Google has achieved significant market share and success through its search engine and targeted advertising capabilities. However, it faces challenges such as legal threats, economic uncertainty, and ensuring new initiatives align with its mission. The recommendations are to: 1) Focus on superior search and advertising, Google's strengths, 2) Expand into organizing video through YouTube to capitalize on investments, and 3) Rigorously assess new ideas' alignment with Google's mission to organize information. This will protect Google's leadership in key areas while guiding strategic expansion.

1. 1
Google Executive Summary
Student Number: 1623954
Situation Analysis
From 2004 to 2009 Google’s market share has soared from around 35% to over 60% while
those of competitors like Yahoo!, Microsoft and others have taken a nose dive. Google has built
its way to becoming the most powerful search engine in the world. But will that last? And is this
the best Google can do? The following pages will describe the current situation and competitive
landscape, the key issues, solutions and how these solutions will benefit Google in both the short
and long run.
Google has many key resources, from its cloud based productivity solutions such as
GoogleDocs, to Gmail, and the Chrome browser [see exhibit 2 for further resources and
processes]. Google also has many internal capabilities which have made it successful from its
flexible organization made up of small teams enabling lightning fast responses to trends to its
stable corporate structure ensuring continuity of the company’s mission and vision [see exhibit
8]. Google has exceled in key industry success factors such as its leading Gmail email and
calendaring software to its cutting edge search engine algorithms and constantly evolving
targeted advertising [see exhibit 3]. Google outranks Yahoo! and Microsoft in nearly all of the
industry success factors and has set a place for itself as a first mover and industry leader while
the rest play catch up [see exhibits 4 and 5].
Despite these key success factors Google is still bound by issues that affect the search
engine industry as a whole. Technology is constantly evolving at an ever quickening pace and

2. 2
no company knows what the future will hold or what consumer’s exact desires will be no matter
the investments in market research. Like many large companies Google faces anti-trust legal
threats and the ever looming danger of the depressed economy [see exhibit 7].
Key Issues Statement
Aside from factors that influence the entire industry Google faces issues at the individual
level. Google has yet to find a fool proof way to avoid fraud on its online advertising platform
which has led to a series of lawsuits. Its subsidiary, YouTube, lost $470 million in 2009 alone
and every other week there is a new lawsuit being levied against Google for anything from
copyright infringement to user privacy concerns [see exhibit 1].
Google competes with a high level of success in many arenas going head on with industry
giants like eBay, PayPal, Yahoo!, Microsoft, and Amazon. While brave and exciting this has
made for many powerful adversaries and a constant battle to stay ahead of the curve on
countless, often disjointed, fronts. Google has expanded into so many different areas that it has
become uncertain which strategy to follow. Does Google pursue the area where it has the
highest investments, the highest profits, or the one that most aligns with its mission? How did
Google get to this position [see exhibit 9]? Google is known for taking risky long shots that it
believes will pay off, investing a large amount of time and money in R&D and encouraging
creativity among its engineers. While this has been a large part of Google’s recipe for current
success is it the recipe for future success? Does Google know which parts of this formula are
working and which ones are holding it back?
Strategic Recommendations and Rationale

3. 3
“It’s best to do one thing really, really well.” This is number two in Google’s Statement of
Philosophy and the guiding principle through which the following recommendations are made:
1. Focus on Google's distinctive competence: developing superior search solutions and
monetizing them through targeted advertising
2. Expand into organizing the world's video content as well; capitalizing on investment in
YouTube.
3. Ensure vetting process for new ideas/services/applications includes a strenuous assessment of
whether or not the new idea closely aligns with Google's mission
There were many strategic options considered as referenced in exhibit 10. The different
options were compared using a variety of choice criteria including amount of resource allocation
needed, whether it addresses competitive threats, if it is profitable and would increase market
share and if it aligns with Google’s mission to “organize the world’s information [see exhibit 11
and 12]. The above recommendations require a below average amount of resource investment as
these are areas Google is already highly invested in. In addition Google is already the leading
search engine and a leader in the targeted advertising market. Recommendation number one will
protect and grow Google’s market share in an area it already has a core competence in. Google
has already made a $1.65 billion investment in YouTube and it is currently losing money so it
could only benefit Google to invest in this area to improve profitability. YouTube is already a
force to reckon with in the video streaming industry so this would be a matter of protecting and
growing its market share in a way that is profitable for Google.
Both recommendations one and two closely align with Google’s mission to organize the
world’s information. Video streaming is growing more and more popular as it becomes

