Larry Page: Google has positioned itself strategically for the post-PC world

6 Apr 2012

Google CEO Larry Page, who has written a long letter on his first year as CEO but also offers a tantalising view as to where Google is headed next

In a long letter to round off his first year as CEO of Google, Larry Page has made it clear why the company has refined its privacy policy, and the numbers speak for themselves – Android is achieving 850,000 activations a day, Chrome has more than 200m users and every day 5,000 businesses and colleges choose Gmail.

In a letter that emphasised how Google is aiming for beauty and simplicity across all its products, what I took away from it is how Google has moved from a PC experience to one that you expect to find everywhere – tablets, smartphones, TVs and soon, your car – and how that has to be a consistent experience.

In the letter, Page made it clear that the company had to ruthlessly cull projects and in order to achieve the right focus he pointed out that core to the many changes, including the launch of the Google+ social network last year, search will be tailored increasingly around the individual, no matter where they are and no matter what device they are using.

It also revealed the heart of Google’s decision to reduce more than 70 disparate privacy policies down to one.

“Today, most search results are generic, so two strangers sitting next to each other in a café will get very similar answers. Yet everyone’s life experiences are unique. We are all knowledgeable about different things; we have different interests and our preferences – for music, food, vacations, sports, movies, TV shows, and especially people – vary enormously.

“Imagine how much better search would be if we added … you. Say you’ve been studying computer science for a while like me, then the information you need won’t be that helpful to a relative novice and vice versa. If you’re searching for a particular person, you want the results for that person – not everyone else with the same name. These are hard problems to solve without knowing your identity, your interests, or the people you care about,” Page wrote.

It is crazy to think that 14 years ago the Google family consisted of a single search page and Page’s letter was a reminder of just how much products like Maps have permeated the digital lifestyle. It also in a way emphasised how Google has evolved from two students maxing their credit cards to buy servers in Silicon Valley in 1998 to 2012, where products like Google Wallet allow people to tap and pay with their smartphones in Macy’s in New York.

Mobile is becoming more important than the desktop

In a world where the mobile screen is exceeding the importance of the desktop screen, Page highlighted the sheer scale of the Android opportunity.

“I remember first meeting Andy Rubin, the creator of Android, back in 2004. At the time, developing apps for mobile devices was incredibly painful. We had a closet full of more than 100 phones, and we were building our software pretty much one device at a time. Andy believed that aligning standards around an open source operating system would drive innovation across the mobile industry. At the time, most people thought he was nuts.”

Fast forward to today. Android is on fire, and the pace of mobile innovation has never been greater. More than 850,000 devices are activated daily through a network of 55 manufacturers and more than 300 carriers. Android is a tremendous example of the power of partnership, and it just gets better with each version. The latest update, Ice Cream Sandwich, has a beautiful interface that adapts to the form of the device. Whether it’s on a phone or tablet, the software works seamlessly.

“As devices multiply and usage changes (many users coming online today may never use a desktop machine), it becomes more and more important to ensure that people can access all of their stuff anywhere.”

Page also emphasised that the acquisition of Motorola Mobility is about technology innovation and that Google will maintain its commitment to open standards.

“We are excited about the opportunities to build great devices capitalising on the tremendous success and growth of Android and Motorola’s long history of technological innovation. But it’s important to reiterate that openness and investment by many hardware partners have contributed to Android’s success. So we look forward to working with all of them in the future to deliver outstanding user experiences. Android was built as an open ecosystem, and we have no plans to change that.”

Google’s methodology of taking ‘big bets’, such as the US$1.6bn acquisition of YouTube, Page said is paying off.

“In 2006, when Google acquired YouTube, we faced a lot of scepticism. Today, YouTube has more than 800m monthly users uploading over an hour of video per second. It enables an activist in Syria to broadcast globally or a young star to build an entertainment network from scratch. YouTube channels have real potential to entertain and educate, as well as to help organise all the amazing videos that are available. So I’m excited we have a new effort working with media powerhouses such as Jay-Z, the Wall Street Journal, and Disney to create channels that appeal to every interest.

“People rightly ask how we’ll make money from these big bets. We understand the need to balance our short- and longer-term needs because our revenue is the engine that funds all our innovation. But over time, our emerging high-usage products will likely generate significant new revenue streams for Google, as well as for our partners, just as search does today.

“For example, we’re seeing a hugely positive revenue impact from mobile advertising, which grew to a run rate of more than $2.5bn by the third quarter of 2011 – two and a half times more than at the same point in 2010. Our goal is long-term growth in revenue and absolute profit – so we invest aggressively in future innovation while tightly managing our short-term costs,” Page said.

Doing the impossible

Returning to the theme of privacy, Page pointed out that Google doesn’t work in a static industry, change happens and it’s difficult to accept at first. But that said, trust is king and the internet giant intends to remain faithful to its original rule: ‘Don’t be evil.’

“Users place a lot of trust in Google when they store data, like emails and documents, on our systems. And we need to be responsible stewards of that information. It’s why we invest a lot of effort in security and related tools for users, like two-step verification and encryption, which help prevent unauthorised access to information. The recent changes we made to our privacy policies generated a lot of interest. But they will enable us to create a much better, more intuitive experience across Google – our key focus for the year.

“We have always believed that it’s possible to make money without being evil. In fact, healthy revenue is essential if we are to change the world through innovation, and hire (and retain) great people. As a child I remember reading about Nikola Tesla, a genius whose impact was severely limited by his failure to make money from his inventions. It was a good lesson.

“Today, most of our revenue comes from advertising. We take pains to make sure that users know when something is paid for, and we work hard to make these advertisements relevant for users. Better ads are better for everyone – better information or offers for users, growth for businesses, and increased revenue for publishers to fund better content.”

Page rounded off his letter by pointing out that a key driver for himself and Sergey Brin and the workforce at Google is to do the impossible, highlighting recent breakthroughs, such as a self-driving car that allowed a legally blind man to drive for the first time and Google+ Hangouts which allow multiple people to join in the same videoconference.

“Today the opportunities are greater than ever. Things we used to think were magic, we now take for granted: the ability to get a map instantly, to find information quickly and easily, to choose any video from millions on YouTube rather than just a few TV channels.

“People are buying more devices and using them more because technology is playing an increasingly important role in our lives. I believe that by producing innovative technology products that touch people deeply, we will enable you to do truly amazing things that change the world. It’s a very exciting time to be at Google, and I take the responsibility I have to all of you very seriously,” he concluded.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years