Get ready for a storm

Google has finally failed to impress.

Yesterday’s earnings announcement sent their stock into a rare freefall, bidding down 6% in after hours and early trading today. At this point, late in the day, they are still down over $25 a share. That has to hurt.

Here’s the point. It had to happen. As Mark Cuban likes to say, “you can’t just hold hands and sing Cumbaya and expect this market/stock to go up forever.” Eventually, limits to growth create a moment of reality. Finally, the Googlers failed to exceed expectations and blow out another quarter. And are the investors riled!

I’m sure there is some long faces on the Google campus today. Several of them are now Gurglers — this was a phrase we used at Yahoo to describe an employee who’s millions in options were now underwater.

Will the Gurglers respond correctly? When I see corrections, and I lived through a mighty one at Yahoo, the real test begins now. Are they ready? Or will this create a set of internal conflicts, a panic and a huge market based distraction?

I’ll never forget the speech that former Sales/Marketing chief Anil Singh gave at the Yahoo sales conference in Spring of 2000. He showed a clip from Terminator, at the end, where the motorcycle cop tells the female hero that she’s needs to get home quickly; there’s a storm coming. After showing us the clip, Anil predicted that the market would correct. We were trading near the top of the market at that time, and Anil knew it. He asked us imagine how the bubble might burst. I mentally practiced, long before it really happened, how it all might go down. How the stock would go from $200 to $10 in a year. How our major dotcom ad buyers would dry up, leaving us to grovel at the feet of the same traditional advertisors we ticked off before. It was like self-inflicted torture, but I took Anil’s advice and started to mentally prepare myself. The exercise also got several of us hopping on plans to reach out to the post-bust group of Customers that would be left standing after the big storm. That was a good idea.

All of those things ended up happening over the next 2 years. Anil saved our bacon as a culture, because he had us imagine it first. He stole the element of surprise from the bear of the business cycle.

I hope they’ve done that drill at Google. Otherwise, the shock of the downturn could snap their mood state, like a surprise uppercut can knock you out. AOL, Excite and Qualcomm all the litter the highway of shocked and awed Gurglers that went into a tailspin when they got a B- on a report card. They didn’t believe there was a storm coming.

Recommendation: If your company is going gang-busters, get ready for a correction. Imagine the details and your calm response to them. Imagine their velocity and severity, yet your ability to weather them emotionally as you plan for the future. I know this flies in the faces with the Law Of Attraction, but in the business world, you can’t afford to be surprised by reality.