Before Christmas I suggested that Google may have reached its apex during 2008, especially as it had, for the first time, allowed a dubious new feature – SearchWiki – to infiltrate the product that sits at its core – search.

And over the weekend, Google spent an hour saying that every site in its index was potentially harmful. This was the result of human error – namely, someone listing a harmful site with the URL “/” and this being treated as a wild card across the whole index.

I don’t really subscribe to the view that this was an apocalyptic error on Google’s part, but I do think that, like SearchWiki, it’s a small but significant example of the fallibility of Google search. And for a company with Google’s visibility, perceived fallibility can be every bit as harmful as actual fallibility.

As the year draws to an end and I retreat home to wrap presents and eat mince pies, I find myself wondering if 2008 will go down as the year in which Google’s fall from grace began.

Don’t get me wrong – there’s no way I’m forecasting doom for Google. It’s not Woolworths. But a large part of Google’s advantage in its decade of existence has stemmed from the unparalleled reputation it enjoys. Indeed, earlier this year it was named as the world’s most powerful brand for the second year running.

Why is its brand so strong? Google has always been a good example of a business that diversified without corrupting its core offering (in Google’s case, search). Yahoo! is a counter-example. As it acquired companies like eGroups and GeoCities, expanding its set of available services, it lost its central focus and gradually became bloated and flawed.

The increasing clutter of its homepage was a visual manifestation of this strategic drift. Google’s remained an appropriate distillation of its focus on search – even as it added mail, news, calendar, maps and other successful services.

Yahoo! and Google’s homepages from 1996 to 2005

But I think that this year might mark a turning point and that future historians might go as far as saying that Google jumped the shark in 2008, even though it saw off the laughable challenge from Cuil. Let’s look at some of the things that Google’s launched this year:

• Google SearchWiki – I’m listing this first because out of all Google’s product launches this has been the first to really impact its core offering, search. The idea is that users of the feature can manipulate and personalise their search results. Someone suggested to me that it heralded the end of natural search optimisation. My prediction? The feature will be gone within 12 months.
• Google Knol – Google’s “Wikipedia killer”. I don’t like basing conclusions on anecdotal evidence but, well… have you ever used it? The press hype around the Knol launch was driven more by negative attitudes to Wikipedia than positive ones towards this competitor. I don’t think Knol will be going away any time soon but I think it’s been something of a damp squib. I’d be interested to hear from anyone who uses it regularly.
• Google Chrome – Google’s “Firefox killer”. Like around 3% of the internet I installed and started using Chrome when it came out. However, I’m not among the 0.83% of the internet who are still using it. The only good thing about it is its start-up time. Apart from that I think Google should spend more time going after the likes of Apple and Microsoft rather than Wikipedia and Mozilla.
• Google Lively – Lively was full of fail. Launched in July as a competitor to Second Life, people who know about such things (e.g. not me) were immediately critical of Google Lively. Generous souls waited for subsequent releases to deliver improvements, but instead the service was officially killed in November 2008.

Oh yeah – there’s Jaiku as well, but I’m tired of writing bullet lists. It’s Christmas after all!

Google has a far from perfect track record when it comes to product launches and its policy has always been to develop experimental projects and see how they fare in the market. However I think 2008 has been different for two core reasons – one, that it has started to alter its core search offering (in the form of Search Wiki) and two, that many of these other launches do actually seem to be strategic as opposed to whimsical.

If it’s true that these releases have indeed been strategic, then the underlying strategy – whatever it is – is failing. Google is in danger of its brand being tarnished by failure. 2008 has been the year in which it’s become possible to at least envision a future Google that’s not a million miles from AOL or Yahoo!.

In this post, I’m going to try to outline a convergence between two separate trains of thoughts. It might get messy, so bear with me.

Train one (think of this as the Edgware branch of the Northern Line) is search engine optimisation.

One of the areas I’ve been working in a lot recently is search engine optimisation. I’ve carried out three fairly in-depth assessments of different search markets in the last few weeks.

It’s been an interesting learning experience in a lot of ways—the last time I was heavily involved in SEO was a few years ago and the tools available for carrying out analysis have come a long way since then. Perhaps the most potent new weapon in the arsenal of a search market analyst is Google Trends. Try it, it’s fun.

Train two (this is the High Barnet branch) is corporate social responsibility (CSR).

For a while now I’ve held the view that companies are not doing enough just throwing money at CSR initiatives—donating to charity, that sort of thing. After all, money isn’t the only thing that successful companies have to contribute. They are also rich in expertise and capability. Companies should therefore look for ways to apply their know-how to social problems.

An example of this that I often refer to is TNT Express Worldwide’s work with the World Food Programme. It assigns staff to work with the WFP and contributes its expertise in the fields of distribution and logistics, helping to manage the distribution of food in geographically remote and challenging regions. The value of this contribution is inestimably higher than it would be if it were purely financial.

And here’s where the two trains of thought converge. To torture an already stretched metaphor, imagine this as being Camden Town station.

