People abandon the web, Google inserts it into their apps

Here is a German version of this article.

Google has released a new mobile app for group communication called Spaces. But the heart of the app is not messaging. It’s the Google search. The central element of each group (or “space” as groups are called in here) is a sharing button, which by default opens what essentially can be considered the Google search. From there, users can enter any term to find stuff to share (through the Google search), or they can type a URL of a site to open directly within the in-app browser. Other sharing options accessible through a menu bar at the bottom are YouTube videos (surprise), locally stored photos and chat messages.

Google Spaces

Google’s approach is interesting. The company is famously under pressure due to the massive changes in user behaviour caused by the shift to mobile. Much more time is spent in apps than on the web and generally, people’s search habits are changing when on a smartphone. Instead of performing a Google search they might ask a friend (or a bot) on a chat app, they might directly open their preferred native app for shopping/information/news/music/videos/restaurant reviews/hotel bookings, or they might use the voice search capability of their smartphone (which on iOS is powered by Bing).

For the moment, the company is still doing well financially, generating large profits with advertising. But quarterly financial results always only capture the past. In this case, the past is not a good indicator for the future. Due to the described changes, the outlook has never been less rosy. Scenarios in which users are less in need of performing Google searches and are less likely to spend time on the open web present an existential threat to the company, for the obvious reason that it would lead to a massive decrease in advertising revenue.

The Spaces app is the second indicator arising within a few days about how Google plans to handle this situation: If people move away from the open web and subsequently forget about how deeply ingrained the habit of using Google for navigating the web once was, it has to bring the Google search and the web into native apps. This is what the recently released iPhone keyboard app Gboard is all about (for the moment US only). Gboard puts the Google search right into the keyboard of iPhone users and thus makes it available no matter which app they are using. It’s a smart idea even if it requires iPhone users to install the keyboard, i.e. it requires them to realize the need of having Google’s search functionality at their fingertips at any time. But it is fair to assume that a majority of the people still remember how valuable Google has been for them over the years.

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Spaces follows the same philosophy. It brings the Google search and the web into a native app which is not predominantly designed as a search app. Spaces’ claim is “Small group sharing for everything in life”. But those who would become frequent users of Spaces’ mobile app would, whether they want to or not, constantly interact with Google’s search. In that regard Spaces is different from Google’s previous unsuccessful forays into social such as Wave, Buzz or Google+. These were not primarily built to motivate people to use the Google search. Instead, these services acted as strategic products with long-term goals which were intended to increase the time users spent within the larger Google universe as well as to gather data. Back then, Google had the luxury of not having to worry about its core business. That’s different today. Google’s core business – search – is facing short-term threats, and neither the company nor its parent Alphabet have managed to come up with a new business which could offset a worsening financial performance of Google’s core business. As a result, Google is now trying to find new ways to keep people googling – wherever they are.

Right now, Google is fighting two battles at once: It has to come up with a new cash cow and while that process is going on, it has to keep its current cash cow intact. Which is becoming more of a challenge.

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