Case google.pptx
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Google Financial Facts, Business Strategies, Strengths and Weakness, pay per click, Internet Advertising,
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Case google.pptx
- 1. Case 9: Presented by Team 8 The Back Corner Thursday, January 21, 2016 Robert Wise, Thao Bui, Tung Lu, Huynh Vo, Shirley Kaeratana Robert Wise
- 2. Agenda Component Speaker # Name Minutes Total Time Agenda handout 1 Robert Wise 1 1 Company Background 2 Shirley Kaeratana 2 3 Current News 3 Thao Bui 2 5 Financial Statement 4 Tung Lu 2 7 SWOT Analysis 4 Tung Lu 4 11 Case Questions: Question 1 2 Shirley Kaeratana 2.5 13.5 Question 2 1 Robert Wise 2.5 16 Question 4 3 Thao Bui 2.5 18.5 Question 5 5 Huynh Vo 2.5 21 Question 6 1 Robert Wise 2.5 23.5 Recommendations / Summary 1 Robert Wise 1 24.5 Quiz / Q&A Robert Wise 5.5 30 Speaker 1: Robert Wise
- 3. Founded by Larry Page and Sergey Brin in 1996 Corporate Office: Mountain View, CA Search engine was first named “BackRub” Specializes in cloud computing, software and online advertising technologies AdWords contributes to most of Google’s profits Motto: “Don’t Be Evil” Company Background Speaker 2: Shirley Kaeratana
- 4. US Marines don’t want Google’s Robot Dog A long time ago in a galaxy far far away Current News Speaker 3: Thao Bui
- 5. Financials: Google Stock Source: Google Finance Speaker 4: Tung Lu
- 6. • Revenue of 18.7 billion in 2015 (Microsoft 78 Billion, Apple 231 Billion, Facebook 12.5 Billion) • Google revenue 90 percent comes from advertising, and the rest comes from Google own website • Net income of 14.4 billion in 2015 Financial Facts Speaker 4: Tung Lu
- 7. Financials: Google Versus Competitors Source: Geekwire.com Speaker 4: Tung Lu
- 8. Financials: Google Cash and Short Term Investments Source: QuartzLaz.com Speaker 4: Tung Lu
- 9. • Market leaders in search engine: Google has been the biggest Internet search worldwide • Open source products and services: Google products can be used with any OS or mobile devices without any charge including Google maps, calendar, and drive. • Quality and customer experience: Google’s objects are to offer premium products, and solve customer needs and problems by providing excellent customer experience. Strengths Speaker 4: Tung Lu
- 10. • Relies on one source of income: more than 90 percent revenue of Google comes from online advertising. In the future, Google ‘s growth might decline or slow down because of their competition • Unprofitable products: Google has so many products and services that add no value to company profit such as Google reader, I Google, Google health, and Google notebooks. Weaknesses Speaker 4: Tung Lu
- 11. • Driverless electronic cars: Google has been successfully tested driverless car recently. • Google fiber cables: Google is currently testing fiber cables that can deliver Internet content faster than current providers. • Google TV: Google TV is new service that can offer TV programing, movies, and more across the home Internet connection. Opportunities Speaker 4: Tung Lu
- 12. • Competition from Microsoft: Microsoft is increasing its market share in Internet searches and becomes one of Google biggest rivals • Competition from Facebook: Social media has been real threat for Google in term of advertising. • Potential lawsuit: EU currently accuses Google by using its Internet search engine market to display its own services higher than competitors Threats Speaker 4: Tung Lu
- 13. Benefits searchers Searchers don’t mind being advertised to as long as the product fits searcher’s needs Benefits advertisers Offers a unique means of putting their message in front of audience Benefits search engines Enables search engines to support advertisers and searchers simultaneously Question 1: Pay-Per-Click Search Speaker 2: Shirley Kaeratana
- 14. Global spending on advertising in 2015: $537B Internet’s share of ad spending: $121B Percent market share: TV 40%, Internet 23.4%, Newspaper 15%, Radio 6% Big Ad Agencies (WPP, Omnicon, Publicis) Internet Competitors: Facebook, Yahoo/Bing, Microsoft, Apple Question 2: Comp Structure Internet Advertising Speaker 1: Robert Wise
