We don’t know whether Google approach to management, and in particular its approach to innovation, is a cause of its success or a product of its success.

Good point.

[...] Many of the most innovative and successful of Google’s new ser­vices are, in fact, ones it has acquired rather than created. Those include the hugely popular video-sharing service YouTube, the Weblog publisher Blogger, the virtual globe Google Earth, the online word processor Writely (renamed Google Docs), the wiki developer JotSpot, the news syndication service Feedburner, and the Internet phone service GrandCentral. When it comes to innovation, Google is starting to look less like a sower than a harvester, less like an inventor than an exploiter. [...]

There are signs that Google is coming to recognize this problem. Over the past year, its management has begun tightening the reins on its organization, imposing some restrictions on the company’s freewheeling and free-spending culture. Late in 2006, in what CEO Schmidt called “a big change in the way we run the company,” it ordered its innovation teams to focus on fewer initiatives and reduce the overall number of products under development by 20 percent. An exasperated Sergey Brin admitted that he “was getting lost in the sheer volume of the products that we were releasing.” And when the company announced disappointing earnings for the second quarter of 2007, Schmidt put the blame on overhiring and announced that the company would be more conservative in expanding its staff in the future. Google is hardly staid, but it is growing up. [...]