Google Inside

Last week, Sramana made a good point about how Google has not been reaching the vertical markets where they should be. Instead, Google has been staying very with horizontal markets, but they really have not created the strong vertical markets they need.

Google has a number of upcoming products still being released, such as Google Health (notice how the URL redirects and includes a service=health in the URL). But ultimately, I see the problem with Google is that they still do not have the vertical markets they should.

Here is a short noninclusive list of products that Google manages right now: Advertising (AdWords, AdSense, Audio Ads, Ad Manager), Analytics, Blogger, Calendar, Docs, Gmail, Groups, Talk, Video. Sure, Google offers a variety of products for consumers to use, for free, but they are still lacking the vertical make-up of these products.

I say the vertical make-up in the context that Google should be offering other products that line-up directly with these already-existing services. Google Jobs (maybe acquire SimplyHired), Google Travel (maybe acquire Kayak or Travelocity), Google Auto (maybe acquire AutoTrader), or Google Auctions (maybe acquire uBid or Webidz).

There are a number of places where Google could expand their web properties to be able to integrate them more seamlessly. For example, Google Maps could integrate into Google Travel or Google Autos to. Or maybe Google Health integrating into Google Travel or Google Maps to offer specialized services.

These added-service benefits would be great for Google to offer because it would extend their reach to the billions of consumers around the world.

What’s another reason Google should expand their verticals beyond what is already existing?

99% of all revenue generated by Google is through their advertising arm. That’s a very, very large percentage to weigh all of your revenue on. In Q1 of 2008, Google hired 889 people, “which is the slowest rate of new hires in two years. That follows a couple of quarters of what even Google admitted was too-rapid hiring.”

BusinessWeek also quotes Google CEO Eric Schmidt, “We’re quite optimistic about ‘08.”

That’s great that Schmidt is optimistic about ‘08, but what we really want to see is another source of revenue aside from AdWords alone. I hate to be cliche, but Google is certainly putting all their eggs in one basket.