Challenges faced by Larry Page 2

5 Challenges Google Chief Larry Page faces

New Delhi: Google co-founder Larry Page has now completed a full year as chief executive of Google since taking over from Eric Schmidt. He has used the time to consolidate and focus the internet search giant’s operations, especially on integrating its diverse verticals. As he heads into his second year, here are five key challenges that the he must tackle.

* Social media: After the dismal performance of Wave, the search giant last year launched Google+, its latest attempt to break into the lucrative social media space where it faces entrenched players like Facebook and Twitter. It is still far behind Facebook in numbers –over 100 million against Facebook’s more than 800 million. If it can migrate users from Facebook to Google+, it would shake up the social media space, not to mention grow its revenue.

* Hardware vs software: Google made a short-lived foray into Android smartphones, and is now reported to be working on selling tablet PCs online. On Thursday, it unveiled a prototype of its digital glasses that allow the wearer to take pictures, post them to Google+ and get directions. It is also acquiring Motorola Mobility Holdings for $12.5 billion. Unlike Apple, which is fully-integrated hardware and software maker, Google, like Microsoft, is primarily a software player. But can it pull off an Apple with its hardware experiments?

* Cash or Dividends: Given the recent shareholder discontent over Apple’s cash hoard of about $100 billion, Google will need to think carefully about what to do with its own pile. It has about $45 billion in cash & equivalents and short-term investments at the end of December 2011 And like Apple, it has not paid any dividends all of last year.

* Lawsuits –In the US, it is battling Oracle, which has alleged that the Android operating system violates its Java patents and is seeking hundreds of millions in damages. Earlier this month, the Australian Competition and Consumer Commission said Google engaged in "misleading and deceptive" conduct by allowing misleading paid advertisements to be shown with search results. It is also being investigated by Europe’s competition watchdog over how it ranks search results and whether it favours its own products over rival services. Legal trouble is never good for business, or investor sentiment.

* Revenue streams: There have been concerns over Google’s dependence on online advertising as a primary source of revenue, though the company has been able to grow its revenue over the years. To be sure, Google could be hit if a better search engine comes along or someone beats them at display or mobile advertising. Google doesn’t even charge a license fee for its popular Android operating system for mobile devices. Page will need to find innovative ways of growing revenues without adopting a licensing model like Microsoft. Remember, when Google started out, it was the not-Microsoft aura that everyone loved.

By: Tanmaya Kumar Nanda
Link: http://profit.ndtv.com/news/corporates/article-five-challenges-google-chief-larry-page-faces-301362