Unless you’ve been living under a rock for the last couple of months, you know that RIM, as a company, is facing some serious issues. RIM is becoming more and more irrelevant in today’s world, and is losing market share by the second. RIM may even go bankrupt in case its executives do not change direction and do not simply wake up.
Today RIMM (trading at $27.81, down $7.52 or 21.29% at this very moment) was slaughtered on extraordinary volume (10 times the average volume, which means that stock is gone). In my opinion, it is already too late for RIM’s management to take any action to salvage the company. In fact, any action taken now will be just to artificially pump up the value of the stock, and not save the company (like laying off thousands of employees, for example). RIMM will probably be trading in single digits (e.g. less than $10) by the end of the summer (at this point it can be an easy takeover target, perhaps by Apple). I am confident that RIM, as a company, is far beyond redemption.
I was just thinking, could Google face the same fate? Here’s why I’m saying this:
- Google has been trying to imitate Facebook the same way that RIM was trying to imitate Apple.
- It’s been a long time that Google has offered anything new when it comes search engine intelligence (the same way with RIM not doing anything new with its service).
- Google is undertaking ventures that are mostly flops, the same way that RIM is creating clumsy products that are getting poor reviews and reception by the public.
- Google has shifted management at the top level to respond to competition, replacing the previous CEO (who is now already a scapegoat) with a technical person who is clearly an introvert.
- Google is losing traffic to Facebook, the same way RIM is losing market to Apple and Android Phones.
- Google will soon face some serious competition in the online advertising world from Facebook, as the Facebook can display much more targeted ads than Google.
Of course, Google has still a lot of tricks in its pockets, it is still the most visited website in the world, and is the 4th most respected brand in the world, and the 1st most respected brand online. Not to mention, of course, that Google is sitting on a ton of cash.
But all that won’t matter, because Google now is doing all the wrong things that destroyed RIM and ignoring all the right things that made Google (innovation, being always ahead of the competition, not being evil, etc…).
Just think about it, Google’s only asset right now is its superior search engine, but what if Facebook comes up with a better (or even similar) search engine technology. Will Google be still relevant? Why would people go to Google if they can do everything from Facebook?
Google’s situation is at best awkward at the moment, and the investors know it: GOOG is down 18% so far this year.
Will Google survive? Maybe, but it takes a lot of luck, a lot of screw ups on Facebook’s side, a lot of work, and a lot change in Google’s corporate mentality. I don’t want to see Google die, neither anyone else that I know of, for that matter. I love Google and I hope that they will be able to make it through the storm, which hasn’t even started yet.
Meanwhile, if you’re using Google, try to search for “Should p” and here’s what you’ll most likely see: