Google, Spreading Itself too Thin?

As businesses today find new and innovative ideas, products, and services in order to differentiate themselves and stay competitive in today’s increasingly dynamic market, some businesses may end up in a tumultuous path of mistakes, low quality products, or even failure.  Such issues arise as companies differentiate beyond their core competencies and ultimately spread themselves too thin.  Can these companies who branch into multiple markets maintain their core competencies and key advantages without hindering the quality of their products in order to stay competitive let alone successful?  While it has been done successfully, as seen with Robert Branson’s Virgin brand, some concerns are presented that Google may be spreading themselves too thin.  Is it possible for Google to “organize the World’s information and make it universally accessible and useful while remaining a competitive threat to nearly every company in the information technology industry” (Google Inc. 2010)? Maybe the company’s biggest threat is itself. 

Google’s largest revenues are driven from its core business of operating as a search engine.  Remaining competitive with other large, successful search engines such as Yahoo! and MSN, while simultaneously evolving the quality of its search technology and search results is a continuous process.  However Google manages to find a way to tackle multiple markets by devoting time, effort, and resources to these non search areas of business, such as their most recent entrance into the mobile phone industry.  With powerful competitors who are constantly searching for ways to capture Google, it may be that Google’s efforts in non search markets can eventually become a distraction from its core business.  In an industry with limited switching costs and the bulk of Google’ revenues allotted from usage within the core business, a decrease in quality within their search engine or an increase in popularity of a competitor’s could drastically impact the company’s financial structure.  

So why is it that Google has entered the development and direct sales phases of the Nexus One mobile phone?  I'm not sure many people have the answer to that! With a large number of Google's efforts and resources catered to this new endeavor, should we prepare ourselves for Google's demise or will Google continue to impress us with its technologies and far reaching capabilities?