This became long post - warning :).
I glad I had time to read your post +Steve Yegge
. And I have to say I some what agree with your statement. Probably you understand this very well yourself, but I have to say that, what you are actually describing, is actually more fundamental problem, that might cause, and partly have been causing already, hard times for the Google.
Let me elaborate.
The bigger game of tech titans is ongoing as everyone knows. But the reality is that fate of titans is not going to sealed by only titans themselves and customers, but actually small players developing and innovating on top tools, and particularly platforms, tech titans are providing. As you clearly have them identified. For outsider like myself, one and the foremost major oddity of Google is the need to own and develop applications within the company, or alternatively insource existing applications by buying external companies that have implemented something viable.
I'll give you example. To be honest that is quite bullish strategy, and really disregards smaller players on market place, thus feels quite "evil" for average "tech" joe. Specifically since most of the services have nothing really new to offer, and they have not been created with mind-set "we could provide major improvement", but rather in "this is our version, we had to do it since others have these as well" way.
Think for example Music (in Beta), it is a music service developed by Google. It has taken focus, effort, time, resources, vast negotiations with records labels etc. All of those could have been spent on something else. And still to this date this service is only available for US markets only. After Google published it, Facebook quickly released simple and elegant music "platform" as well as contract with several major existing HIGH QUALITY music streaming services. They contracted with i.e. Spotify. For Facebook this was clear win; with minimal effort they got music integrated to their platform, for example NO heavy negotiations and politics with big record labels. For Spotify this was clear win as well, with minimal effort, they got access to Facebooks gigantic user base and paved their way to US markets. But I would argue that this was bigger win for Facebook, since now anyone that has idea of better music service than Spotify, can quite easily create that service and agree with FB to integrate that service to FB as well. Facebook just made themselves music platform, but not as music service provider. This is just one example. You have multiple others as well Facebook has mastered to integrate with and with minimal effort, i.e. Heroku, Netflix, Skype...
Facebook has actually within their culture to create a platform. But if I red you correctly in-between-the-lines you clearly have noted this yourself. I dont think nor believe +Mark Zuckerberg
has been sitting with his board of directors and made cunning plan to win over Google, but I believe they actually understand that they can't do and excel in everything. Thus they focus on what they are good at, and are really using market place to define the best killer applications that will be built on top their platform. When it comes to killer apps, NO-one can foresee what is going to be the next "Angry Bird", and it is not really smart move for any company invest enough money to really develop hundreds of thousands of applications. Or it would require monopoly, or oligopoly with high entry barriers. But as longs as you have the platform where that next killer application will run, you are bound to become the winner of the pack.
From organization theorety viewpoint, we are talking about network economy, where companies like Facebook and Amazon are the catalysts and integrators of the network. Lets examine Facebook, since it's actually Google's biggest rival currently. Facebook will stay as relevant as long as social network stay relevant, so likely for long time. It also means that they help smaller startups with awesome consumer offering can easily create traction on marketplace faster than we have ever seen before. It will also mean that they will lower the market entry barrier for new innovations. And it will also have potential to speed up innovation on related in unforeseen way. Practically this means that they are creating their "mini" economy, by interlinking companies to them in a way that it will be win-win situation for all participants. And from economical viewpoint they will become more indestructible than US investment banks
And, yes, Google has been getting a lot of negative specifically publicity recently, and I'm feeling and getting a lot of negative vibes on Google from different tech sources and industry followers. I think generally related to Google recent failures, but also to feeling that Google is not so open as some it's competitors and not that "less of an evil" it claims to be, and specifically is acting quite bullish in the marketplace towards smaller players with the help of big wallet. Google is unfortunately becoming ugly hairy corporation in the eyes of average "tech joe", and based on what I have been hearing from Googlers and specifically ex-Googlers, internally is becoming or partly is one already. Fortunately there is easy fix for becoming less of a corporate, but unfortunately that looks like it is not in-built in the culture. I hope that +Larry Page +Sergey Brin
and +Vic Gundotra
will understand need to change this culture before it's too late. Personally I have been witnessing a major tech company turning from fast and innovative tech power house into a slow and ugly corporate, and its is painful to watch. Though in personal level I am extremely lucky, since now I know how not to do that, and can help others to avoid those pitfalls ;).
I'm not bad mouthing here, just giving my biased opinion based on limited information openly available in marketplace. And no, I have never applied for a job at Google, so I don't belong into I-was-not-hired-guys, nor I hate your policies. Don't take me wrong, I could see myself working for Google, if such opportunity would rise. I actually sincerely hope that you guys will get things right there and learn before it's too late, since Google is great company and has developed and done favors to this industry in many levels you guys working as internals likely don't know even.