4. 4
enmeshed in the growing virtual social networking industry. Despite growing popularity there
have been few major innovations in how to store, search, and organize videos and the
information stored in them. This is an area that Google is uniquely poised to contribute to and it
could become the next frontier for searchable information along with print and mobile data
sources. These are strategic areas where Google has more to gain than loose and can be funded
through Google’s innovative and evolving targeted advertising competency [See exhibit 13].
See the balanced scorecard in exhibit 6 for suggested key performance indicators that will help
Google to remain profitable in these areas. Lastly, recommendation three will ensure a more
targeted and strategic direction for areas of investment going forth.
Conclusions
Google has come far from its humble beginnings. It has grown to be an industry giant and a
household name but Google’s success story is far from over. Following recommendations such
as concentrating on investments in superior search solutions, expanding targeted advertising and
focusing on organizing video content will only help move Google forward. With targeted
strategies that align with Google’s current investments, core competencies and mission Google
will continue to grow in a way that not only protects its current market share and profit but
enables Google to grow and sustain itself into the future.

5. 5
Exhibit 1
Strengths, Weaknesses, Opportunities, and Threats Analysis
Users trust Googles' objectivity Diversity and range of product and service offerings
Largest market share among search engines Leader in cloud applications
Competence in developing superior search solutions and
monetizing them through targeted advertising
Largest index of webpages
Launch of contextual paid listings allowing advertising in
previously uncharted areas
Wide variety of investments and acquisitions makes
competitors wonder what Google's plans and strategy
are. Which makes Google harder to counteract.
Google's robust team of engineers
Google earns 38% more revenue per search than
leading competitor Yahoo!
Popular office program with Gmail, GoogleDocs etc.
Reputation as a leader due to innovative Gmail user
interface design, asynchronous Javascript and XML
Distinctive governance structure and corporate values
Lack of middle management and small team
configuration makes it a flexible organization
Flexibility for engineers has spawned many different
initiatives
Financial ability to place high risk, long term bets on
projects
Corporate structure designed for stability over the long
term
Management is secretive to outsiders Advertisers view some charges as improper
Affected by clickfraud Large scale law suits levied against Google
Loses on YouTube due to high bandwidth and low
advertising revenues
Users have privacy concerns with Google
Continual copy right infringement issues both with book
publishers and video producers.
Fraudulent links on Google pages
Google currently has a 41% share in the growing online
video industry with vast advertising opportunities.
Google could capitalize on this and expand its market
share in this area.
Could expand GoogleDocs product offerings to
outcompete Microsoft.
Since Google is so diverse, competing in so many areas
there are a large number of high profile competitors
Their cloud based applications and solutions if
breached would lead to a user privacy nightmare
DOJ's repeated remarks regarding Google's "Monopoly in
internet online advertising" and its "gathering market
power" may indicate that Google is a possible target in
the future for anti-trust suits.
Strengths
Weaknesses
Opportunities
Threats

