Google Waves Bye to Wave, Fails At Business Innovation (Again)

Google said, "Bu-bye!" to Wave, its collaborative platform that could never get enough people into a virtual room to take off. Although the company puts on a brave face about what it learned and the ways it will use some of the basic technology, and CEO Eric Schmidt wants Google to celebrate its failures, that's nothing but happy talk.

Having yet another Wave of business failure crash on Google's private beach is a seriously bad sign for the company, and management knows it. Of course the money from ads is still good, but that's the past. And no doubt that Google undertakes a lot of technical innovation, some of it interesting. But the company fails time and time again to turn that investment into a business advantage, which means that all the work becomes nothing but computerized ego stroking. What Google needs is some serious innovation -- in how it approaches, grows, and sustains business.

For a high tech company focusing on trends and what's new, Google is stodgy. It doesn't matter what goes on inside the walls in terms of clever thinking or "unconventional" behavior that is actually status quo for Silicon Valley. The company has developed a rigid approach to business development that strategically hurts it, as evidenced by Schmidt's own word. (And thanks to GigaOM for these excerpts from the video of Schmidt talking to a small group. The sound quality was so atrocious that I'm not bothering to include the link.)

It's absolutely OK to try something very hard, have it not be successful, take the learning from that and then apply it to something new. In that sense Wave is a exact analog. Would I have loved version 1 to be hugely successful and have five gazillion users, absolutely. As a culture we don't over-promote products that haven't been announced, we release it and see what happens. It works, you announce product, you ship it, initial adoption period, a fall-off, and then a second growth period. That second growth is a high predictor of what will happen.

That might make sense within a strict Darwinian view of the world. However, to send products out into the cold with little to no support is like waiting for the batch of hatchlings to crack open their eggs and then to invite the local predators.

Innovation on the product and technical front requires innovative and devoted business resources to give those ventures the best chance of success. Mathew Ingram on GigaOM argues that no one should be "quick to condemn Google for releasing [Wave] or experimenting with it." I agree completely and thought it was one of the more interesting things the company has done in some time.

However, to experiment and release software and hope that it goes somewhere, particularly if you want to change the way users work or communicate, is the height of waste. Introducing products, nurturing them, developing an audience -- those skills are critical to business success. Standing to the side to see if people catch on to a Wave or a Nexus One or any other Google detritus is simply bad business. Interestingly, Google's big commercial successes, like AdWords and Android (they give it away, but make a bundle on ad views) were acquisitions. Someone else did the yeoman's work of providing the fighting chance. Had it undertaken these completely on its own, Google probably would have written them off.

As I've pointed out, Google's revenue growth over time is getting flat. Granted that a large company has a harder time showing growth than a small one, simply because the amount of revenue to be noticeable is so much greater. However, no matter what Google does on the technical end, the vast majority of time it flubs in the execution. That's fine so long as patience and ad revenues stay up. But the more it relies on ads in new places, the more potential ad inventory it creates, and economics says that prices -- and, eventually, revenue -- will fall. Just look at media companies that went online. Unless Google learns to treat its own work in a better way, it may find itself ill-treated in the end.

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