Google has diversified its business beyond its core search engine operations through strategic acquisitions and investments in new technologies. It restructured into a holding company called Alphabet to separate these diverse ventures. Alphabet's founders Larry Page and Sergey Brin have taken a visionary leadership approach, delegating responsibilities while continuing to fund innovative projects through their Moonshot Factory. Google remains Alphabet's most profitable core business through its dominant search engine and highly effective online advertising platforms.

1. CARDIFF METROPOLITAN UNIVERSITY
UNIVERSAL BUSINESS SCHOOL
Name: Priyakshi Nandrajog
Subject: Strategic Management
Topic: Diversification at Google

2. 2

3. 3
Executive Summary
Diversification refers to the corporate strategy of entering a new market, in which a company
originally doesn’t operate. Google has an effective corporate business strategy as it has
diversified itself and created new markets by retaining existing customers and making a strong
internet user base of Google dependents. The internet giant has successfully been able to
capture the online segment and cater to all Internet related needs of the users.
The company commonly known as Google is now a subsidiary of a parent company known as
Alphabet. The brand “Google” is the largest among all its companies and includes services like
Google Ads, Apps, search, maps, Android etc.
Alphabet is a large company holding few less related business divisions such as Calico
(research project- Biotech), fibre internet services, Nest the thermostat and many others. The
founders of Google are known to follow Warren Buffett’s path. But as always, the company
does not allow easy comparison, it is surely not becoming Berkshire Hathaway, but is trying
to pacify investments, and preserving the concept and unique theory of Google as decided by
its founders. By continuously diversifying taking strategic decisions in different segments, the
company decided to come under a parent company Alphabet Inc.
Key Words: Google, Diversification, Leadership, Restructuring, Core-competence,
Advertisements, Search

4. 4
Introduction
Google is an American multinational technology company headquartered in California, it is
specialised in products and services related to the internet, which include search engine,
advertisements, maps etc. It is considered in the Big Four technology companies of the world.
The company is one of the most influential companies in the world. Google has been successful
in shaping the digital information age. Shareholders were rejoiced when Google declared the
formation of Alphabet Inc., its holding company which separates its bread-and-butter
businesses like, such as YouTube and Google maps from less related ventures like Google
Capital and GoogleX (Harvard Business Review, 2019).
The brand’s new URL abc.xyz describes two things: a collection of alphabets that represent a
particular language. Whereas, Alphabet has another meaning which is “Betting on alpha”
referred to as investments on projects which might have low probability of success. Moonshot
project by Alphabet called the Project Loon deals with providing internet connectivity in
remote areas (Harvard Business Review, 2019).

5. 5
Critical Analysis of Diversification at Google
Google was founded in 1998 as a search engine which was its main service since the beginning,
but later in approximately two decades the company diversified its presence in various products
and services related to internet. Few of its services are: Google Maps, hangouts, Google
AdWords, Google News, Google drive, Gmail etc.
The company offers free services to its users whether its document management or phone calls,
its products and services hold distinguished quality and features which helps it to corner diverse
internet users and make them reliant to a certain extent. Every individual is attracted towards
Google’s free services, which has indeed been advantageous for advertisers who pay Google
to target the same audience it targeted with its free services and benefits users with its feasibility
and smooth transition between different services with single account as access point (Pineda,
2019).
Google has not only diversified into different Internet products and services but also expanded
its operations in unrelated businesses like Project Loon and Waymo which is a project of
introducing a self-driven car. Just like any other company with deep pockets, strong and
established industry infrastructure, Google believes in Acquiring and expanding into different
ventures related to technology (Pineda, 2019).
The company has effectively spread its reach in the Internet world by acquiring few large-scale
businesses such as SkyBox Imaging worth USD 500 million, to be able to reach and obtain the
satellite technology which helped the company to bring in accuracy and clarity in its Google
Maps. It extended its advertising platform by acquiring DoubleClick (thecasecentre.org, 2019).