Google launched Google.org some time ago as its philanthropic arm. It’s headed by epidemiologist/technologist Dr Larry Brilliant and seeks to do the sort of thing that TNT are doing with the WFP, namely using Google’s unique capabilities to bring a fresh approach to various social problems.

A great example of this is the recently launched Google Flu Trends, an analysis of how Google Trends can help point to flu outbreaks around two weeks than conventional epidemiological analysis.

It’s nice to see companies bringing knowledge and not just money to the table when it comes to health, hunger and other real-world problems.

Even though I’ve been known to use the phrase “Web 2.0” from time to time, I’ve never really liked the idea very much especially for using them as a high ranking seo service. It’s useful shorthand for when you’re talking to anyone whose knowledge about the internet is defined largely by current trends and ‘hypes’, but really, what’s ever been new about the idea of the web being a platform for user-generated content and social networking? Me and a lot of people I know have been using it for that purpose for nearly fifteen years already.

That said, there’s a case to be made for the validity of the phrase. There’s a combination of interactivity, interoperability and a certain visual aesthetic that can arguably be described quite aptly as “Web 2.0”. But in the last year or so the Web 2.0 brand has been becoming more and more “bubble-esque” as ‘coolness’ has started to outstrip utility within that world.

And as you will no doubt have noticed, we are no longer operating in an economy where coolness carries more weight than utility. The contraction of liquidity will lead to less and less investors being content to capitalise Silicon Valley firms with vapid business models. Products that don’t deliver clear operational value will find it much tougher to get funding.

All in all, it’s like 2000-2001 again, but writ large. The FT’s Lex column (login needed) reported this morning that if the equities markets recover twice as quickly as they did after the 1929 crash, hardly anyone currently over 65 will live to see them reach their heights of summer 2007. The economic climate of the coming years isn’t going to support the kind of culture that “Web 2.0” has become.

But is that really a bad thing? No, I don’t think so. The hardships that this industry experienced between 2000 and 2002 gave it a sorely-need maturity. And the next few years may do the same.

Even if its underlying concepts were never that new, “Web 2.0” has introduced the mainstream to a way of connecting over the net that was previously the domain mainly of people like me – geeks, to be blunt. There is now an opportunity for it to go through the same process of maturation that “Web 1.0” did all those years ago, and this will bring changes into how we create and optimize our websites, so using tools as WordTree reverse ASIN could be helpful for this.

Edit, January 2010: Interestingly the technology sector seems to have held up quite well despite the sustained global recession, which only now seems to be drawing to an end. Twitter might even have moved into profitability in 2009. There are still too many people marketing themselves as “social media gurus” but in general the big companies associated with “Web 2.0” have made well-informed and sensible decisions rather than turn into bloated dot-bomb throwbacks.

Online intelligence service Hitwise released a report last week claiming that UK internet usage patterns were changing in response to the current economic situation. The full press release is here.

Hitwise gathers its data by looking at the traffic logs of its clients’ websites, which number around 1,500. These websites are divided up into a range of categories and sub-categories. Hitwise is therefore aware of traffic volumes to sites in different categories, and has attempted to draw conclusions from changing patterns in these.

This methodology may be imperfect—1,500 websites may sound like a lot but is just a drop in the ocean—but the findings seem to be intuitively correct. For around a year now the subject of how a slowdown would affect online behaviour has been coming up more and more frequently, and the general consensus has been that online retail and price comparison sites are not going to be as exposed to the effects of a drop in consumer spending. Smaller household budgets lead to an increase in price-sensitivity, and price-sensitive consumers spend more time researching and planning purchases as opposed to buying on impulse.

An example of this in the Hitwise research is that traffic to what it identifies as price comparison, voucher or cashback sites increased by 20% between July 2007 and July 2008, after a slight drop in traffic to such sites between 2005 and 2007. Voucher sites seem to be the biggest beneficiaries (to the uninitiated, voucher sites collate promotional codes & vouchers from various retailers, which can be redeemed at checkout for discounts – here’s an example).

However, another contributor to this trend could also be quite simply that British people have become, on average, more sophisticated online shoppers. It’ll be interesting to look at how traffic to voucher and price comparison sites bears up when the growth phase of the next business cycle begins. Will those sites become the online equivalents of Poundstretcher, shunned by all but the most price-sensitive? Or will they remain the first port of call for the clued-up online shopper?

Here in the UK, Twitter has yet to seriously catch on although many organisations are attempting to make use of it. But the marketing and communications departments of large US companies are becoming increasingly aware of the need to establish a brand presence in Twitter.

The case of Janet, who masqueraded as an ExxonMobil spokesperson on Twitter before being unmasked as a fraud, demonsrates how even doing nothing can be damaging. Your brand can get hijacked and dragged through the mud while you’re busy formulating your micro-blogging communications strategy.

Here’s a list of brands that suck on, or simply don’t get, Twitter. It’s an evolving list – Starbucks, for example, got removed after responding to the blog post, showing that their Twitter account wasn’t merely “parked”.

Better commentary than my own can be found at Jeremiah Owyang’s web strategy blog.