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Google’s strategy in 2008 22

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  • 1. Case Study
  • 2. CASE SITUATION Since 1994, the number of people worldwide accessingInternet has grown considerably (360 M in 2000 to 1,5 Bin 2008). To read news, conduct researches, buy online… This growth allowed internet advertising to become the2nd most common form used in the U.S. (search-basedads, video ads on YouTube and mobile search are amongthe largest portion of Internet ads)
  • 3. COMPANY OVERVIEW Type: Public Industry: Internet, Computer software Founded: in Menlo Park, California, U.S. (September 4, 1998) Founder: Larry Page, Sergey Brin Headquarters: Googleplex, Mountain View, California, United States Area served: Worldwide Employees: 53,546 (2012) Subsidiaries: AdMob, DoubleClick, Motorola Mobility, On2Technologies, Picnik, YouTube…..
  • 4. GOOGLE HISTORY
  • 5. GOOGLE HISTORY Google was developed in January 1996, by Stanford university computer science graduate students Larry Page and Sergey Brin. Google was named “BackRub” relating to its ability to rate websites for the relevancy by examining the number of back links pointing to the site. Later, the two founders renamed BackRub to Google (which means “googol” a mathematical term of the number 1 followed by 100 zeros) reflecting the mission to organize infinite amount of information on the Internet.
  • 6. GOOGLE HISTORY In August 1998, a Stanford professor arranged for Brin and Page to meet with co-founder of Sun Micro Systems, to demonstrate the search engine. He gave them a $100,000 Check. By the end of September 1998, the two friends raized a total of $1M capital from family, friends and other angel investors, in order to set up Google Inc.
  • 7. USERS TRUST BECAUSE… Consumers are loyal to the search engine which is the worldwide leader in Internet and Mobile search ads. Google is capable to retrieve highly relevant search results in a fraction of seconds.
  • 8. USERS TRUST BECAUSE… Manyof them find Google’s search results more relevant than those generated by competing search engines.( yahoo, ask..) The search terms-matching of Google is highly precise. The objectivity of the company.
  • 9. POSITIVE RESULTS FOR GOOGLE Internet users preference for Google’s boosted the company’s net income, revenues and profits. In 2008, Google control the search-based ads market .
  • 10. GOOGLE BUSINESS MODEL
  • 11. GOOGLE’S BUSINESS MODEL Its business model is successful since the net income of 2007 was 40 times greater than in 2003. Google business model generates revenue by providing advertisers with an opportunity to deliver online advertising, directly matched by keyword to a user’s search query. Google targets its ads to specific users using the user’s browsing history.
  • 12. THE THREE COMPONENTS OF GOOGLE’S BUSINESS MODELSearch Appliance Search technology integrated into a third party’s Web page or intranet. It delivers accurate search results throug a number of documents.Google MiniSearch Appliance is designed for small business. AdWords it’s Googles advertising product and main source of revenue. AdWords offers pay-per-click advertising, and site-targeted advertising for both text and banner ads. AdSense AdSense is used by website owners who wish to make money by displaying ads on their websites. When user click on ad displayed on a Web page, the advertiser pays Google and Google give percentage of that amount to the web page owners.
  • 13. GOOGLE ACQUISITION STRATEGY Since 2001, Google has acquired many companies, mainly focusing on small venture capital companies. In 2006; it used some proceeds of its IPO to acquire dMark for radio spot ads and Wrintley for web based spreadsheets software. Attracted many users by acquiring YouTube (2006) Acquired in 2008 DoubleClick, diversify from search ads and to generate revenues from banner ads.
  • 14. THE 10 PRINCIPLES OF GOOGLEPHILOSOPHY 1)Its best to do one thing, and do it well: “search” 2)Focus on the user and all else will follow: it does its best to provide the most relevant and useful search results possible, with simple interface, independent from financial incentives. 3)Fast is better than slow: it’s the only company in the world who want its users to leave its website as quickly as possible.
  • 15. THE 10 PRINCIPLES OF GOOGLEPHILOSOPHY (CONT.) 4)You dont need to be at your desk to need an answer: Google encourages users to use wireless phones to seek information 5)Theres always more information out there: Google indexed more of the Internet pages than any other search engine. 6)Make money without doing evil: Google Provide only “sponsored link” ads. “We will do our best to provide the most relevant and useful advertising, without any annoying interruption”.
  • 16. THE 10 PRINCIPLES OF GOOGLEPHILOSOPHY (CONT.) 7)Theneed for information crosses all borders: The mission of Google is to faciliate the access to information to the entire world. 8)You can be serious without a suit: foster fun challenge and highly communicative work environment 9)Great just isnt good enough: always deliver more than is excpected. 10)Democracy on the web works: Google rely on individuals posting websites to rank and give a value to other sites.
  • 17. GOOGLE STRATEGY AND COMPETITIVE POSITION IN 2008
  • 18. COMPETITIVE ADVANTAGES Speed, Accuracy, Objectivity and Ease of use. Fit between their technology and the consumer behavior. Page Rank technology – social network Orkut merged Positioned as a “Fastest Crawling Technique” Trade off between “Speed” & “Compression” Best asset utilization (Efficient storage space) R&D innovation ( Android)
  • 19. SWOT ANALYSIS STRENGHTS WEAKNESSES• Corporate Reputation & • Increasing costs compared toBrand Trust sales• Highly skilled employees • Dependence on advertising• The speed and simplicity of businessits search engine • No other cash flow source• Huge cash reserves than advertising• Profitable business model OPPORTUNITIES THREATS• New internet devices • Increased competition in the• New advertising platforms search engine market• Increase in worldwide • Privacy concernsinternet penetration increase • Business model imitatorsthe total user base
  • 20. STRATEGY TO DOMINATE INTERNET ADVETISING Since its IPO in 2004, Google acquisition strategy and R&D activities  increased the company’s dominance in the Internet advertising. The addition of new features (Google Maps, Gmail, Book, Search, Blogger, Weather, Airline travel information…) increased traffic to the site and gave opportunity to serve ads to Internet users.
  • 21. STRATEGY TO DOMINATE INTERNET ADVERTISING Strategy of the company to dominate search- based advertising on Mobile devices had been successful (Google accounted for 63% of searches made on Internet-enabled phones) The company’s introduction of the Android O.S. for mobile phones allowed to increase the share of mobile search & expand the market to new Internet ads types.
  • 22. STRATEGIC OFFENSIVE TO CONTROL THE DESKTOP Google Chrome browser was launched in 2008 in order to accommodate cloud computing applications. The cloud computing allowed lower software acquisition and computing support costs, and better collaboration among employees. Chrome allowed Google to defense against Microsoft’s moves to make it more difficult for Google to deliver relevant search-based ads.
  • 23. GOOGLE’S INTERNET RIVALS The reason why Google was able to sustain its competitive advantage is its ability to maintain strong relationships with Internet users, advertisers and web sites. Google primary competitors are Microsoft and Yahoo.
  • 24. THANK YOU VERY MUCH…

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