How Google Decides to Pull the Plug

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for NYNepal.com

Published: February 15, 2009

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GOOGLE recently set the blogosphere abuzz by announcing that it was pulling the plug on several products.

The victims included Lively, a virtual world that was Google’s answer to Second Life; Dodgeball, a cellphone service aimed at young bar-hoppers who wanted to let their friends know where they were hanging out; Catalog Search, which scanned paper product catalogs so they could be searched online; and Notebook, a simple tool that allowed people to take notes on Web sites they had visited.

Google also said it would stop actively developing Jaiku, a microblogging service similar to Twitter, and instead turn it over to its users as an open-source project they could tinker with as they wished.

What’s that, you say? You don’t care? You couldn’t tell a Jaiku from a haiku, and the last time you thought about dodgeball was in elementary school gym class?

You’re not alone. When evaluating nascent projects, Google takes a hard look at interest — and in these cases, the interest simply wasn’t there.

“There’s no single equation that describes us, but we try to use data wherever possible,” said Jeff Huber, the company’s senior vice president of engineering. “What products have found an audience? Which ones are growing?”

All of the shuttered projects failed several of Google’s key tests for continued incubation: They were not especially popular with customers; they had difficulty attracting Google employees to develop them; they didn’t solve a big enough problem; or they failed to achieve internal performance targets known as “objectives and key results.”

You’d think that Google, a highly profitable engineer’s playground, would keep supporting quirky side projects as long as someone wanted to work on them. The company, which is best known to consumers for its search engine, is famous in business for promoting innovation by letting engineers devote 20 percent of their time to projects outside their main responsibilities.

But in this difficult economy, even Google is paying more attention to costs.

Profit-and-loss calculations play an especially important role in evaluating Google’s advertising products, which provide virtually all of the company’s revenue. For example, Google announced Thursday that it was ending an expensive effort to sell radio ads, laying off up to 40 people, because the project had failed to live up to expectations.

With services that don’t generate much cash, the company looks less at money spent than at measures of usefulness and the opportunity cost of devoting employees to one project over another.

So let’s take a look at the thinking behind a couple of the projects that Google recently killed or revamped.

Lively, Google’s entry into three-dimensional virtual worlds, was publicly unveiled last July. Four months later, when the company decided to close it, only 10,000 people had logged into the service over the previous seven days. That was well below the targets set by Google’s quarterly project review process, and far behind Second Life from Linden Lab, which had about half a million users in a similar period.

“We didn’t see that passionate hockey-stick growth in the user base,” said Bradley Horowitz, Google’s vice president for product management. Management decided that the half-dozen people working on Lively could be more productive elsewhere.

Dodgeball, a service that uses text messages to allow users to share their location with buddies, presents a different story.

Dennis Crowley, one of two co-founders who sold Dodgeball to Google in 2005 and stayed on, said that he had trouble competing for the attention of other Google engineers to expand the service. “If you’re a product manager, you have to recruit people and their ‘20 percent time,’ ” Mr. Crowley said.

He found the task especially challenging because he was working in New York, far from the Silicon Valley headquarters. He became frustrated and left Google in 2007. Mr. Crowley is back in start-up mode, developing a location-based service called FourSquare that will be available next month.

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