Midway through an interview, Google Inc.’s chief financial officer pauses to play some hip-hop.
Patrick Pichette, the most senior Canadian executive at the world’s biggest search engine, wants to show off the video capabilities of Google’s newly launched Nexus 10 tablet, so he fires up the device loads a music video he has been watching lately on YouTube, and suddenly a small meeting room in Google’s brand new Toronto offices is jumping with bass.
“When we make hardware, we want to push [boundaries] on the display,” he says. “Look at that video, it has got to be awesome.”
In addition to balancing the company’s books, Mr. Pichette has become one of Google’s leading product evangelists – something that’s easier to do these days because Google is manufacturing a lot more products.
Almost overnight, a company best known for its Web-search algorithms has made a big move into the hardware market. This summer, Google made a series of product announcements, including a branded seven-inch tablet and a media server. Now, the company is also releasing a 10-inch version of its tablet and a new iteration of its Nexus smartphone.
In and of itself, the transformation gives Google access to a broad range of new revenue sources. But more broadly, the move to hardware also reflects an even more fundamental overhaul of the way Google approaches its core mission: search.
“We were good at crawling and searching documents,” he says. “But the world is not made of documents, the world is made of entities.”
Increasingly, Google’s competition in the online search space – where the company still generates billions of dollars in advertising revenue – doesn’t come from single-purpose search engines. Instead, the most lucrative portions of the search space now feature players such as Facebook and Twitter. Simply put, when it comes to search queries about what shoes to buy or movies to see, many users are more interested in recommendations from other human beings than they are in millions of machine-generated results.
Indirectly, that’s one of the main reasons Google has targeted the hardware market. At first, the company was content to give out its Android operating system, which is designed primarily for mobile devices. Third-party manufacturers, such as Samsung Electronics Co. Ltd., Sony Corp.and HTC Corp., could then do with the software as they wished.
But that changed when Google began working in close co-operation with certain partners on Google-branded phones and tablets. Mr. Pichette refers to those products, which include the Nexus line, as “reference” devices. Essentially, they allow Google to highlight, for both its customer base and its hardware partners, what Android features it believes are the most important. Android may be available for anybody to use freely, but Google can still offer indirect guidance.
“With reference devices, we can push the envelope,” Mr. Pichette says. He points to the Android feature that Google is highlighting with its latest round of hardware, a tool called Google Now. The software is designed to be contextually aware, recognizing where a user is, what their habits are, and offering specific information based on those clues. It is, in other words, an attempt to make Google’s algorithms act a little more like human beings.
As an example, Mr. Pichette shows off his own phone, which has recently recognized that he has travelled from his home base in California to Google’s Toronto office. The phone now shows the time in both locations, as well as the Canada-U.S. exchange rate.
“That’s not a big deal because I just travelled to Canada. But if you land in Uzbekistan, it’s very useful,” he says.