Google Fails, Again

What do Movie Gallery (Nasdaq: MOVI  ) and Google (Nasdaq: GOOG  ) have in common? Answer: They're both struggling in the video rental market.

Google's once-ambitious plan to sell and rent videos through Google Video, a cornerstone of the monetization plan when it launched Google Video last year, is coming to an end.

In a letter sent to previous Google Video shoppers, the world's leading search engine announced that it would stop supporting its platform that gave indie and major studios a digital outlet to sell movies, documentaries, short films, and television shows.

Going, going, gone
Frankly speaking, the service was a dud. My first impression was that Google Video looked awfully cheesy in trying to pitch $1.99 The Brady Bunch episodes, $3.95 NBA games, and $14.99 rock concerts and obscure flicks. It felt as if YouTube was trying to serve two masters -- being both Apple (Nasdaq: AAPL  ) and YouTube -- and that's a mixed message.

In the end, not a lot of people were willing to pony up the cash for Google's DRM-protected videos at prices that rivaled physical copies. It was a failure, but that doesn't mean that Google is better off closing the store now that it's irrelevant. If anything, the publicity has led to prolific tech bloggers like TechCrunch's Michael Arrington to bash the company for killing the service.

Michael's biggest rant -- that Google was eliminating the service without providing refunds -- was softened as users posted that Google was providing buyers with Google Checkout credit based on the amount they had previously spent on purchases.

But even if Google is doing the right thing by crediting shoppers who will no longer be able to access their digital video, I think closing down the shop is a bad idea for several reasons.

  • It eliminates a service that, if marketed correctly, could have been a Trojan horse to make Google Checkout a more popular financial payment platform.
  • Google is trying to get consumers to trust it as the place for Web-stored applications, but how confident do you feel if you're using Google Apps to keep your calendar, email, and spreadsheets going if Google can close down an unpopular service just like that?
  • Hungry studios never learned to market their Google Video productions, but giving the service another year or two could have produced a viral hit or two.

Proving Midas wrong
Burning down the store is wrong. Making matters even worse is that it now exposes Google Video as a tired site. Browsing through the Top 100 videos, you see the same sneezing panda, Webcam ad with the cheating girlfriend, and giggling toddler on a highchair that you saw several times last year.

Google may have bought its way out of this mess when it acquired video-sharing leader YouTube, but it's just one more example of the once-infallible Google losing its Midas touch lately.

  • Google closes its premium Q&A site as Yahoo!'s (Nasdaq: YHOO  ) free points-driven platform proves more profitable.
  • Google bumps its Froogle comparison-shopping site from the front page, only to rename it Google Products.
  • Despite its growth initiatives in China, Baidu.com (Nasdaq: BIDU  ) still commands a majority of that country's search queries.

Take the first few shortcomings, couple it with the inability of Google Checkout to bite into the market dominance of eBay's (Nasdaq: EBAY  ) PayPal and this week's video-store closure, and you begin to wonder whether Google is just bad at diversifying its monetization skills beyond the paid-search cash cow that it milks so well.

There's nothing wrong with being a one-trick pony, especially if that stunt is the high-margin goodness of online advertising, but why is Google so bad at selling just about anything else? It has the traffic. It has the brand. Am I the only one who can't wait for Google to launch a digital-music store just so it can close it down a few months later?

Google clips its personality
A Google advocate would applaud Google's move this week. If you can't be a niche leader, there's no point in embarrassing yourself by being mediocre. I get it, but why didn't Google go the other way with this? Most free video-sharing sites are offering high-traffic filmmakers and Webcam hobbyists ad revenue-sharing deals. Why couldn't Google simply have promoted its storefront as a way for prolific clip culture personalities to generate incremental revenue streams by selling premium clips through Google Video? Getting behind a few folks who really know how to market viral campaigns could have gone a long way to promote its fledgling platform.

But, no, Google decided to cut its losses again. Professional cinematography editors may leave their celluloid worst on the cutting room floor, but Google seems to be giving up on its Director's Cut a bit too soon lately.

For More Foolish coverage:

Yahoo! and eBay are Motley Fool Stock Advisor newsletter picks. Baidu is aRule Breakers recommendation. Try sampling any or all of the newsletters with a free 30-day trial subscription.  

Longtime Fool contributor Rick Munarriz is a huge fan of Google. It would be his homepage if it weren't for Fool.com taking up that piece of real estate. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 533864, ~/Articles/ArticleHandler.aspx, 10/25/2014 8:05:40 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement