Jeff Kagan: Why Google+ is Shutting Down

Jeff Kagan  |


So, Google+ is shutting down. What’s the real reason behind this sudden move? It’s not what you think. It’s not what they are pointing to. It’s not the fact that they exposed the data of up to 500,000 users. No, the real reason Google+ is shutting down is the same reason other Google businesses have shut down in recent years. Bottom line, Google+ failed.

If Google+ was a successful business, it’s executives would simply announce the 500,000-user data exposure as a cost of doing business, then move on. It’s important to understand the company and why only some of their moves work.

The failure of this and other items may be one reason why Google failed to be present at the recent US Senate hearing. So, what’s up? As the company continues its rapid growth, it is suddenly facing growing backlash in the area of privacy and other sticky subjects.

Secret Behind Alphabet Google+ Closing

Google or Alphabet  (GOOGL) is a hotbed of ideas. Their strategy is to try everything and see what works. What works, they continue to grow. What doesn’t work, they close. It’s really just that simple.

When we think of Alphabet or Google, what do we think of? The search engine. Android operating system used by many handsets like Samsung Galaxy. Their own Pixel handsets. The wireless service called Project Fi, navigation for our cars, and so much more.

Yes, Google is a hotbed of ideas and services. In fact, if you look into what services you can get from Google, it’s truly amazing. Many of these are key growth engines for the company. Others are not growth engines on their own but are important as a piece of the bundle. That’s why these are important as well.

There have also been loads of services that just didn’t make it. Remember Google Health? It was a search engine for the healthcare industry. It answered loads of questions for users and healthcare practitioners. While it was a great idea, it simply was not profitable, and it wasn’t important as a part of the larger bundle. That’s why they closed it down.

Alphabet Google Business Fall into One of Three Categories

Some of the most successful Google services are search, advertising, Android, navigation and more. Other areas they want to be successful at but are still struggling with are Pixel smartphones and ProjectFi wireless service, which is an MVNO reseller of Sprint  (S) and T-Mobile  (TMUS) services. This second category is important to the future, so they keep trying. The third category are things that simply do not work or are not profitable.

Google+ launched several years ago in a very loud thunder. There were countless stories written and so many users tried to make it work, but that didn’t work.

Today, years later, the fact is, Google+ failed. The idea of this service made sense when it launched. They wanted to compete in the social media space with companies like Facebook  (FB), Twitter  (TWTR), LinkedIn  (LNKD) and more.

However, Facebook understands customer satisfaction is a moving target. They realize they can’t expect to launch a service and have it continue forever. That’s why they keep acquiring other companies and services. That’s why their user base moves from one to the other. Think Instagram and others.

Twitter and LinkedIn are still doing well, but their business model has not changed much over time. I think Google+ was trying to compete more directly with Facebook and all their services. They just could not attract enough attention from users to make it a success.

Not that growth has been easy for Facebook. The original service has been challenged. However, they have moved beyond that single service to others. Google+ has not really matured. They have not changed. So, they have struggled.

This failure was a big surprise to many. We all know how successful Google and Alphabet are. They are not newbies. They should have understood what they needed to do in order to be successful and grow in the social media space.

This is disturbing that they failed at something they could have been, should have been successful at. Then again, Google has failed at so many other businesses as I have described above.

But that’s their strategy. They throw ideas up against the wall. Whatever sticks, they build. Whatever falls away, they close and move on.

Remember, Google or Alphabet is in so many different businesses. Each of these, fall into one of three categories. Either they are a successful, stand-alone company. Or they are less successful, but still necessary as part of the larger bundle of services. Or they have failed. If these are not part of a larger bundle, and if they won’t have a negative impact on Google, they are simply closed.

The good news for Alphabet is they are a dominant and fast-growing company. They are still hitting the ball out of the park, even with these kind of misfires like Google+.

Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.

DISCLOSURE: DISCLOSURE: Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.


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