Search, Google Labs, Google Local, Google Mobile, Google News, Google Video, Gmail, Google Analytics (Web traffic measurement), Google Chrome (Web browser), Google Desktop Search, Google Language Tools (translation tools), Google Talk (instant messaging), Google Toolbar.
But Google isn’t stopping there, its much-talked-about social-networking brand Google+ is coming soon. Google hopes Google+ will be a Facebook killer.
Just like Bing was going to be a Google killer?
The problem with Picasa won’t be solved by calling it Google Photos. The problem with Picasa is that wasn’t first and doesn’t dominate its category. Flickr does.
Launched in 1999, Blogger was one of the first blog-publishers. But its generic name made it harder to cement the Blogger brand into the mind. In 2003, Google bought Blogger.
Google has done better with other acquisitions that not only were pioneers in a category like Blogger, but also had superior brand names. Namely, YouTube and Android. Wisely, Google plans on changing neither of these names.
Google is a monster today. And like most monsters, it thinks it is invincible and not subject to the laws of marketing. But nothing could be further than the truth.
Google should study history. They don’t want to be the AOL or Yahoo of tomorrow. Google needs to surround its strong search brand with other brands and other brand names that dominate new emerging categories.
Toyota did that with Lexus, Prius and Scion. Google that Google.