- 15. Googles revenue from internet advertising: $59B (66% of the market) Methods of Generating Revenue: 1. CPC (cost-per-click) 2. CPM (cost-per-mille) 3. Revenue Sharing Question 2: Comp Structure Internet Advertising Speaker 1: Robert Wise Source: netmarketshare.com
- 16. Search Ads Display Ads Question 2: Comp Structure Internet Advertising Speaker 1: Robert Wise Source: Business Insider.comSource: Business Insider.com
- 17. Google’s Products: AdWords: revenue stream from advertisers AdSense: implementation of ads on mom-and-pop sites AdMob: implementation of ads in mobile aps. Google’s Revenues are safe: Population is growing at 1.4%; Internet 8-10% annually. Internet advertising (especially mobile) expected to grow. Question 2: Comp Structure Internet Advertising Speaker 1: Robert Wise
- 18. Question 4: Google’s Success and Future in Paid Search Source: comScore.comSource: comScore.com Speaker 3: Thao Bui
- 19. RESPECT USERS + Keep layout clean + Put ads separated GOOGLE ADWORDS: + Friendly feature + Flexible + Better service Question 4: Google’s Success and Future in Paid Search Speaker 3: Thao Bui
- 20. HUMAN RESOURCE: + Having top talents + Well working environment + Innovation Time Off TECHNOLOGY: + PageRank + Low cost computer Question 4: Google’s Success and Future in Paid Search Speaker 3: Thao Bui
- 21. What is Google trying to do strategically? Question 5: Speaker 5: Huynh Vo
- 22. Business Strategy : individual strategy Classic Approach – Adword Visionary Approach – Google glasses Corporate Strategy : strategic ambidexterity Umbrella Corporation– Alphabet Question 5: What is Google trying to do strategically? Speaker 5: Huynh Vo
- 23. TCP/IP (1982) DNS (1984) WWW, Tim Berners-Lee (1991) Mosaic browser (1992) Google Search Engine (1998) Question 6: Paradigm Shift Speaker 1: Robert Wise Source: singularity.com “Information Age”
- 24. Google Search Revolutionized the Internet: Changed industries: computers and internet (software & hardware) Social global culture Through: Algorithms, page authority, indexing keywords Question 6: Paradigm Shift Speaker 1: Robert Wise “Information Age”
- 25. #1 recommendation: Enter streaming TV market Maintain massive scale (maps, docs, gmail, etc.) Focus on mobile (Facebook, Twitter) Continue to press Yahoo!Bing for SE market share Compete in payments market (paypal) Recommendations Speaker 1: Robert Wise
- 26. 90% of revenue from advertising Innovative company: maps, docs, self-driving car Primary success is combination of: (1) Search Engine (1998) (2) AdWords (2000) Over 200 products improve Google’s “scale” Summary Speaker 1: Robert Wise
- 27. Quiz Question #1: Robert Wise
- 28. Quiz Question #1: Robert Wise
- 29. Quiz Question #2: Robert Wise
- 30. Quiz Question #2: Robert Wise
- 31. Robert Wise Quiz Question #3:
- 32. Robert Wise Quiz Question #3:
- 33. Quiz Question #4: Robert Wise
- 34. Quiz Question #4: Robert Wise
- 37. Quiz Question #6: Robert Wise
- 38. Quiz Question #6: Robert Wise
- 39. Q&A: Robert Wise
- 40. Backup Slide – Growth of Internet Speaker 1: Robert Wise
- 41. Backup Slide – Future of Ad Growth Speaker 1: Robert Wise
- 42. Backup Slide – CPC rates Speaker 1: Robert Wise
- 43. Backup Slide – Market Share Advert Speaker 1: Robert Wise
- 44. Backup Slide – Google Q. Ad Revenue Speaker 1: Robert Wise
- 45. 1. King of Internet Advertising Market 2. “Google” became an official word in the dictionary 3. Android now has a dominant 75% market share 4. Google + is gaining ground 5. Strong balance sheet 6. Positive on the stock Backup Slide – Reasons to invest in Google: Source: Google Finance Speaker 3: Thao Bui
- 46. Backup Slide – AdWords Auction ?? Speaker 3: Thao Bui
- 47. Backup Slide – SEO vs PPC AdWords Speaker 3: Thao Bui
- 48. Backup Slide – Under Alphabet Company Speaker 3: Thao Bui
- 49. Backup Slide – What Google Alphabet stands for Speaker 3: Thao Bui
Editor's Notes
- Introduce team
- Team members each assigned responsibility to stay on time. When timer reaches 28 minutes Robert will say “We have time for one more question” All team members have agreed that they will stick to this schedule and take individual responsibility.