6. 6
Google had a notable business strategy behind the acquisition of Android mobile OS, this was
done inorder to popularise the smartphone and tablet market and create a firm ground for itself
in the mobile segment.
Aa a set of expansion strategies, the company has been benefiting from acquisitions as they
have enabled it to enter various new markets and has led to high market shares. These
acquisitions have empowered the company to enhance upon its technological capacities and
corner diverse markets of tech-savy consumers (Pineda, 2019).
Google has used diversification as an effective tool in their business strategy which has enabled
the company to capture various markets and make a hold on existing users.
Another noteworthy diversification strategy of Google is creating space for itself across
sectors, Google was successful in promoting the importance of digital communication and
internet among businesses (Harvard Business Review, 2019).
Since the very beginning, Google search engine has been dominating the market, this is
maintained by regulating the ecosystem depending on other products and services provided
by Google. The search engine’s popularity is derived by the fact that website developers
create their sites based on policies created by Google (Kenny, 2011).
Case in point “is the emergence of search engine optimisation and online marketing practices
build around Google Search technology”.
Google has always been keen in expanding towards robotics, space exploration and consumer
products. The company was founded by people with big ideas, it being a technology giant came
up with Google X which is a semi-secret idea, wherein they work on projects like driverless
cars, space elevators and time machines (Trellis, 2019).

7. 7
Project Google X:
“X is a diverse group of investors and entrepreneurs who build and launch technologies that
aim to improve the lives of millions of people. Their goal is to deliver ten times impact on the
world’s most intractable problems”(Lifewire, 2019).
Project Loon: “Expanding internet connectivity
with stratospheric balloons”
Project Loon is a drastic idea to expand internet
connectivity. The project deals with spreading the
connectivity via a network of balloons in the sky
at the edge of the space to provide connectivity in
rural areas, filling coverage gaps and improving
network resilience during disasters (X, themoonshot
factory, 2019).
Project Wing “Transforming the way goods
are delivered”
Project Wing is an initiative by X, which involves
drones with the capability of delivering consumer
goods to medicines. This method of transportation is
cheaper,faster and environmental friendly than any
other mode of ground transportation (X, themoonshot
factory, 2019).

8. 8
Waymo “Transforming mobility with self-driving cars”
Waymo vehicles by X have inbuilt sensors which can detect hundreds of objects all around
(360 degrees) even during darkness.
Google was founded almost 2 decades ago; the founders have massively diversified their
operations from its origin as a search engine to delivering internet advertisements. Gmail,
Google Maps, it also invested in Waymo (driverless cars), internet availability in rural areas
and many other gadgets (X, themoonshot factory, 2019).
Google has placed itself as online tycoon, companies all around look upto Google and the way
they operate. Restructuring of Google has enabled the founders to focus on the big picture
rather than daily activities of Google, side by side the investors get a clear picture of their shares
and can understand it better (Investopedia, 2019).

9. 9
Critical Analysis of Leadership at Google
(Business Insider, 2019).
The leaders at Google believe that giant companies tend to eventually die, as they create a
comfort zone and not innovate beyond it. Larry Page and Sergey Brin, the founders of Google
have clearly formulated and understood that in a technology based business it is extremely
important to come up with revolutionary ideas time-to-time and they believe this can only be
done if they step out of their comfort zone. The thought of creating a holding company came
up due to broadly diversified product and service offerings. It was done inorder to make Google
a clean and more accountable organization.

