When asked recently, Eric Schmidt’s answer to the question was
It’s better to think of Google as a technology company. Google is run by three computer scientists, and Google is an innovator in technology in our space. We’re in the advertising business, 99% of our revenue is advertising-related. But that doesn’t make us a media company. We don’t do our own content. We get you to someone else’s content faster.
The question is central to many web service companies. What is our core competency ? What is a must for our future ? Are we technical, are we media, or are we marketing & sales deal makers ?
Choosing advertising and selling is extremely tempting. Operationally and day-to-day these skills and departments have the biggest impact on the bottom line.
But time again technology disrupts the market. Your core competency must be in whatever disrupts your market most. One constant, in words of innovation guru Seth Godin, is that safe is risky; you innovate or you die.
For web service companies, it is technology that is disrupting the market. You miss the boat in technology, even when your revenue is from advertising, and you are sunk.
from LA Times inteview of Eric Schmidt.