AH Primetime: Google's Corporate Mantra Focuses On Patience

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Google has always had a certain way of doing things, right from the time two Ph.D. students from Stanford University founded the company back in the late 1990s. Messrs. Page and Brin have come a long way since then, as has their company which began life as a search engine but has since diversified with a veritable smorgasbord of services ranging from maps, mail, cloud storage, video streaming, social networking, client software, mobile software and the like. For a company whose chairperson Eric Schmidt once defended his business against allegations of tax avoidance in the UK by saying "It's called capitalism. We are proudly capitalistic", Google seems surprisingly reluctant to look at short-term financial returns before introducing new features and services. Cases in point are more than just a few.

When Google bought YouTube, the video hosting service was still in its infancy and wasn't making any money. It was the place where people mostly uploaded adorable amateur videos of their kids or pets, and although the site had already started to draw attention, it was far from the polished and professional (if slightly impersonal) looking place that it is today. Google of course, saw the potential and decided to invest anyways, and buckled up for the long haul. It bought out the service for $1.65 billion in 2006, and since then, has seen revenues rise exponentially to over $4 billion in 2014. While many may lament the loss of the amateur nature of the site, Google has helped monetize the service to the extent that YouTube now contributes a significant chunk of Google's non-search revenues; although, Google is still not making any money from YouTube at the moment. Then there's Google Earth, the map and geographical information program that Google got by acquiring Keyhole Inc. Again, the service is as yet mostly non-monetized, but that doesn't stop Google from spending oodles of money on furthering its development.

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It's not just the products that have been launched for public consumption either. Even more wacky and out-there research is reportedly going on as part of Google's so-called "moonshot" projects, some of which are conducted in the secretive "Project X" labs half a mile from Google's corporate headquarters at Googleplex in Mountain View, CA. Some of those reported projects include Project Loon, which aims to provide internet service via balloons in the stratosphere. Then there's an airborne wind power company called Makani Power; there's Project Wing, a drone delivery service; Google Contact Lenses, which are supposed to measure glucose levels in tears; an artificial neural-network for speech recognition and computerized vision for the differently abled; Calico, a biotech venture looking to combat aging and associated illnesses, and the much talked about self-driving cars. Then of course, there's Android itself, which was a giant leap of faith at the time when Google bought the eponymous company for a rumored $50 million in 2005. There have also been other experimentation regarding building a space elevator, a hoverboard straight out of Back to the future, teleportation etc. While most of these projects have been found to be unfeasible for one reason or another, some others like the self-driving cars project and Google Glass are already a reality, and all Google needs to do is put the finishing touches on them before they can hit primetime.

Now, at the recently concluded Google I/O, Google has announced yet another product which has a clause that seems a bit puzzling for some. A new photo sharing and organization app for Android, iOS and the web, Google Photos comes with unlimited cloud storage for free. While consumers may rejoice at the offer, stockholders might be a little bemused by the commercial viability – or lack thereof – of offering unlimited free storage when most competitors like Microsoft, Apple and Dropbox charge money for high-volume storage. While giving an interview after the keynote speech at the conference, Sundar Pichai, Google's Senior Vice-President of Products and the man in charge of Android, looked to analyze Google's apparent disdain for immediate financial returns in the face of demanding investors. Pichai said, "First, if we help users get information, a lot of which is inherently commercial, monetization opportunities arise. Second, history always shows that if you build something millions or billions of people end up using, that builds a lot value too … We project at scale, and we realize Moore's Law is at work. We feel comfortable with how we model it".

Some are already drawing parallels with the time when Gmail came along offering unlimited storage. Webmail services like Hotmail were already popular, but heavy users had to pay for storage beyond a point. However, despite offering unlimited free storage, Google was still able to eventually monetize the business by selling Email to businesses and getting ad revenues from the consumer-centric product. Similarly with Android Pay, Pichai claims the company is looking to help its partners find solutions rather than making money for itself from the get-go. Because Google realizes an oft disregarded mantra of the consumerist economy – satisfied consumers will lead to profitable ventures in the long run. That really has been the hallmark of one of the largest and most ubiquitous companies in the early twenty-first century. While the company is sticking its fingers in almost every pie imaginable, it is doing so in a systematic and well thought-out manner rather than in a haphazard way. Of course, with all the billions that Google's been making from advertising on its search engine alone, it does make things easier to spend money on R&D – or in Google's case, on ideas that may or may not ever see the light of day, and even if they do, there's no telling if they'll ever make any money. Google can spread its wings in any direction it wishes to without penny-pinching, because, as Pichai pointed out, "The model (for monetization) emerges later".

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Senior Staff Writer

    I've always been a tech buff and have been building my own PCs since as far back as I can remember. My first computer was a home-built desktop running MS-DOS on which I learnt to program in GW-BASIC and my interests apart from technology include automobiles and sports.

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