Is the era of supernormal growth for Google Inc over?

The phenomenal growth witnessed by Google Inc during the start of this decade is gradually slowing down. Google’s revenues had jumped 250 times in 7 years from 2001 to 2008 showing a compounded annual growth rate (CAGR) of 120%. The profits even fared better with the net profits in 2008 being more than 600 times the net profits in 2001 – a CAGR of 150%. However, Google’s revenue growth rate has been slowing down as its size is increasing. The annual growth rate which was more than 400% in 2002 has gradually fallen to about 30% in 2008 and in the first half of 2009 the growth rate was in single digit.

Has Google’s growth matured? Is Google’s supernormal growth phase behind us? It is quite possible as suggested by the trend in the growth rates. Google is now one-third the size of Microsoft and one-fifth of IBM. For a company that was incorporated only 11 years ago - growing to such a size is amazing. Continuing to show such phenomenal growth is not sustainable in long term. If Google can grow by more than 25% in next 4-5 years it would be a significant achievement. A growth rate more than that will require entering into other related businesses. Google has done it in past and is very capable of doing it in future. With plans of entering into the Operating System business which has Microsoft's dominance, Google has a huge potential opportunity which if it can unleash will help it grow even faster.