Google, Stadia and the Petro State Curse
Google announced changes to Google Pay a few days ago. This is yet another service that Google is pivoting, with seemingly no awareness or care of how it will affect their users. The one before it, announced a month ago, was Google Stadia.
When Google first announce Stadia, there was some hesitancy on whether users or developers will actually sign up to it. Google has developed a bit of a reputation, particularly in the consumer space, of releasing a service only to shut it down a year or two later. Evidence of this is the myriad of other services that were shutdown by Google when they lost interested in them.
So naturally people were wondering whether this service will be different. “Nothing to fear,” Google said. “We’re committed to keeping this one alive, just like Gmail, Docs, Music, Movies and Photos1. So sign up, spend money, and don’t be afraid to commit to the service.”
I’ve often wondered why Google acts this way. Surely they must recognised that this is damaging to their brand. David Heinemeier Hansson, or DHH, one of the co-founders of Basecamp, has given a pretty compelling reason why this might be: that Google’s success as an advertising company is similar to that of a petrochemical state, with the associated lack of need to invest in anything else:
Why bother investing in other industries when you can make so much money from shit that’s literally spouting out the ground? You have to be extraordinarily disciplined and well-functioning prior to finding such riches, if you are to stand any chance. Google has never been either.
(I recommend that you read the entire post).
This makes total sense to me. The cash from search and advertising is so large that there is simply no need to seriously pursue other ventures. Sure there’s the human element, on wanting to be more than just a “middle manager in a petro state”, but that’s not necessary for the success of the business. So why spend the money or effort on working on something that will in the end be just a distraction?
Certainly something to think about next time Google releases a service.