My Sunday Washington Post Business Section column is out. This morning, we look at Google’s acquisition of Nest Labs.
My perspective is that Google is trying to avoid being disrupted or marginalized the way so many other tech companies have been.
Here’s an excerpt from the column:
“Perhaps the granddaddy of cautionary technology tales is Eastman Kodak. The film and camera manufacturer was so dominant that, according to a case study by Harvard Business School, in 1976 “Kodak controlled 90 percent of the film market and 85 percent of camera sales in the United States.” Astoundingly, it was Kodak itself that developed the digital camera in 1975. Fearing that digital photography would cannibalize its photographic film business, the company buried its own invention. That helped sales for the next decade or two, but, eventually, digital cameras came to dominate photography. Rather than own the future, they clung to the market share of the past. It should surprise no one that Kodak eventually filed for Chapter 11 bankruptcy protection.
None of this has been lost on the founders of Google, with their dominant position in search. Their acquisitions and research and development actions suggest that they are cognizant of how easy it is for a company to lose its grip on its primary market. This is especially true for dominant firms that became complacent — like Kodak, Microsoft and BlackBerry did.”
If we look at the 10 largest Google acquisitions, half are directly related to their core advertising, and none stands out as an obvious dog.
The full article is here
Defense! Why Google’s Nest Labs acquisition is a smart move
Washington Post, January 26 2014