Not Your Daddy's Google

NEW YORK (TheStreet) -- Way back in the 20th century (we're one-eighth of the way through the 21st) Google (GOOG) was a pretty simple company.

It was about search. The company's mission was to do search better, and to do search cheaper, than anyone else. To focus on search.

In focusing on search Google made a lot of investments. It bought dark fiber. It learned how to combine commodity servers into one big computer organism called "the cloud." It created innovative energy solutions. It put Google into a box for phone company offices and big customers. It became the cheapest way to do Internet stuff by a wide margin - the cheapest way to move data, to perform calculations, to store files.

It was in an effort to use this abundance that Google went into mobile. It bought a small company called Android, and used Microsoft's (MSFT) strategy from the previous decade to surround Apple Inc. (AAPL)with similar, but cheaper, phones and tablets.

But the business model remained the same. Google was, in financial terms, an advertising play, like a TV network or a newspaper chain. It created places for people to sell things, and sold those places.

Today, Google's path of search has reached a natural limit. Like Standard Oil in the 19th century it needs competitors to give the impression of an active market, which it dominates. So it's changing, and those changes are going to impact a lot more than Yahoo! (YHOO).

With the acquisition of Motorola Mobility, Google becomes a products company as well as a search company. Its Chromebooks and phones are both drags on its margins, but it must keep investing in them to keep OEMs like Samsung and Amazon.com (AMZN), in some sort of order.

With the launch of Google Cloud a few months ago, it's also a cloud company, competing directly with Amazon. It has brought in partners to compete more directly with the Amazon store, creating Google Shopping. With Google Play, it's now selling digital goods in direct competition with Amazon and Apple.

But the most fascinating transformation has just begun.

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