- Larry Page and Sergey Brin first started Google in the year 1996 of January when they were both PhD students at Stanford University in Stanford, California while working on a research paper. Google specializes in internet related products and services including, but not limited to, cloud computing, software, online advertising technologies and much more. The new search engine was first named “BackRub” for the reason that the system would check backlinks to estimate the significance of each website. Later would they change the name to Google, which came from a misspelling of the word “googol”. The name Google was registered on September 15, 1997. What contributes to most of their profits is what is known as AdWords, which is an advertising service by Google for businesses wanting to display ads on Google and its advertising network. The AdWords program allows these businesses to come up with their own budget for advertising and pay only when users click on the ads. This ad service is mainly focused on keywords
- Google Robot Dog: name LS3, this dog likes robot with four legs will follow soldiers on the battlefield and design to carry heavy equipment up to 400lbs and to be able to pick itself up and carry on walking even when it falls over. However, US Marines rejected because the robot dog is too noisy and could give away their position when they are in warzone Starwar: when you search “a long time ago in galaxy far, far away” the whole new galaxy will open up on the search screen. The phrase brings up a scrolling yellow text on the back background, appearing as if a window into a deep space. Just like we are opening Star Wars movie
- Google stock is currently at $694.45 per share, and it’s stock is up 119% over last 5 years.
- .Revenues of $18.7 billion and revenue growth of 13% year over year; constant currency revenue growth of 21% year over year. .Net income of 14.4 billion in 2015 grew year on year by 41.45 %,
- Google revenue and profits is bigger than Facebook but less than Apple and Microsoft. Apple is still the strongest company. Apple’s revenue of 58 B was $14 billion more than the quarterly revenue of Microsoft, Google, Yahoo, and Facebook — combined.
- At Google, cash and short-term investments amounted to roughly $64.4 billion at the end of 2014, and it has been increasing around 130% over last 5 years.
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- Explain significance of internet advertising only being ¼ of todal advertising it benefits searchers by making it easier for them to look for items online. Because we use search engines when looking for a product or item online, the results that pop up on Google including the ads are often times highly relevant to what we are searching for online advertisers are offered an exclusive way to get their message and product out in front of their consumers who is purposely seeking out the advertiser’s product. In addition to this feature, advertisers also benefit by being able to measure the quality of traffic that comes from the search engine clicks, through search query. The paid-per-click actually allows search engines to support both advertisers and searchers simultaneously. As the advertisers provide the search engines with their revenue stream, the searchers are able to comprise their user-base.
- Explain significance of internet advertising only being ¼ of total advertising Who are big ad agencies in print and media (non-internet): WPP($15.6B), Omnicon($14.3B), Publicis($7.7B) Facebook is 2nd in market share, recently overtook Yahoo.
- Explain 3 models of pricing (CPC can be $0.50 or $100) Threats of Ebates, Fatwallet for revenue sharing
- * Discuss two types of internet advertising and significance to Google Discuss how display ads market leader is Facebook at 30% Display ads officially taking more than 50% of market between the two (threat to google)
- Sheer growth of the internet in emerging markets will support ad revenue for years As print-ad giants fall google will gain. Google purchased AdMob in 2009 (forward looking) for $750M, when mobile ad space was only valued at $416M.
