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Can Google Lose its Labs Without Losing The Values That Helped them Succeed?

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I had hoped that my second blog post for FirstRain wouldn’t, once again, be about Google (you’d think that we’d all be sick of hearing about Google 24×7? And we may be, but sick in that ‘I-still-must-tune-in-and-see-what-is-happening-kind of way’ …). Still, I found myself captivated by their announcement this summer that they would phase out a major program called Google Labs by the end of September. And as we’re now approaching that shutdown date, it’s gotten me thinking again about this interesting decision.

For the most part, I’ve always been quite impressed by Google.  I am a long term Gmail user (Gmail has its own Labs, as does Google Maps) and I am still a firm advocate that Google+ will eventually be big (especially after seeing all the complaints of Facebook’s new design on my Facebook newsfeed the past two weeks). Google has launched so many winning products over the years that I was shocked to hear that such a successful and interesting part of Google was to be phased out.

For those unfamiliar with Google Labs, it was a playground for users who are interested in trying Google prototypes and providing feedback directly to Google Engineers. It allowed the public to freely experiment with pre-released Android apps, Google Maps experiments, Google Search betas and much more. Although, not all of these prototypes prove to be effective, it is still a nice way to get the public involved in ‘designing’ and evaluating some of Google’s most popular ideas.

So exactly why has Google decided to pull the plug on this program, when it seemed so many people (albeit, adventurous tech people) were benefiting from it? According to Bill Coughran, Google’s Senior VP for Research and Systems Infrastructure, Google is now beginning to prioritize their product efforts more strictly. And although some of their biggest products had started in Google Labs, they’re now focusing much more of their efforts into dominating the products already in progress, such as Google+. Google has decided that ultimately there are too many ‘small’ projects and they want to channel the company’s focus on the larger and, *cough*, more lucrative options.  By simplifying and focusing Google’s product line, Coughran said, more “extraordinary opportunities are ahead”.

The Google Labs decision is more than just phasing out a neat program, however. The last few years were spent testing potential golden projects. And they did this successfully. Google beat out competitors like AOL and Yahoo in numerous departments such as search, smartphones and Email (does anyone use AOL for email anymore?). And Google Labs has significantly helped develop some of these platforms. But the need is no longer necessary as the trial period is officially over.  What’s interesting is what a signpost this is for where Google is in their lifecycle as a company. Instead of the fun, pioneering tech startup playing in many sandboxes, looking for ideas and doing no evil, they’ve now evolved into a focused and mature company that—for the most part—knows its market, where the money is, and is coalescing around key products like Search, Gmail and Google+.

Now that the deadline is upon us, I was curious to check out the status of Google Labs, especially since I haven’t come across much recent news about the Google Labs termination. If you go to GoogeLabs.com, they inform users directly (no sugarcoating) that the Google Lab’s program is being phased out.  Also, it is obvious that many of the experiments have been visibly shut down.

Not all of Google Labs’ programs will completely disappear. Google claims that they will be integrating some of their better prototypes into many of their already existing experiments but the actual “Labs” name will be retired. The real question for Google now, is how they can retain the spirit of Google labs—that open sense of valued community feedback in a beat environment, now that their flagship vehicle for those values has been lost.

Financial Firms Fastest Adopters of iPad

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Interesting report from Good Technology was written up by Securities Technology Monitor today on the different rates of adoption of the iPad between different segments – and not surprisingly the financial services industry is way ahead.

Typically we have seen financial services be more conservative among our customers – especially when it comes to security and technology on the desktop (IE6 anyone? Ugh) but when it comes to facing the client the financial services industry has always been nimble at creating the most attractive image. Having your financial advisor, or your sales person, show up with an iPad has sex appeal and raises the client’s confidence that the advisor is on the leading edge. And the visual appeal of the iPad’s crisp, clear screen would make almost any performance charts just look better.

Good’s fourth quarter report shows that in the battle between iOS and Android tablets the iPad is taking share – activations climbed from 60% to 68%. Blackberry is not included in the study since Good’s value to their customer is adding Blackberry-like security to non-Blackberry devices. It will be interesting to see what changes, if anything, once RIMM has a competitive tablet.

The analyst and his time challenge

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Guest post: Michael Prospero, Director of Research at FirstRain

As an analyst, one of the things I struggled with was the vast amount of information coming at me each day. A large part of my job was to read anything from or about my companies, competitor companies, industry bellwethers, thought leaders and of course the overall economy.

I set up Google alerts, but depending on the companies/stocks I entered I got a lot of junk both old and irrelevant. Also, there still isn’t a way to set up the types of sources you would like to read (e.g., no press releases or wire news) — the number of sources alerts covered is relatively small. The stated information from Google is that it watches more than 4,500 English-language news sites. and the number of alerts can become annoying if you have large portfolios of companies you’re tracking.

Additionally, I would have my stock ticker service up on my screen with the stock prices of my portfolios and this would provide an icon if there was news on a stock I had set up on the screen. A large part of my day was spent reading financial publications, checking news from the alerts on my companies, talking to customers and companies. When I had time in between those tasks, I spent my time working investment ideas.

As you read, you come up with ideas (idea generation), which leads you to search for other stories to either support or invalidate your theory. To find those stories, you would of course use Google search. Obviously, Google is very good at finding content, but because it’s most every source on the internet, you have to really hunt for something interesting and timely.

Oftentimes, you will find an article that is exactly what you were looking for in your search only to realize that it’s from 2006. Google search is comprehensive, but it’s tedious and extremely time consuming to dig through the clutter of totally irrelevant as well as non-business relevant content.

It’s been nearly three years since I was an analyst now and the one thing that has drastically changed is the number of blogs (and overall number sources on the internet) and their authoritativeness. In the beginning, the number of blogs was sparse and at best the authors of them were questionable. Now, we have blogs from extremely knowledgeable, connected, intelligent people and micro-blogging (e.g., Twitter) is yet the next step in the evolution of news.

So this leads to why I am at FirstRain: I believe if a system could have gathered all of the news that was business relevant, categorize it by company and topically, and allow me to personalize its delivery along with other preferences, it would have helped my process enormously. I could have spent more time on the phone and more time working on idea generation. Time spent on new ideas rather than time spent covering your butt is the way to create alpha.

Yahoo layoffs will add to the management exodus

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I did some interesting analysis of management churn in advance of the rumored Yahoo layoffs tomorrow. Check this comparison out:

We’ve seen (and I’ve blogged about) the brain drain at Yahoo, but over the past few months it’s continued and it is dramatically severe when compared to their competition and other major tech players. On this chart red is detected departures – that means it’s visible somewhere on the web whether announced or not; green is detectable arrivals. The right hand column show the data normalized by number of employees.
And looking at the last month’s worth of data, Yahoo managers aren’t necessarily leaving for big names, they are just getting out!
And a side oberservation – Microsoft has turnover but relative to the size of company it’s not critical — but HP shows what a stable company it truly is. Some turnover as you’d expect but it’s insignificant relative to the number of employees.