10. 10
Alphabet has enabled various leadership positions for diverse businesses, and looks for strong
leaders who will be supported directly by Larry and Sergey. Their purpose is to handle
allocation of capital and work towards execution of each sub division (realtimeperformance.com,
2019)
After business restructuring, Larry Page will handle Alphabet Inc. as CEO while Sergey Brin
will accompany him as the President, it is observed that the top management of Google has
been transited to Alphabet Inc.
Larry Page followed a strict leadership style wherein he believed in providing training and
delegating task to his subordinates, before shifting his presence from Google to Alphabet Inc.
he provided rigorous training sessions while sharing his experience with Sundar Pichai (CEO
of Google) similarly Marwan Fawaz and John Crafcik CEO’s of Nest and Waymo were also
nurtured. This restructuring has allowed the leaders to get a bigger picture and place multiple
leaders for varied Google products and services (Larry Page, 2019).
Larry has always been a visionary leader, he works towards making the impossible, possible.
Sudden shift to Alphabet Inc. was certainly not expected but he knew he was going in the right
direction and would be able to shape a brighter future.
During this shift to the parent company, Larry empowered others and lets an individual find
his own “Googliness”. He ensured he was giving Google in safe hands, Sergey and Sundar
Pichai made it possible. Larry Page believes that few people who are very crazy and think they
are capable of changing the world can lead such a giant organisation. Although Larry does not
have a prominent role in Google, he always ensured that Sundar Pichai leads in the unorthodox
style and takes the brand to higher and newer heights (Business Insider, 2019).

11. 11
Larry Page serves as the best example of “Effective leaders are the ones who recognise the
need to transition and hand off work they most care about to others so that they can have a
greater overall impact”. Larry trusted his subordinates as he gave them a chance by providing
effective training and boosting team spirit. The founders ensured that Google works smoothly
while the leader was being changes, therefore they could focus on other segments of Alphabet
Inc. (Solomon and Steyn, 2018).
It can be observed that Larry was a team oriented leader while Sergey is also a perfect leader.
Combining their leadership traits, they have been following a charismatic style which has
created an open atmosphere in the organisation as they are easily approachable. This has taken
Google where it is today (Business Insider, 2019).
The founders can be describes as transformational leaders and huge risk takers. Leadership at
Google was fuelled by a strong vision. Google’s workforce is extremely loyal and believe that
everything can be achieved whether a space elevator or a time machine. They can be called as
Googly-Workforce (Investopedia, 2019).
The top management of Google had strategically planned and then executed its transition to
Alphabet. Larry Page’s visionary leadership style and strong support through out from Sergey
Brin empowered the brand to retain in this dynamic tech-savvy environment by transition to
alphabet they could focus on the entire industry rather than just Google (Business Insider, 2019).

12. 12
Critical Analysis of Core Competencies of Google
Today Alphabet is among the most rich conglomerates with Google being the most valuable
company. The company has gone through diversification on a very large scale from internet
services to driverless cars. There might be many different businesses but the most profitable
among all is Google Advertisements, while it may be believed that the company’s core
functionality is as a search engine, they have always made revenue out of advertisements which
have been taking the company to newer heights. The company made a revenue of
approximately $89.7Bn. where the majority share came from AdWords.
Google AdWords are linked with their other products like Gmail, YouTube etc.
Advertisements pop-up while we check our mails. Google get payed for higher visibility of
ads. The pay-per-click is a scheme where the company earns on every single click, this
amount varies from a few cents to about $40 (Business Insider, 2019).
AdSense Network
Google has features which enable advertisements to be visible
on non-google websites. AdSense advertisements work on sites
approved by Google in the similar way as on Google websites.

13. 13
Revenue is generated when a user clicks the advertisement, the non google website keeps a
part of the revenue while the remaining goes to Google (Business Insider, 2019).
Transition to Alphabet has created a sense of clarity in the minds of investors, there is increases
level of transparency among the investors. It is easier for them to understand the different ideas
Google spends on. The top management gets freedom to think and come up with ideas like the
space elevator and time machine which don’t fit in the mission of the company (Business Insider,
2019).

