Is Google Really Innovative?

Its a sensationalist title I know, but I couldn't resist the urge to respond to Rishi's comment that despite all the hype, very few innovative products have really come out of Google. A quick search (using Google :)) helped me find this link showing the market share of various Google products.

I completely agree with Rishi that Google has picked up some really nice products through acquisitions. However, I believe that a good acquisition strategy is almost as important to growth as organic innovation and in this respect Google is a real winner. Granted some of the acquisitions were based on very optimistic valuations, but by methodically acquiring some of the best web-based application companies, Google has indeed shown that it values innovation!

Now, the second aspect of Rishi's comments is more intriguing. Are Google's Research and Engineering teams really producing successful products? I have mixed feelings about this one. Google image search and Gmail were developed by Google themselves and have the second and third best marketshare amongst all their products. Though their marketshare is small, almost minuscule compared to Google search, they'd be considered very respectable for any other company. Besides, innovation and marketshare do not always go hand in hand. Apple, which has less than a 5% marketshare of the PC market is a great example of how innovation does not necessarily translate into marketshare.

That said, Rishi does make a very valid point that Google's Research and Development seems to be getting more mindshare than marketshare. We always hear about how tough the Google interviewing process is, how great an employer Google is, how every engineer is encouraged to devote 20% of their time to their own project, etc. The amount of press the products get pales in comparison to the "Google is Great" hype being generated today. Google is minting money through its search engine and everything else is insignificant to everyone - the press, the investors and most likely Google themselves. However, as a mature and very smart company, they are focusing on increasing their footprint and penetration of the web (which ultimately leads to more search revenues) through successful product acquisitions and also on putting a very positive spin on things :)