6. 6
Exhibit 2
Four Box Business Model Analysis-Google
Customer Value Proposition Key Resources Key Processes Profit Formula
Google aims to organize the world's information through
developing superior search solutions and monetizing them
through targeted advertising.
GoogleDocs
Competence in
developing superior
search solutions and
monetizing them through
targeted advertising
Provide mostly free services
and products making the bulk of
its money off of advertising
revenue
Android operating system
building on Google's real
time and voice
communication efforts
Lack of middle
management and small
team configuration
makes it a flexible
organization
Largest index of webpages Content hosting abilities
GoogleMaps with faster
scrolling and browsing than
competitors
Large infrastructure
investment in Linux which
makes Google capable of
scaling quickly
Google's robust team of
engineers
Flexibility granted to
engineers has spawned
many new initiatives
Google Analytics which
benefits their advertisers by
optimizing paid listing
campaigns
Rapid execution abilities
due to small working
groups.
Personalized search, Local
search and Verticle search
Greater organizational
flexibility due to lack of
middle management.
Largest market share among
search engines
Ability to run many small
projects at one time due to
scale and small working
teams.
Largest index of webpages
Acquisitions of YouTube and
Doubleclick leading to
expanded online video and
display advertising
Ad-supported software
Google Analytics which
benefits their advertisers by
optimizing paid listing
campaigns
Popular Chrome browser
Large investment in
infrastructure, Linux system
can scale readily
Google Checkout
Froogle
Cloud Based applications
Communication applications
Google Books
Gchat
Unique governance structure
and corporate values that
drive its mission

7. 7
Exhibit 3
Industry Key Success Factors
Email software
Calendaring software
Effective display advertising
Algorithmic search engine
Large variety of accurate search results
Paid listings
Advertiser features
Fast searching

8. 8
Exhibit4
KeySuccessfactor/strengthmeasureImportanceWeightStrengthRatingWeightedScoreStrengthRatingWeightedScoreStrengthRatingWeightedScore
Emailsoftware0.109.500.958.000.809.000.90
Calendaringsoftware0.058.000.408.000.409.000.45
Effectivedisplayadvertising0.058.000.408.000.408.500.43
Algorithmicsearchengine0.209.501.908.001.609.501.90
Largevarietyofaccuratesearchresults0.3010.003.009.502.859.502.85
Paidlistings0.059.000.456.000.309.000.45
Fastsearching0.259.002.259.002.259.002.25
OverallWeightedCompetitiveStrengthRating9.358.609.23
GoogleYahooMicrosoft
CompetitiveStrengthAssessment(RatingsScale:1=VeryWeak;10=VeryStrong)

9. 9
Exhibit 5
Competitor Analysis Grid
Google Yahoo! Microsoft Office
Objectives
To protect and grow its
market position in the online
search engine and advertising
market. To "organize the
world's information".
To provide leading search
engine and online portal.
To lead the market as a
decision engine, and
successfully differentiate
their product from other
search engines.
Strategy
Innovative and differentiated
technology that enables it to
be a first mover and build a
following among both the
professional and personal
user market.
Insulate itself from external
threats (ex, ended dependence
on third parties for searching
algorithems, tried to merge
with Microsoft), continue to
compete head on with Google
as long as they are able (ex.
Search and paid listings,
local search, map options).
Continue to build up web
applications such as job
search and dating as well as
online stores.
Enhance privacy and security
due to running web apps
through their own servers, be
seen as a decision engine
rather than just a search
engine, cutting edge ad
software enables greater
revenue generation.
Market Positioning
(Leader/Follower/Nicher)
Leader: Often a first mover
that is immitated.
Nicher/Follower- ex. Nicher-
really built up online portal
and web app options,
follower-hasn’t introduced
much new content and is just
struggling now to compete.
Follower- ex. "Office Web"
Strengths
Innovative technology, largest
portion of market share
granting it market power,
range of product and service
offerings that are tightly
integrated.
Broad reach due to portal
organized into channels, easy
access to wide range of third
party content, portal, early
insight into Google, manages
own algorithmic search and
paid listings, job and dating
sites,
Enhanced privacy and
security, possible partnership
with Yahoo! to place
Microsoft ads on its pages,
hover previews of web pages,
cash-back feature, strong
foothold in Microsoft Office.
Weaknesses
Vulnerable to lawsuits
especially regarding anti-
trust actions. Is a direct
competitor with many large
companies, privacy concerns
among users, copyright
concerns among content
providers and fraud concers
among advertisers.
Not enough attention focused
on sponsored links which
generate revenue, delays in
upgrading infrastructure,
shrinking share of internet
search queries.
frequent change in branding
i.e. MSN --> LiveSearch -->
Bing, neither Office Web nor
it's online portal are
meaningfully differentiated
from the product offerings of
Google or Yahoo!
Recent Performance
Fastest growing company with
ever diversifying products
and services
Shrinking market share,
droping stock price, unstable,
massive staff turnover
Shrinking marketshare, desire
to grow into a larger
marketshare to compete with
Google (i.e. its thwarted
acquisition of Yahoo!), still
providing new or enhanced
product offerings.
Likely Competitive Response
Continue to create products
that compete directly with
both Microsoft and Yahoo!
While xpanding into other
online categories
Insulate itself from external
threats (ex, ended dependence
on third parties for searching
algorithems, tried to merge
with Microsoft), and continue
to compete head on with
Google as long as it can (ex.
Search and paid listings,
local search, map options).
Will let another company be
the first mover and if they are
successful Microsoft will
imitate and attempt to
enhance.

