While wiz-bang features draw in the new users and win hearts and minds, it’s the slow and steady grinding of features that wins the long-term profit streams. Unlike the perennial innovator Apple, Google does not even get the benefit of charging for its innovations.
Microsoft got this more than anyone. The value of product management and persistence pays off, and the little details matter. To not be bothered to put in a feature that makes a product convenient to use just because "it’s been done before" is a very concerning M.O.
Let’s not forget that Google is still very much a one-trick pony. It’s one of the best tricks in the history of business, but it is still mostly reliant on search and PPC ads as its sole source of revenue.
I will disagree with Jeff on one point …. Gmail is a great product from my perspective.
Anyway, it is a pause for conern, but I am not betting against Google just yet. Their core search francise is very strong and powerful, and the operating system alone would still make Microsoft a very valuable business. The key questions are how much growth driven from beyond the core search engine is baked into Google’s stock now, how much risk is there of the search franchise being compromised competitively, and how to factor in this issue of product management capability?
ADDITIONAL NOTE: this post has some interesting numbers.