What is an area where Google is under invested?

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What is an area where Google is under invested?

Asked at Google over a year ago

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Caavi · Answer 1 · 2020-08-01T07:35:39+0000

Clarify: When you say under-invested, is it based on the revenue split or based on competitors product

Interviewer: You pick!

Alright. I'll put together a quick competitive analysis and I may ask some clarifying questions

Interviewer: Sure.

Is it fair to say - Google's Rev split is 80% Ads and 20% others (Playstore + Apps, GCP + Mobile + Others)?

Interviewer: That sounds about right

Okay. Let me build a quick competitive analysis - Let me know if I am off by more than 5% margin of error when I'm comparing the revenue split.

Interviewer: Sure.

Google	Amazon	Microsoft	Apple	Facebook
Rev 80% Ads	Amazon 80% Retail	50% B2B Product (Office, Windows etc)	80% Hardware	95% Ads
20% (Google Playstore, Apps, GCP, Mobile Others)	5% Ads and roughly 10% AWS and rest others (Prime etc)	Hardware and partnership constitute other 25% and I don't know the other part	and more than 50% is iPhone. Rest is Services	5 % others - VR products and other acquisition
Next Big Thing
Voice Assistant (At No.2)	Voice Assistant (No 1)	Cortona is at the bottom	Siri - No 3	All their hardware product has Alexa integration

Voice Assistant is Key to build the ambient computing network that helps in personalized experience to users and better targetting ads resulting in higher CPMs for Google. Where as for Amazon, Alexa helps in the frictionless buying process thereby completely cutting off Google that drives top of the funnel users to Amazon - I think Google is doing the right thing of investing heavily here. So this is ruled out. Infact, GCP is investing heavily to take on AWS as well
Microsoft: - MS is investing heavily in consumer tech / Aps while guarding heavily their core B2B business and Google is competing with MS in Chromebook (hardware and OS) + Google Office products. GCP is head-on with Azure. So I wouldn't say they are underinvested here
FB: Head-on with Ads business and a huge threat to ambient computing as FB hardware products (VR, Portal etc comes with Alexa OOB) FB - Amazon partnership is going to be a huge threat to ads business
Apple: Apple Eco-system is strong as the customers are very loyal. Google has tried many things
- Nexus Phones
- Huawei Phones
- Now with Pixel - But Android phone market is fragmented - Samsung, LG, Motorolla (Google acquired and sold) and this seems like a potential under invested area.

So I'll choose Apple and dig a little bit deeper. Let's look at Apple user's user journey

Wake up with iPhone either on phone or watch -> Use iPhone Apps for various task (only Google Maps is used by a good chunck of apple users) and use Car play and Apple Music aka iTunes -> Get to work and use Mac book and mostly use Safari for browsing -> comeback home and check FB / WhatsApp / Instagram to social network and go to Amazon app for purchase - Leaving google completely out of the picture
- Amazon doesn't get a lot of data outside of Amazon app
- Google gets only Maps data
- FB gets more data than Google!

The only way to penetrate this is strong ecosystem is by introducing

iPhone killer
Being successful in creating a next generation social networking app

Google has taken several stab at iPhone killer and it is better to leave it as is and let Android OS do the magic of getting user data

That leaves us with Social Networking App that can kill 2 birds with one stone - FB ads revenue & Apple user ecosystem penetration and clearly Google has failed multiple times in building a social networking app or even acquiring one. Eg

Orkut
Google +
Shoelace
Failed with multiple message apps (Allo etc) and failed to make a quick move on WhatsApp

In Summary: I would say although Google is the leader in Ads world via Android, Google Voice Assistant, Ambient Computing and Knowledge Graph, it is very weak in Social networking apps. In spite of multiple tries, the company has not cracked that piece. Breaking someof the non android ecosystem without a strong social networking apps that these OS users can install, may turn out to be too expensive. So I would say Google is under invested in this area.

csanjay · Answer 2 · 2020-08-24T10:38:59+0000

Clarifications

What are the criteria for underinvested:

Under invested compared to a competitor [example google music vs spotify],
Under invested compared to potential opportunity [ Waymo],
Under invested compared to the complexity of the problem at hand[ deep mind ]

What is the scope of the area

Is waymo the same area as google maps? Is google trips same area as google flights? is all advertising revenue focussed products in the same area? Is GCP a single area?

Exit summary: Pick a technology segment where google is under invested compared to market opportunity

Google current investment situation

Top strategic investments: Google Cloud, Google search, Android, Youtube
Market-leading investments: Gmail, Maps, Chrome
Investment catching up: Goole play , Google voice , Nest home, andoird wearOS, Gsuite
Future bet investments: Waymo, calico , deepmind ...
Fixer-upper investments : Chromecast , Pixel phones ,fitbit,

Key priorities for Google

- Defend Ad revenue risks: vertical search [amazon, linkedin, quora], social media [twitter,facebook]

- Stay innovative in core products to avoid commoditization

- Deliver Moonshots

List of areas under invested and evaluation criteria

Investment area	Potential	Google priority	Additional investment needed	Risk
Self driving cars	H	M	M	H
Google cloud	H	H	H	M
NEST	H	M	M	H
GSUITE	H	M	M	M
SOCIAL Media	H	H	H	H

h = high, M= medium, L=low

Summarize

Google Cloud is a currently under-invested area

- High revenue, AWS makes $35b every year [think youtube is just $12B]

- Rapidly growing with enterprise moving to cloud in future / coivd impact

- Currently, Google is not among top 2, AWS/MSFT investment high

- High barrier to entry and low risk to loose all ,compared to social media