Is Google in Trouble?

The Google logo is displayed during the "Google Impact Challenge - Source: Toshifumi Kitamura AFP/Getty Images

The Google logo is displayed during the “Google Impact Challenge – Source: Toshifumi Kitamura AFP/Getty Images

Google seems to have its fingers in just about everything. The company has grown from a garage in California to one of the most valuable firms with the world. Google dominates the Internet search market, publishes world-class communications and mobile operating software, and has reached deeply into areas like robotics, self-driving cars, and home automation.

This mix of search dominance and aggressive investment in new technology has made Google look invincible for years, but the search giant has started to show some wear and tear. For one, Google lost its spot as the default search provider for Firefox, which has had a bigger impact than many expected. Between November and December, Google saw its share in the search market decline by 2.1%, and it now sits at 75.2%, according to Geekwire. Bing comes in second, with 12.5% (a 0.4% increase), and Yahoo with 10.4% (a 1.8% increase).

Google is still worlds ahead of its competition, but this loss of search market share demonstrates that Yahoo and Microsoft, which are part of a business alliance in the search industry, can make ground against the company.

As its market share in the search industry declines domestically, Google is still facing serious legal issues abroad. News has been trickling in over the past month or so that the European parliament, which has been at odds with Google in the past, actually feels that the company is too big and has too much power. Small Business Trends reports that there are rumblings that the European Commission wants Google to break up its business — that is, separate its commercial business activities from its search business.

The men of Google, in one of the company’s self-driving cars – Source: Google

This antitrust threat could cause some major headaches for Google. Microsoft faced a similar issue in the 1990s and early 2000s, and the case did the company plenty of damage and wasted resources in fighting off the government’s case. Though nothing has been decided, it’s yet another threat that Google is having to stare down.

Despite Google’s advances, innovations, and promised new products, the company still relies heavily upon its search business to stay afloat, and it is facing threats on that front. The rise in other services for product information — such as Amazon or store-specific mobile apps — has also led to a decline in search traffic. Add to this the fact that Facebook is aiming to steal some of YouTube’s marketshare, and Google’s grip on search starts look less commanding.

The fact of the matter is, the bigger Google gets, the more problems it’s going to have. Since the company has expanded into so many markets and industries, the issues are just piling up. This has led some analysts to question whether we’ve reached “peak Google.”

What may be happening is that Google has simply spread itself too thin by concentrating on too many projects at once. That’s probably part of the problem, but Google was also bound to start losing market share in the search advertising game at some point. But is what we’re seeing indicative of a more serious problem, or does the company simply need to regroup and focus on its strengths?

That’s near impossible to answer, but it’s also not fair to assume Google is dead in the water. After all, its self-driving car technology is set to break out over the next few years, as is Google Glass and other wearable tech. Android still has a huge share of the market in mobile computing, too. Even with all of the bad news, there are bright spots to focus on.

Still, for Google, there’s only one bad thing about being on top: There’s nowhere to go but down.

Follow Sam on Twitter @Sliceofginger

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