10. 10
Exhibit6
KeyPerformanceIndicatorMeasurementand
TargetValue
Key
Performance
Indicator
KeyPerformanceIndicator
MeasurementandTarget
Value
Key
Performance
Indicator
KeyPerformanceIndicatorMeasurement
andTargetValue
Key
Performance
Indicator
KeyPerformanceIndicator
MeasurementandTargetValue
Key
Performance
Indicator
Earn70%(a10%increase)ofU.S.paidlistings
revenuebyEOY.
DataonU.S.
search
queries
90%customersatisfaction
withbreadthandaccuracy
ofsearchresultsbyEOY.
Customer
surveys
Buildinfrastructureinvestmentsby8%by
EOYinordertoremainabletoscaleto
Google'sgrowingmarketdemand
Financial
statements
Improveadvertiserfeaturesand
expandexistingadvertiser
offeringsby5%.
Inventoryof
advertiser
product
offerings
Increaserevenuesplitswithlistingproviders
toover90%foreveryadvertiserbyEOY.
Advertiser
contracts
negotiated
Reduceadvertiser
complaintsoffraudulent
advertisingplacementand
usageby15%.
Feedback
from
advertisers.
Develop3newproductand/or
serviceofferingswithinthenext2
years.
Productsand
services
availabe.
IncreaseYouTubeadvertisingrevenuesby15%
byEOY.
Financial
statements
InternalBusinessPerspectiveInnovationandLearningPerspectiveCustomerPerspectiveFinancialPerspective
BalancedScorecardAnalysis

11. 11
Exhibit 7
PEST Analysis
Anti-trust laws threaten the ability of large
scale search engine providers to either grow
or merge.
Lawsuits over advertisement placement, and
source material from external providers
threaten the profit margin of those in the
industry.
General economic depression can deflate
stock prices and increase volatility harming
the profits of publically traded search engine
suppliers.
Economic depression could reduce the
advertising budgets of many companies
resulting in less profit generating ad revenue
for search engines.
Social
Growing privacy concern among users may
harm marketshare if the users don’t believe
their personal information is safe.
The advent of improved search algorithm
technology could change the competitive
landscape.
Many search, sort, or social applications
make it possible to circumnavigate
traditional search engines.
In the technology industry change is fast
paced and if a company is not constantly
innovating they can quickly loose their
customers to easy subsitutes.
Political
Technological
Economic

