CASE STUDY: GOOGLE STRATEGYAli BaranYavuz Karagül IN 2011Nihal Alsat
OUTLINE About Google Google’s Strategies Mission statement Competitive Position Vision Strategic Offensive to Control General Information Google’s Internet Rivals Brief History Financial Performances Initial Public Offerings Vertical Analysis Income Statement Performance of Google’s Stock Price Balance Sheet 2004-2011 Revenue Summaries Google Feature Additions 2005-2011 10 Principles of Google’s Corporate Philosophy Google’s Businesses Google’s Business Models Google Services and Tools in 2011 Google Search Appliance Adwords Adsense Google Apps Search to T.V. Business Ethics
Founders Larry Page and Sergey Brin met at Stanford University in 1995. By 1996, they had built a search engine (initially called BackRub) that used links to determine the importance of individual webpages.
About Google Larry and Sergey named the search engine they built “Google” a play on the word “googol” the mathematical term for a 1 followed by 100 zeros. Google Inc. Was born in 1998, when Sun co-founder Andy Bechtolsheim wrote a check for $100,000 to that entity –which until then didn’t exist.
Mission statement The Company’s mission to “organize the worlds information and make it universially accessible and useful.”
10 principles of Corporate Philosophy1. Focus on the user and all else will follow.2. It’s best to do one thing really, really well.3. Fast is better than slow.4. Democracy on the web works.5. You don’t need to be at your desk to need an answer.6. You can make money without doing evil.7. There’s always more information out there.8. The need for information crosses all borders.9. You can be serious without a suit.10. Great just isn’t good enough.
CEO and Chairman Larry Page, Google’s original CEO until 2001, took up the title again in April 2011. Eric Schmidt, now our executive chairman, served in the role for 10 years.
Google’s Culture Multiculture employs more than 19,000 people around the world. Favors ability over experience Hires people who are smart and determined Googolplex: Several café stations where employees can gather to eat free food and have conversations Snack rooms stocked with goodies ranging from candy to healthy foods like carrots and yogurt Exercise rooms Game rooms with video games, football, pool tables and ping-pong A baby grand piano for those who enjoy tickling the ivories
Google’s Culture Benefits package medical and dental coverage tuition reimbursement, a child care center, adoption assistance services, an on-site doctor, financial planning classes lots of opportunities to gather with coworkers at special corporate events. Non-profit works
Google Locations The headquarters in Mountain View, California, the Googleplex 70 offices in more than 40 countries around the globe.
What we do? Advertise on Google Optimize your website Adwords AdSense Adwords Express DoubleClick Learn with google +1 Button Google Offers Webmaster Central Google Engage Website Optimizer Improve how you work Managing Google Apps; online e- Chrome for Business mail, calendar, docs Google Payments Google Analytics
General business definition, Business Model basen CPI (Cost per Impression) or CPC (Cost per Click) Search results and Adv. Revenues $+28.2 billion in 2010 New ventures were becoming a growing priority with Google management.
B2B business solutions Advertise Online Publishers Earth and Maps enterprise Google Offers Google Ads Google Affiliate Earth and Maps Google Shopping Network Conversion Optimizer Enterprise Google Wallet Search Ads Maps API for the Google Trusted Stores For Agencies Business Display Ads Commerce APIs Google Engage Search Solutions for Mobile Ads Analytics Business Video and YouTube Agency Toolkit Google Analytics Search Appliance Ads Google Apps Content Analytics Commerce Search TV Ads For Business Mobile Analytics Site Search Google Affiliate For Education Conversion Analytics Documentation Network For Government Social Analytics Cloud services For Publishers Become an Apps Advertising Analytics Google Cloud Platform AdSense Reseller Webmaster Tools Google App Engine DoubleClick Consumer Surveys Webmaster Central Google Cloud Storage AdMob Google Consumer +1 Button Chrome TV Ads for Publishers Surveys Website Optimizer Google+ for Business Video Ads For Submit Your Content
Google’s strategy and competitive position in 2011 Google’s strategy is to dominate internet advertising by promoting new ventures and expanding advertising channels such as; Google maps, local search, airline travel information, weather, Book search, Gmail, Blogger, other features increased traffic to Google sites and gave the company more opportunities to serve ads to internet users.
Google’s Services and Tools in2011 Search features: Alerts: Get email updates on the topics of your choice. Blog Search: Find blogs on your favorite topics. Books: Search the full text of books. Checkout: Complete online purchases more quickly and securely. Google Chrome: A browser built for speed, stability and security Custom Search: Create a customized search experience for your community. Desktop: Search and personalize your computer. Directory: Search the web, organized by topic or category. Earth: Explore the world from your computer. Finance: Business info., news, and interactive charts. GOOG-411: Find and connect with businesses from your phone. Google health: Organize your medical records online. iGoogle: Add news, games and more to your Google homepage. Images: Search images on the web. Maps: View maps and directions. News: Search thousands of news stories. Patent Search: Search the full text of U.S. Patents.
