Over the last year or so, there has been a lot of discussion around where Google stands as an innovator these days. Clearly, the company has innovated a great deal since it was born, but a lot of commentary of late could lead one to believe that the Google pool has become somewhat stagnant in this regard.
I'm not saying that I necessarily agree with that, but the much of the company's focus in recent memory would appear to be based upon acquisitions and "me too"-type products. Most recently, an upcoming Google product called "Google Offers" came to light - an apparent Groupon clone. Such a product makes sense for the company, like an acquisition of Groupon would've made sense, but it's not exactly something people haven't seen before - at least based on what we know about it.
Google Buzz is another example of an original Google product, which hasn't generated the Buzz the company would have liked. That's not to say it's not a useful service and doesn't have its place, but it's not looking like it's going to be the next Twitter or Facebook.
Google's greatest successes these days seem to come from acquisitions (in terms of talent and product), most notably Android.
Jeff Jarvis writes in an op-ed piece for Reuters:
When I interviewed Schmidt a few weeks ago and asked about pressure over privacy, China, and lobbying, he said, "This is not the No. 1 crisis at Google." What is? "Growth," he said, "just growth."
Scale is Google's greatest skill and greatest challenge. It scaled search (vs. quaint Yahoo, which thought it could catalogue this web thing). It scaled advertising (vs. the media companies that today don't know how to grow, only shrink). It is scaling mobile (by giving away Android). It has tried to scale innovation (with its 20 percent rule)—but that's the toughest."
Perhaps the 20% should be bumped up to a slightly higher percentage. Keep in mind that products like Gmail, Google News, and AdSense began with 20% time. There would appear to be room for flexibility, as they seem to have the revenue thing down pretty well. The company reported revenues of $8.44 billion for the 4th quarter.
But, as has been widely documented, the company has lost more than a few engineers to one of its biggest competitors - Facebook. Google is faced by a growing amount of competition from all angles - whether that comes from Bing in search, Apple in mobile, Facebook in where web users are spending their time, or Groupon in the deals space. Obviously, it is Google that brings much of this competition onto itself, as it expands into established industries, but while the "me-too" services can sometimes prove valuable, the "next big thing" generally stems from innovation (granted, acquisitions can solve this to some extent).
Google has probably some of the brightest minds out there at its disposal, and giving them 20% of their time to facilitate new ideas has proven valuable for both consumers and Google itself. Maybe it's time to bump that 20% up a bit (even if it's not really a formal number). It could help Google create the next big thing, or even keep some talent loyal.
The company is in the process of revamping its management strategy, and it will be interesting to see the shape it takes, as half of the original Google brain takes the driver's seat.