Critics love to beat up on government for its screw-ups and misfires -- as if these mistakes prove the point that the public sector can't do anything right. Exhibit A of late is the failed loan to Solyndra, which has been seized on as evidence that Washington can't create green jobs or do industrial policy more generally. (Never mind that billions of dollars in other loans by the Department of Energy have turned out just fine.)
Strangely, though, nobody ever pounces on the many flops in the business world to denounce the private sector writ large. This week, for instance, Google quietly announced that it is retiring Google Buzz, a networking feature that it spent tens of millions of dollars to develop and market but which never caught on. Did anyone argue that shareholders should downsize Google? Of course not.
Huge bets that go wrong are nothing new for corporations. Win some, lose some is the way that business works, as any executive knows. Just ask Rupert Murdoch who spent $580 million for MySpace.com and sold it earlier this year for just $35 million. (Or Gerald Levin who engineered Time Warner's merger with AOL.) The most extreme version of this crap shoot is venture capital investing, where the expectation is that most investments won't make money but a few will really break out.
Google's costly mistakes are worth noting because this company is often held up as the gold standard for smarts and creativity -- the very antithesis of the supposedly dense bureaucrats in Washington. But Google didn't just mess up with Buzz; it's had a long string of flops. These include other new features that didn't pan out such as Google Wave, Google Base, and Google X, as well as acquisitions that turned out to be duds, like Aardvark and Jaiku.
So, yes, even the genuises in Silicon Valley fail. (And let's not even get started on the quants who constructed the risk analysis models on Wall Street without seeing that it wasn't such a hot idea to back up mountains of leveraged bets with mortgage-backed securities during an obvious housing bubble.)
Nobody will miss Google Buzz, but its demise is a good occasion to reflect on the basic fact that all big institutions -- private, public, and nonprofit -- goof up.