Google refocuses on search business

Google has refocused its development activities in an attempt to channel more of its resources into its core search engine, Eric Schmidt, chief executive officer, said on Wednesday.

The move is part of what the Google head described as an effort to introduce a more “systematic” approach to the company’s management as it tries to deal with headlong growth.

The shift in emphasis to put more resources into search follows a period of rapid diversification that has seen Google launch a wide range of initiatives beyond its core business, from the Google Talk instant messaging service to a WiFi service in San Francisco. The company recently carried out its first systematic analysis of its development efforts and discovered that the proportion of work dedicated to search had fallen below its long-running 70 per cent target, according to executives.

It also comes at a time when Microsoft and Yahoo! are redoubling their own efforts to claim a bigger share of the search market.

Google executives denied that the realignment of their development work had not been prompted by the threat of growing competition in their core search business. However, commenting on the Microsoft and Yahoo, Mr Schmidt said: “None of the other competitors are emphasising the 70 per cent, which is search.”

By allowing all of its development staff one day a week to work on their own projects – something known inside the company as “20 per cent cent time” – Google has become a model for other technology companies looking for ways to become more innovative. While saying that they still aimed to give engineers free reign to promote new ideas, however, company executives said that they had shifted the balance somewhat in favour of a more centralised direction.

“We’re now taking the steps to encourage people – not telling them – to focus on the 70 per cent,” Mr Schmidt said.

The realignment was part of a broader initiative to build more coherent processes into Google’s operations as it gets bigger without at the same time burdening it with a new layer of bureaucracy, he added. “The goal this year is to systematise everything at Google,” said Mr Schmidt.

The company’s earlier system of encouraging engineers to develop new products and submit these for review by more senior executives had resulted in a “traffic jam” of projects as the number of initiatives multiplied, he added. As a result, Google has shifted the balance towards a more centralised approach to product development.

“We really did a full re-ordering around not what the engineers were doing but around product investment,” Mr Schmidt said. “It’s a different model and I think it works very well.”