12. 12
Exhibit 8
Competencies Analysis
Resource Valuable? Hard to Copy? Capability Valuable? Hard to Copy?
Personalized search
Yes, it increases the ammount of accurate
results.
Medium. It is just a matter of the other
companies utilizing the personal data
available to them and creating an
algorithem. It will most likely be
immitated if it hasn’t been already.
Flexible
organization run by
small teams
Yes, it means Google
can adapt quickly to
changing trends and
new information.
Medium, this was an
intentional way the
company was organized
from the onset. It would be
difficult for large
companies to change and
immitate this model now
but it would not be as
difficult for emerging
companies.
Local Search
Yes, directs money to local markets and
opens up more financing sources for ad
revenue.
Medium. It is just a matter of the other
companies creating an algorithem to
search locally. It will most likely be
immitated if it hasn’t been already.
Fast searching
Yes, this is an order
qualifier.
Medium, this seems to be
an order qualifier now and
it is less of a point of
differentiation for large
search engines.
GoogleDocs/ Online office applications Yes, this product differentiates Google.
No, Microsoft is already coming out with
"Office Web"
Targeted advertising
Yes, this increases
ad revenue.
Yes/No. Google has come
up with innovative ways to
target advertising and make
it more profitable. It Is not
impossible to copy but it
can be more difficult to
make profitable for
companies who have less
market power than Google.
Cloud based applications
Yes, this is a growing trend that will soon
become an order qualifier rather than an
order winner.
Yes/No. It seems Microsoft will be
immitating this strategy if they plan to
launch "Office Web.
Content hosting
Yes, enables Google
to scale into new
areas in the future.
Yes, other companies can
become content hosts for
videos but thus far no other
video hosting site has been
able to compete with
YouTube.
YouTube video hosting
Yes, this is a very popular video hosting
site.
Yes, YouTube has a strong customer
following and a large share of the video
streaming market.
Paid listings
Yes, is a necessary
source of revenue.
No, many search engines
use this as a source of
revenue.
Search engine algorithems
Yes, innovative algorithems are a source
of competition.
No, search alogirthems are constantly
evolving and changing for every major
search engine company.
Advertising focused
on the local
business market
Yes, opens up new
advertising
opportunities.
Yes/No. It seems to be a
matter of creating a new
algorithem. It is likely
other large search engines
will immitate this if they
havent already.
Reputation as an innovative brand Yes, increases customer following.
Yes, it is not impossible to immitate but
Google has gained a reputation through
being a first mover which has made the
other companies appear to be playing
catch up.
Stable corporate
structure
Yes/No. It is
valuable as long as
the corporate
structure is effective
if it is not effective it
could be a
detriment.
Yes/No. Yahoo! certainly
could not immitate this.
For other companies this
may be a benefit or a
detriment.
Innovative engineers
Yes, necessary to keep Google on the
cutting edge.
Medium. It is possible to hire other
innovative engineers but Google has such
large market power that it would be hard
to keep these engineers if Google wanted
to hire them. Also, Google's corporate
structure enables engineers to be more
creative and innovative than they may be
otherwise.
Effective allocation
of engineering
efforts i.e the
70/20/10 rule
Yes/No. It seems to
have been effective
so far but if it ceases
to be effective it will
need to be
reevaluated.
Yes/No. It would require
companies being willing to
take greater risks in
ventures that may or may
not pay off and have the
financial resources to be
able to recover if they do
not pay off. This can also
be hard to copy because it
is a part of Google's
corporate culture.
Strong customer following Yes, necessary to grow market share.
Medium, Google has built up a strong
following but it is not impossible to
compete with them for customers due to
the very low cost of substitution.
Shrewd acquisition
management
Yes, this has enabled
Google to grow in
ways that have
expanded their
market power.
Yes/No. This requires
foresight, finances and
leverage. None of which
are impossible to gain but
it is difficult to have all
three when you are
competing with Google.
Large servers Yes, enables cloud based applications.
No, It is a barrier to entry for other
smaller companies but it just requires the
financial resource allocation from larger
companies.
Willingness and
ability to invest in
long-shots
Yes. This has aided
Google in R&D
through willingness
and ability to try
new things that may
have a large payoff
in the future.
Encourages
creativity among
engineers.
Yes/No. This is a part of
Google corporate culture so
it could be difficult to make
that shift but it is not
impossible. However, it
does require the financial
means to take large risks.
Wide variety of targeted search results
Yes, this is an order qualifier for
customers.
No, this is an area where Microsoft,
Google and Yahoo! are constantly
competing.