Google’s Services and Tools in2011 Search features: Product Search: Search for stuff to buy. Scholar: Search scholarly papers. Toolbar: Add a search box to your browser. Trends: Explore past and present search trends. Videos: Search for videos on the Web. Web Search: Search billions of Web pages. Google Tools and Web Applications: Code: Developer tools, APIs and resources. Labs: Explore Google’s technology playground. Blogger: Share your life online with a blog. Calender: Organize your schedule and share events with friends. Docs: Create and share your online documents, presentations and spreadsheets. Google Mail: Fast, searchable email with less spam.
Google’s Services and Tools in2011 Groups: Create mailing lists and discussion groups. Knol: Share what you know. Picasa: Find, edit and share your photos. Reader: Get all your blogs and news feeds fast Google Tools and Web Applications: Sites: Create Web sites and secure group wikis. SketchUp: Build 3D models quickly and easily. Talk: IM and call your friends through your computer. Translate: View Web pages in other languages. Youtube: Watch, upload and share videos. Google Mobile Applications: Google Play…
Cloudcomputing Google also pursuing a cloud computing systems to change market productivity via such applications, Word processing, Spreedsheets, Presentation software As technological analysits claims that these applications improve the cloud computing experience and thus, it cumulatively expected to grow to $95 billion by 2013.
Cloudcomputing in the future Google’s senior management believed that, in very near future, most computer software programs used by businesses would move from local hard drives or intranets to the internet. Many information technology analysts agreed that could computing would become a common software platform and could grow to a $ 95 billion market by 2013. Moving software applications to the cloud offered many possible benefits to corporate users, including lower software acquisition costs, lower computing support costs, easier collobration among employees in different locations.
Rivals Google has wide variety of businesses, so they have lots of rivals ranging from AT&T to Microsoft to Apple… In order to sustain Googles impressive growths, the firm also concerning about new ventures and to be continue to grow in the digital arenas.
Financial Summary of MicrosoftOnline Services Business Unit
Location, Location, Location Google acquired digital mapping company Keyhole in 2004, and launched Google Maps and Google Earth in 2005. Today Maps also features live traffic, transit directions and street-level imagery, and Earth lets you explore the ocean and the moon.
Maps They believe that, the development of new internet applications offering advertising opportunities. Google Maps allowed Internet users to search and view satellite images of any location in the world. Then, they added, Real estate listings and short personal messages could also be linked to Google Maps locations. Location based promotional businesses have great opportunity (expected to reach over 60 billion in 2016), thus this makes streetfight within the strongest rivals Apple & Google.
Google Search Engine They expanded their search logic and improved search experience with adding specific searchs; Book Search, Music Search, Video Search, Google News to include archived news articles dating to 1900.
Google’s Search-basedStrategies Google’s search-based ads could be delivered to internet users in 41 different languages, more than 50 percent of the company’s 2010 revenues and traffic were generated from outside the U.S., and the percentage of sales from outside the U.S. Was expeceted to grow as Google entered emerging markets such as Russia, and China. China was a particularly attractive market for Google. Since it had more internet users than any other country in the world. (+300 million)
Adsense The AdSense program served content-relevant Google text ads to pages on Google Network websites. 60 percent of advertising dollars generated from tha ads. Google’s AdSense program also allowed mobile phone operators to share in Google revenues if text and image ads were displayed on mobile handsets.
Adwords Create text-based ads that would appear alongside Google search results. It’s a keyword targeting program that suggested synonyms for keywords entered by advertisers, a traffic estimator that helped potential advertisers anticipate charges, and multiple payment options that included charges to credit cards, etc. Larger advertisers were offered additional services such as, To offer suggestions for targeting potential customers and identifying relevant keywords, Google’s advertising specialists helped develop ads for customers that would increase click-throug rates and purchase rates. The bids could be made on CPI or CPC based.
AdWords In 2000, Google introduced AdWords, a self- service program for creating online ad campaigns. Today our advertising solutions, which include display, mobile and video ads as well as the simple text ads
Google Will Change WebMarketing in 2012 Google is poised to completely alter how websites market themselves over the next year. While easing users into changing search results pages, Google has also designed a new method for websites to structure data so that its crawler can better pull information. Semantic searchs will become the strongest point in web marketing searches. (Web 3.0)
Other revenue sources, Youtube (acquired 2006) Google’s business model was further expanded in 2008 to include licensing fees paid by users of its web-based Google Apps document and spreadsheet software.
