As Brand Value Slips, is Google Losing its Magic?

10 brandsOn Sunday, Millward Brown, a unit of advertising giant WPP Plc, reported that Google has ceded the top spot as the world’s most valuable brand to Apple Inc.

The search giant had held the title for the past four years. Google’s brand value actually declined by 2%; the only company among the top 10 brands to do so according to the study.

The latest indignity comes after Facebook Inc. overtook Google as the most visited website in the U.S. last year.

In April, investors sold off Google shares as the company’s first-quarter earnings report sparked concerns about its higher-than-expected expenses.

The earnings disappointment came weeks after Google co-founder Larry Page took over as CEO, kicking Eric Schmidt upstairs to executive chairman. Within days, Page had reorganized the company in order to streamline its product and engineering structure. As Google has gotten bigger, it runs the risk of losing the dynamic nimbleness that made it an Internet powerhouse in the first place. The recent management reshuffle was designed to bring the mojo back.

So what happened to the once almighty Google?

Analysts believe what we’re seeing is just an evolution in the ways in which consumers interact with the Web. Apple is fairly unique in terms of producing highly coveted and desired devices, particularly in the post-PC world.

As people increasingly flock to Internet-enabled mobile devices, Google’s dominance is not as apparent as Apple’s, whose sleek devices have consumers waiting in line for days to buy one.

In the meantime, Google has not strayed much from its core search business.

While Google is branching out, with offerings such as its Android mobile platform and Google Chrome browser, it has been slower in putting these pieces into place, making it seem like disparate experiences.

Part of the challenge is that some of Google’s competitors have faster momentum.

According to Nigel Hollis, chief global analyst at Millward Brown, “Google has held its ground, and Apple has accelerated dramatically. Extendibility is one of the keys — moving out of the category it’s already in and into other arenas.”

Apple once was a laggard, until it came out with the iPod, the iPhone and the iPad.

In the study, Google’s momentum score was 4, compared to Apple’s 9. Google tied with AT&T Inc., Verizon Communications Inc. and Altria Group’s Marlboro on momentum among the top 10 brands based in North America. It was surpassed by IBM Corp., McDonald’s Corp., Microsoft Corp. and Coca-Cola Co. General Electric Co. was the only top 10 North American brand with a lower momentum score than Google, at 2.

One of the main reasons Google has not accelerated faster is that its new initiatives are just starting to take hold but have not had much impact yet. Right now, Google is still highly reliant on revenues from search and doing their best to try and extend into mobile and social (networking).

Moreover, momentum among technology companies can shift quickly. Just look at how fast Facebook emerged to triumph over News Corp.’s Myspace. Google could come out on top once again.

  • I don’t think it means much. Apple was close to dying in 1990s but rebounded and is now #1. Look at the others on the list, IBM and Microsoft, they both ran into trouble (IBM in 1990s, Microsoft in early 2000s) but they’re still going strong.

    Losing the #1 spot isn’t the beginning of the end.

    • How is microsoft going strong? Apple(microsoft’s competitor) is crossing microsoft in everything. They are faaaar behind Apple unlike in the past.
      In case of Google, i hope its next yahoo.

  • Every thing has a trend. Being at the top is a dangerous thing as a lot has to be done in order to maintain the position. I think Apple, being on 1, does not necessarily mean success. The recent releases in product lines have not been as interesting and innovative as they used to be. I think, this is what marketing experts call maturity. We may seen the decline of Apple after this.

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