Jeff Kagan: Why Did Google Disappoint and What’s Next?

Jeff Kagan  |

We knew it had to happen. Google Inc. ($GOOG), one of the tech industry’s largest and fastest growing companies, missed Wall Street expectations. So what went wrong? And should we expect more disappointments, or is this just an occasional blip on the long-term radar? These are important questions whether you are an investor, worker, or partner with Google.

You notice I didn’t mention customers. That’s because customers continue to be blown away by the tech giant. Users and customers still love Google. However, this miss could make others queasy.

To answer the question quickly, let me start by saying I don’t worry about Google. Not yet anyway. I simply see nothing wrong that hasn’t been there for a long time. They are still a rapidly growing company that is changing industry after industry.

Google is not like other companies. Google does not just have one target product or one target audience. They may have started out as a search engine, but Google is so much more than that today. They ride multiple waves.

They are into so many different industries and business that is can make your head spin. Think of Google as a special kind of company who throws lots of ideas against the wall, quarter after quarter. Whatever falls away they forget about.

Whatever sticks they build into a powerful business. And the successes are typically new sectors with little in the way of real competition, at least in the beginning.

Google ideas are not typically in traditional sectors. They like to play on the edge. They like to build new sectors. They like to change things. Create new growth paths. And they are not alone. ($AMZN) and Facebook ($FB) do the same thing. If you recall started selling books online in the 1990’s and Facebook was a social messaging service until a year or two ago.

Today however Google, and Facebook lead the transformation of the entire tech sector. They all keep acquiring other companies and adding to their power base.

One important thing to know is all these companies continue to throw stuff against the wall. It’s a messy practice, but it works. Whatever sticks they build into new business segments and they lead.

They seem to be transforming the every slice of the tech sector, one by one. How long can they continue? That’s the question that no one has an answer to. Eventually they will reach their peak, but that does not seem in sight yet.

Slowdowns do happen to every leading company. Just look at all of yesterday’s leaders who are struggling or even dying today. New competitors, new technologies and more change the space and take over the leadership.

Today that is Google, but for how long?

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Sure, there are other companies as well who fit into that mold. Many started out doing the same thing then fell aside. Plus many other leaders of tomorrow aren’t on the list yet. This is part of a very robust business economy in the tech sector.

That’s what makes this so exciting to be part of. In that world, we can’t be concerned with any particular quarter. We can’t really think like day traders. Google, and Facebook are three examples of hot tech companies, which will continue to grow for many years to come.

Remember, Google is into not only search engines, but different search engines in different businesses or sectors. Some work and continue and others fail, but they keep growing as a company.

Example, I remember Google Health, which was a health care search engine. It made so much sense, but it is now gone. It didn’t stick to the wall. So Google closed it down. Not everything works.

However plenty does work. Google is also in the smartphone and tablet business with their Android operating system. Not only do they make their own handsets, but they also are the operating system on a variety of competitors devices like the Samsung Galaxy.

Google is also many other businesses like Google Glass, smartwatches, apps like Google Maps, Gmail and countless other businesses.

In fact Google Fiber is also building one-gigabit high-speed data networks in what looks to be a growing number of cities competing with companies in this sector like AT&T ($T), Verizon ($VZ), CenturyLink ($CTL), Comcast ($CMCST), Time Warner Cable ($TWC) and Cox ($COX). This is another brand new sector for them.

AT&T (T) , Verizon (VZ) , CenturyLink (CTL) , Comcast (CCS) , Time Warner Cable (TWC) - See more at:
AT&T (T) , Verizon (VZ) , CenturyLink (CTL) , Comcast (CCS) , Time Warner Cable (TWC) - See more at: This is another brand new sector for themWith all these growth opportunities, I see Google still on the solid growth track, even though quarters can vary.

So Google is not slowing down. Instead they are accelerating. And I expect to see this continue for many years to come based on what I see so far. No matter what happens in any particular quarter.

That is until the time comes when, like Apple, they change from a growth company to just a very large and successful non-growth company. Unfortunately that does happen, but I don’t think Google is anywhere close to that yet.

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