- Google’s most significant competitors are Yahoo! and Microsoft Bing. As paid search has grown, all three have increased their investment in search. Both Yahoo! and Microsoft spent several years and hundreds of millions in R&D spending trying to improve their search engine technology and gain market share at the expense of Google. Yahoo! failed, and their share has declined, while Microsoft recorded small market share gains of around 2% after it launched its Bing search engine in 2008. However, Microsoft has never made any money in the online search arena—in fact, it has lost billions. Google was the dominant search engine in America with a 64.5% share of all searches, followed by Bing (19.8%) and Yahoo (12.8%).
- Respect users: Unlike many other search engines, which earns profits by mixing search results with sponsored advertisement or clustering loads of advertisement into the front interface, Google keeps its layout clean and simple, and only put advertisement in the form of keywords separated from the search result. These acts, which show respect to users, gain much support and popularity of the search engine. AdWords (Google AdWords) is an advertising service by Google for businesses wanting to display ads on Google and its advertising network. The AdWords program enables businesses to set a budget for advertising and only pay when people click the ads. On a search results page, you can tell paid results (Google AdWords) from organic ones because search engines set apart the paid listings, putting them above or to the right of the organic results, or giving them a shaded background, border lines, or other visual clues. The following figure shows the difference between paid listings and organic results Google AdWords: Friendly feature ( site design is simple for advertisers and users ) Flexible (gives customers the ability to customize their ad campaign based on their needs. Advertisers can set up specific keyword matches, which will allow advertisements to be directed to consumers looking for exact keywords.) Better service ( Google Adwords can be turned off any time. So if you run an online store and want to run a seasonal special, then Google AdWords is a great platform to use.) Faster than SEO, SEO takes 2-6 months to maintain or post new news, adwords only 5 minutes to put new information
- Technology: PageRank: This technology allows Google search engine to produced more accurate and relevant search results compared to other search engines such as yahoo and Bang. Low cost computer: ensuring that they will always have a duplicate in case they fail Human Resources: is one of the greatest assets of the Google Having top talents from all over the world: Google manage to bring innovations and maintain its leading technology level of its products. This maintains the prevailing position of the Google search engine in the market in terms of technology, creativity and design. High quality human recources: + well working environment : The comfortable working environment and the pride as a Google employee enhances the working quality and efficiency of the Google workers. + Innovation Time Off unique policy => create productivity, allows employees to spend 20% of their working time on projects that are not part of their description. This explains why Google search engine is keep improving all the time and sustainable
- Introduce question
- What is Google trying to do strategically? In order to understand what Google is doing strategically to make shareholder happy, must understand its present stance. Google has large portfolio of individual business inside its corporation. Each business unit has different competitive advantages, style, and competitors. Therefore, it cannot have a singular business strategy to meet all of its needs. Google allow each business unit to have its own approach to strategy and execution. For example, Adword (which google gains the largest revenue) focus on planning, and business model optimization. With businesses that bring forth novel ideas such as Google glasses, a visionary approach requires a team with speed and persistence to push the boundaries. On the corporate level, Google rely on Strategic Ambidexterity –ability to explore new business models while exploiting existing ones. By creating Alphabet, google’s new umbrella corporation, individual core businesses like Google Search and Youtube are sheltered from riskier and non-core ventures like Google X and Google Capital. This protect shareholder from risk while still allowing expansion within the corporation.
- Many technologies contributed to “information age”. Google is largest.
- Rapid game changer Cultures slowly merging as information is not restricted to regions Technologies that trumped competitors
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- * Google has MANY products, but advertising is their core competency. * We believe, strategically, that the “many products” are geared towards Googles goal of “massive scale”. The idea being, keep a huge percent of the population using Google and when a new product takes off, they’ll already have market share advantage.
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- Q&A
- Growth of internet will continue, current world pop 7B, internet users 3B
- Fastest growing sectors in advertising
- Average cost per click by industry 2014
- Googles main competitors in internet advertising space.
- Quarter over quarter AD revenue since 2008.
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- Refer to infographic for notes.
- SEO and PPC are based on opposite philosophies, with huge differences in cost, speed. But in the end, bot SEO and PPC want to focus on driving traffic, totally measurable and focus on relevant key phrases