14. 14
Conclusion

15. 15
Bibliography
Journals:
 Kenny, G. (2011). Diversification: best practices of the leading companies. Journal of
Business Strategy, 33(1), pp.15-22.
 Bhatia, A. and Deep, G. (2018). STRATEGIC ANALYSIS OF SEARCH ENGINE
GIANT: A CASE STUDY OF GOOGLE INC. International Journal of Computing &
Business Research, 4(1), pp.4-12.
 Solomon, A. and Steyn, R. (2018). Leadership styles: The role of cultural intelligence.
SA Journal of Industrial Psychology, 43(1).
 Gamble, J., Thompson, A. and Peteraf, M. (n.d.). Essentials of strategic management.
Books:
 HBR's 10 must reads on leadership. (2011). Boston, Mass.: Harvard Business Review
Press, pp.5-11.
 Bjerke, B. (n.d.). Business leadership and culture.
Websites:
 Android Authority. (2019). Google turns 20: The 20 biggest milestones in Google’s
history. [online] Available at: https://www.androidauthority.com/google-birthday-
907782/ [Accessed 24 Mar. 2019].
 Business Insider. (2019). Google's core business explained in two charts. [online]
Available at: https://www.businessinsider.in/Googles-core-business-explained-in-two-
charts/articleshow/48445687.cms [Accessed 25 Mar. 2019].
 Business Insider. (2019). One chart that explains Alphabet, Google's parent company.
[online] Available at: https://www.businessinsider.in/One-chart-that-explains-
Alphabet-Googles-parent-company/articleshow/50552074.cms [Accessed 25 Mar.
2019].
 Google.com. (2019). About Us | Google – Google. [online] Available at:
https://www.google.com/about/philosophy.html [Accessed 24 Mar. 2019].
 Harvard Business Review. (2019). Google Couldn’t Survivewith One Strategy.[online]
Available at: https://hbr.org/2015/08/google-couldnt-survive-with-one-strategy
[Accessed 25 Mar. 2019].
 Harvard Business Review. (2019). Why Google Became Alphabet. [online] Available
at: https://hbr.org/2015/08/why-google-became-alphabet [Accessed 25 Mar. 2019].

16. 16
 X, the moonshot factory. (2019). X, the moonshot factory. [online] Available at:
https://x.company/projects/loon/ [Accessed 25 Mar. 2019].
 Lifewire. (2019). Google Has a Secret Lab for Working on Moonshots. [online]
Available at: https://www.lifewire.com/google-x-secret-lab-1616267 [Accessed 25
Mar. 2019].
 X, the moonshot factory. (2019). X, the moonshot factory. [online] Available at:
https://x.company/projects/wing/ [Accessed 25 Mar. 2019].
 Pineda, M. (2019). The business strategy of Google | Version Daily. [online] Version
Daily. Available at: http://www.versiondaily.com/business-strategy-of-google/
[Accessed 25 Mar. 2019].
 X, the moonshot factory. (2019). X, the moonshot factory. [online] Available at:
https://x.company/projects/waymo/ [Accessed 25 Mar. 2019].
 thecasecentre.org. (2019). Google's Diversification: Is It the Right Move?. [online]
Available at: https://www.thecasecentre.org/educators/products/view?id=74887
[Accessed 25 Mar. 2019].
 Trellis. (2019). Google Continues to Diversify its Revenue Sources - Trellis. [online]
Available at: https://trellis.co/blog/google-continues-to-diversify-its-revenue-sources/
[Accessed 25 Mar. 2019].
 X, the moonshot factory. (2019). X, the moonshot factory. [online] Available at:
https://x.company/projects/loon/ [Accessed 25 Mar. 2019].
 Business Insider. (2019). 13 Unusual Ways Sergey Brin And Larry Page Made Google
The Company To Beat. [online] Available at: https://www.businessinsider.com/history-
sergey-brin-larry-page-and-google-strategy-2011-3 [Accessed 25 Mar. 2019].
 Investopedia. (2019). Why Google Became Alphabet. [online] Available at:
https://www.investopedia.com/articles/investing/081115/why-google-became-
alphabet.asp [Accessed 25 Mar. 2019].
 Larry Page. (2019). Larry's Leadership Style. [online] Available at:
https://larrypage.weebly.com/larrys-leadership-style.html [Accessed 25 Mar. 2019].
 Realtimeperformance.com. (2019). The 8 Most Important Qualities of Leadership at
Google – RealTime Performance. [online] Available at:
http://www.realtimeperformance.com/blog/the-8-most-important-qualities-of-
leadership-at-google/ [Accessed 25 Mar. 2019].