Google's Crazy Christmas Gift to Microsoft and Yahoo

Google just gave Microsoft (MSFT) and Yahoo (YHOO) the best holiday gift they could ever have hoped for. The two companies have only one chance to remain players in the global search business, and that’s if Google gets so big, broad, and ambitious that it takes its eyes off the search ball. And yesterday’s much-ballyhooed Google entry into the energy business suggests that this is just what Google may do.

The backstory: Google is appalled at how much damage its power-sucking data centres are doing to planet earth, so it has now hiring an engineering team to produce electricity more cheaply than with coal. Is this noble? Absolutely. Do we hope Google succeeds for the sake of the planet? Yes. Is it a smart business decision? Are you smoking crack?

If Google had merely said it was doing any of the following, we would not be alarmed. Rather, we would be even more impressed by the intelligence and general goodness of Messrs. Page and Brin:

  • Funding a VC firm to invest in clean tech start-ups
  • Telling to invest billions in clean tech
  • Founding a separate company to create cheap power
  • Putting more solar panels on the roof.

Alas, Google is not just doing these things. Instead, it is apparently entering a completely unrelated business that has senior management’s full attention. How important is this new business to the company? The famously secretive Google even held a conference call to discuss it!

In a follow-up interview with the NYT, by the way, Larry Page provided a quote  that suggests that he really does think it is a smart business decision. This is possibly the dumbest thing the brilliant Page has ever said:

Mr. Page, in an interview, said that failing to investigate new businesses could hurt Google more than any potential distraction. “If you look at companies that don’t do anything new,” he said, “they are guaranteed never to get bigger. They miss a lot of opportunities and they miss the next big things.”

Get cracking, Microsoft and Yahoo. This may be the best chance you’ll ever have.

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