Google seems to be entering the formidable teenage years and learning that it has talent but it can’t excel at everything — in other words, it can’t rule the world! Yeah, we all know that Google was touted as a prodigy because it revolutionized the search world with its search engine/friendly user interface. And it has been accustomed to constant praise - the latest comes from Harris Poll which exclaimed that Google has towered over Microsoft in reputation. But Google is hitting a wall as it tries to expand beyond search marketing.

Google’s business can still be summed up in two words — online search. It is heavily dependent on search to sustain itself (99% of Google revenue comes from search), whether through Google-owned websites or partners network. The good news is that Google’s business model will remain viable as marketers continue to invest money in advertising alongside search results. However, Google needs an alternate revenue source if it aims to protect its current position, much in the way that Apple is reliant on more than iPod/iTunes to generate revenue (Mac desktops and laptops sales are also responsible for Apple’s continued success). The problem is that Google can’t seem to focus on alternative revenue streams — in checking out future offerings on Google Labs one will find mostly search solutions. In my opinion, this is way too narrow of a focus if Google is to consider the future.

According to a recent Washington Post article, Google actually intends to focus on several areas this year, including mobile. And while mobile has produced services like Mobile Google Maps and GOOG411, a free directory assistance service, these applications have failed to generate significant revenue for Google (currently reported at only 1% of Google’s total revenue). And to add to this pain, news has surfaced yesterday via the WSJ that phones using Android, Google’s new mobile operating system (OS), are not likely to be available by the end of this year as initially promised due to integration issues and slow-going development of customized applications that run on the OS. While this should come as no surprise — The Street hinted of a potential delay earlier this month (Google denied that this would occur) — the delay is one additional setback in Google’s struggle to expand.

So what should Google do?

Again, the people at Google are bright so they must look at where the money is flowing to make a wise bet. And while enterprise applications seems to be a lucrative area (Google can just take on the evil Microsoft Office Productivity Suite), the elongated sales cycle and issues surrounding privacy (Google can now look at your data) along with industry regulations (Sarbox) should, if they haven’t already, make Google reconsider this option.

Another area that makes most sense is mobile. Why? Well, there are several reasons including:

• With mobile phone adoption reaching 50% (see article), Google has a potential market of 3.3 billion users worldwide to target with its new OS.
• Competition is virtually non-existent. Mobile marketing is still at its early stage so Google can get in on the ground floor. If it needs a catalyst, it can use its cash to buy a company.
• Mobile devices are undergoing a major transformation. Users have always complained that these devices are not user friendly due their small screen size and speed. But with the introduction of the touch-screen interface of the newly popular iPhone and investments in mobile data infrastructure/networks, users are finding that the new breed of mobile phones are actually useful replacements for their laptops.

There’s no better place for Google to break into than the mobile world — it is the greatest opportunity that it has in the pipeline. Google just needs to get  focused about mobile and show its peers that it can be successful at more than just selling online search. Otherwise, it may face the same future that the has-been Altavista has suffered and that’s rough, especially for a company that has so much talent and potential.