Oct 19, 2015 ยท 5 minutes

A decade ago, it seemed like everyone in the technology world was afraid of Google.

Flush with cash from its 2004 IPO, and looking for new sources of revenue beyond search, Google was engaging in or preparing for a host of new initiatives that had incumbents worried.

Back then, Google was experimenting with free WiFi and VoIP, putting telecom incumbents on alert. It launched Google Video, a threat to Yahoo and one that became real when Google bought YouTube in 2006. It was setting up an online-shopping service, moving into Amazon's and eBay's turf. Orkut looked for a while like a challenger to MySpace and Facebook. Google scanned books into searchable web pages and freaked out publishers. Its plans to develop an OS and productivity apps prompted Steve Ballmer to throw a chair across the room. 

Back then, Google seemed like such a formidable company that it didn't even have to launch something new to make other companies nervous. A mere news report that it might enter a new market was enough to make entire industries nervous.

Of course, a lot of those initiatives never really went anywhere: Orkut was a bust, and so was its successor, Google Plus. Froogle was an e-commerce service that is best forgotten, and nobody loses sleep these days over Google Shopping. Google Wallet never derailed PayPal. 

That was okay with Google, which saw itself as a power hitter who struck out often but just as often got extra-base hits, even home runs. Google Apps didn't kill Office, but it forced it online. And it did find a powerful OS in the August 2005 purchase of Android. Buying Pyra Labs made it a leader in blogging platforms – for as long as blogs were popular. YouTube made it the undisputed leader in online video for a long time.

Now that Google has blossomed into Alphabet - the new conglomerate of moon shots and newer businesses that orbit around the core ad business - the company is bigger and more ambitious than ever. The stock is up 31 percent this year, more than 10 times the Nasdaq Composite's measly 3-percent gain. 

So why, rather than being more intimidating than ever, does Google/Alphabet find itself less and less on the offensive and more and more on the defensive?

In a bit of symbolism that the company neither intends nor welcomes, the transition from Google Inc. to Alphabet Inc. is coinciding with another shift: from an adversary who threatens to eat everyone else's lunch to someone fending off a number of hungry bullies. What was Google the Terrible is turning into Alphabet the Vulnerable. 

The biggest immediate threat is Facebook, which has quickly built a walled garden inside a billion-plus mobile phones that isn't friendly to Google ads (not to mention other gardens like Instagram). Forrester reckons 13 percent of mobile time is spent on Facebook's ecosystem and 12 percent on Google apps (excluding browsers that also deliver Google ads). Facebook, which has been working on making its feeds more video-centric, announced this week a dedicated video site that sounds a lot like YouTube.

Amazon stopped selling Chromecasts in its store, a small but symbolic swipe in a growing rivalry with Google. The bigger threat Amazon poses is in search: 44 percent of online shoppers surveyed go straight to Amazon's site, while only 34 percent use Google's engine, a growing trend that worries the search giant. Amazon's Web Services is also going up against Google Apps and its own cloud platform.

Even Uber, which Google Ventures invested in two years ago, is driving into a long-cherished dream at the Googleplex, self-driving cars. Earlier this year, Google dropped hints that it may use its own driverless cars to taxi passengers, but Uber will have a large base of loyal passengers that Google lacks. Yet despite Uber's clear plans, Google uses vague and soft language in speaking of Uber as a rival.

Apple is also working on a driverless car but that may be the least of the new Alphabet's problems right now. The two companies have been both competitors and collaborators, but that has been changing as the race between iOS and Android has grown, in Eric Schmidt's view, “brutal.” Apple Music vs. YouTube/Play is another area of friction, as is Apple News vs. Google News. With each app, Apple whittles away the attention Google's apps need to feed it ad revenue.

The most serious blow Apple delivered to Google was the ad-blocking technology in iOS 9. iOS has only an 18 percent share of the global smartphone market, and some ad blockers may not affect Google ads. But it's still a serious blow because it marks a departure from tech giants passively bloating their way into each other's market. Apple is actively trying to hurt Google's core ad business, using the kind of rough tactics Microsoft applied in its early years.

Google – er, sorry Alphabet, it still feels weird to call it that – still presents a threat to other companies, mostly hoary old incumbents like overpriced ISP's competing with Fiber, mobile carriers worried about Project Fi, TV channels that are losing ad dollars to YouTube. 

But those are mostly companies outside of technology, chained to older business models. The companies that are defining or remaking the technology landscape are the ones that are the biggest threats to Alphabet. 

This doesn't mean Alphabet is fading as a major player in technology. Some of its more ambitious projects – artificial intelligence, life longevity, drone delivery and life science plays like glucose-sensing contact lenses could make it a leader in future, high-potential markets. 

But it does mean that, for the time being, the markets it's hoping to harvest post-search growth from to finance those initiatives may not prove as fruitful. Certainly not as fruitful as they would be if Google were the undisputed leader in a lot of areas beyond search.