Google is discovering the pain of being an innovator

Google released its Q1 numbers last week. Even if the stock price declined 5% on slowing growth, the results are undeniable impressive: Revenues of 20,3 bn USD and YoY growth of 17% has few historical peers.

googlelogoHowever, it is interesting that 99,18 percent of all revenues come from  the advertising core business across platforms: web, mobile and youtube. The tiny 0,82% of revenues came from all the «Moon shots» Google has heavily invested in for at least 10 years and still only are capable of generating massive  losses of 802 million USD a quarter.

This means that even Google is realizing how tough it is to be an innovator focusing on diversification. If growth continues to shrink, disappointed investors will lobby to abandon anything outside the core advertising business. We will then know whether all those «moon shots» are a legitime pursue of diversifying innovation or just too a too expensive exercise in PR.

Forfatter: Salvador Baille

Daglig leder ved Intelis, et rådgivingsfirma med fokus på Innovasjon og teknologiledelse.

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