Android In 2008, Google had launched Android. Android was not a phone but an operating system that Google made available free to any phone manufacturer wishing to market mobile devices with internet capability. Android core applications included Wi-Fi capability, e-mail, a web based calender, google earth maps, a browser, and GPS. Android is a mobile operating system which allowed wireless phones manufactures such as LG, HTC, Nokia, Samsung to produce smartphone businesses. (as Apple’s rival iphone –iOs-) In 2011, Android 38.1 percent market share.
The little green robot arrives:ANDROID Investments in mobile businesses; Google announced Android and the Open Handset Alliance, in 2007. In 2011, Google acquired Motorola Mobility for $12.5 billion, to gain advantage on patents & rights in order to enter smartphone & tablet computer industries. The growing mobile business allows new way of doing the business, such as, Banner ads and video ads display on mobile phones.
Mobile business opportunities In 2010, 5 billion people worldwide used mobile phones. The smartphone penetration is; %70 percent in U.S. %35 in Turkei Recently, Windows and Nokia targeted the basic phone customers and focus on to produce and distribute cheaper smartphones in order to reach mass basic phone users, thus they may expand their businesses both software platform and hardware tools & phone sells by opening new segments in the market. The growing percentages worldwide accessed the internet from mobile devices, and a rapidly growing number of mobile phone users were exchanging basic mobile phones for smartphones.
Google’s ecosystem strategy emerges as Google Play, replacing the Android Market Google has just announced that the Android Market is out, at least in name, replaced by the more wide-reaching Google Play. They’ve since added Google Books, Google Music, and Movies to the foray, and wanted a way to consolidate those efforts under a single brand name.
Google Chrome : the comicheard Word got out about Google Chrome a day ahead of schedule when a comic book introducing our new open source browser was shipped.(2008)
Google Chrome business In this sense, Google Chrome operating system launched in 2009 were developed specifically to accomodate cloud computing applications. With this software, google deliver relevant search-based ads to internet users. Google had entered into agreements with Acer, HP, and Lenovo to begin producing netbooks that would use the Chrome OS and Chrome browser to access the cloud-based Google Apps productivity software.
Gmail In 2004, Google launched Gmail. The approach to email included features Speedy search Huge amounts of storage Threaded messages (SMS etc.) Integrated services for free… (actually, as they said: “there’s no free lunch.”)
Google + In 2011, Google introduced the Google + project aimed at bringing the nuance and rtichness of real-life, sharing to the web, and making all of Google better by including people, their relationships and their interests. Afterwards, Facebook imitated the features and applied in next patches, thus recent facebook features are picked from the Google+’s abilities.
Broadcast yourself: Youtube In 2006, Google acquired online video sharing site YouTube. Today 60 hours of video are uploaded to the site every minute. Cat videos, Citizen journaism, Political candidacy, Double rainbows have never been the same.
Lobbying U.S. Google also lobbied heavily during 2009 and 2010 to encourage the Obama administration to adopt a “Net neutrality” policy that would require internet providers to manage traffic in a manner that would not restrict high- bandwidth services such as internet television. The company was also testing and ultrafast broadband network in several cities across the U.S. That was as much as 100 times faster than what was offered…
Struggles in China Google complied with government censorship requirements until early 2010, when cyberattacks originating in China stole proprietary from the Gmail accounts of several Chinese human rights activists. To avoid breaking Chinese law prohibiting the distribution of information not authorized by the govenment, Google agreed in June 2010 to stop the automatic redirects to its Hong Kong site. In 2009, 64 percent of internet searches in China were performed by Baidu, while Google held a 31 percent of share of searches in that country.
International strugglties Google for aiding China in its internet cencorship practices since its 2006 entry into China, authorities in the U.S., Canada, Australia, Germany, Italy, U.K., and Spain were conducting investigations into Google’s street View data collection practices. In late 2011, Google entered into a $500 million settlement agreement with the U.S. Justice department to avoid prosecution on charges that it knowingly accepted hundreds of millions of dollars in adv. From online pharmacies in Canada that unlawfully shipped controlled substances to U.S. consumers.
Initial Public Offering 19,605,052 shares of Class A common stock took place on Wall Street in 2004
IPO, the issue added more than $4 billionto Googles liquid assets.
Google Search based business model improvement process Google’s business model had evolved since they begun. 1. The 2000 development of keyword-targeted advertising. 2. Placement of highly targeted text-only sponsor ads 3. Targeting specific users based on the user’s browsing history 4. Mobile searching logic, thus location based ads. Highly accurate
Financial State of CompanyGoogle is in a situation in which itcan resist the economic crisis Performancand find new revenue e $35bnsources, both advertising and advertising Licensesnon-advertising and other During a revenues crisis, performa Explosion of nce advertising Internet gains market mobile the non- advertising shares. revenues Monetization of Online video the internet $20bn mobile audience YouTube moneytization increasesRevenue Revenue s s 2012