The Googlization of Everything

SFGate:

... Google invested $1 billion in AOL in 2005 to secure its advertising business and push aside competitors Microsoft and Yahoo. The 5 percent stake valued AOL at $20 billion.

But Google's announcement in an SEC filing acknowledged what many on Wall Street already believed: that AOL was probably worth something closer to $10 billion, reducing the value of Google's original investment in the company.

Trip Chowdhry of Global Equities Research said the admission by Google is a sign that the search leader has been largely unable to capitalize on its bets, be they investments, acquisitions or internal initiatives. He said Google has shown a knack for overspending on acquisitions like YouTube and DoubleClick, the online advertising company.

Google spent $3.1 billion on DoubleClick, the deal for which closed recently, and $1.65 billion on YouTube, which has yet to generate a profit for the Mountain View company. Now, with internal projects in clean energy, space exploration and a new mobile operating system called Android, Chowdhry wonders if Google has a winning recipe outside of its successful search business.

"Other than search, what has Google done right? They have 1,001 products in beta, but what's been successful?" Chowdhry asked. "There has been a sequence of missteps and failures, and this is not the end. They miscalculated the valuation of AOL, and this is the first time they're admitting to it."

Some analysts said there is some room for concern, considering Google's stock price over the past 18 months is largely unchanged. It suggests that outside of Google's core business, the company has yet to find additional ways to grow and drive new revenue. ...