13. 13
Exhibit9
ProblemDefenition:Google hasexpandedintosomanydifferent
areas itis difficulttodecide whichareatopursue as a longterm
strategy
Google'sculture of risktakingand heavyR&D developmentinmany
Google pridesthemselvesinencouragingcreativity
Solution:Ensure vettingprocessfornew ideas/services/applications
includesastrenuousassessmentof whetherornotthe new idea
closelyalignswithGoogle'slongtermstrategy.
Google pridesitselfinencouragingcreativity
Google'sculture of risktakingand heavyR&D developmentinmany
areas hasledto manydisjointedstrategies.
Because creativityhasledtosome cuttingedge innovationsthathave
beenprofitableforthe company.
These ideasmade itthroughthe vettingprocessandGoogle decidedto
investlarge resourcesinthem. Root Cause
Why?
Why?
Why?
Why?

14. 14
Exhibit10
Strategic Options
Considered
1. Focus on Google's DistinctiveCompetence:
developing superior search solutions and monetizing
them through targeted advertising
2. Branch into new areas,i.e. expand into a full
portal,expand checkout functions,and develop more
productivity products to compete with Windows and
Office.
3. Expand into organizingthe world's video content
as well; capitalizingon investment in YouTube.
4. Splitup the Google company allowingonedivision
or separateentity to expand and compete in the
productivity applicationsthatcompete with Windows
and Office products and retain Google as a parent
company allowingGoogleto return to its focus on
organizingthe world's information without losingan
area of strength and revenue.

15. 15
Exhibit11
Choice Criteria Used to
Decide Between Options
Amount of resources required
Addresses short term competitive threats
Addresses long term competitive threats
Would increasemarket share
Would increaseprofitability
Aligns with Google's Mission to "Organizethe
world's information"

16. 16
Exhibit12
CriteriaWhyimportant?
Importance
Weight
FocusonGoogle's
DistinctiveCompetence:
developingsuperior
searchsolutionsand
monetizingthem
throughtargeted
advertising
Weighted
Average
Branchintonewareas,
i.e.expandintoafull
portal,expandcheckout
functions,develop
moreproductivity
productstocompete
withWindowsand
Office.
Weighted
Average
Expandintoorganizing
theworld'svideo
contentaswell;
capitalizingon
investmentinYouTube.
Weighted
Average
SplituptheGoogle
companyallowing
onedivisionor
separateentityto
expandandcompete
intheproductivity
applicationsthat
competewith
WindowsandOffice
productsandretain
Googleasaparent
company
Weighted
Average
Amountofresources
required(1-10,with10
beingleastammount
ofrequiredresources)
AlthoughGooglehas
anabundanceof
resourcestheyare
finiteandeach
investmenthasan
oportunitycost.10%50.530.380.850.5
Addressesshortterm
competitivethreats
Googleneedsto
addressshortterm
competitivethreats
whilepursuinglong
termstrategies.10%70.780.850.520.2
Addresseslongterm
competitivethreats
Thisisimportantfor
Google'slongterm
successandviability.15%71.0581.250.7571.05
Wouldincreasemarket
share
Importantformarket
powerand
profitability10%50.580.880.840.4
Wouldincrease
profitability
Thisisthegoalofany
company,tomakea
profit15%60.981.260.950.75
AlignswithGoogle's
Missionto"Organize
theworld's
information"
Suggestionsshould
aligntothevisionof
thecompanyinorder
tofocuseffortsina
waythatalignswith
thecompanies
missionandvisionin
boththeshortandthe
longterm.40%93.610.462.452
Total100%7.254.76.154.9

17. 17
Exhibit 13
Reward/Risk Analysis
Options Potential Rewards Potential Risks
Would build up Google's
brand as a superior search
engine.
Ignores some of Google's
most innovative and
popular new products
such as its productivity
software.
Is predicatble/stable, this
is a method Google knows
that it is good at
It puts all of Google's
eggs in one basket. If the
market changes, or an
alternative to online
search engines arises
Google would face a
great loss.
Google has a great deal of
market power which
enables it to generate
higher than average
advertising profit when
contracts are negotiated.
Could push Yahoo! out of
business and damage
Microsoft giving Google a
greater market share.
Does not align well with
Google's mission to
organize the world's
information
Could build a new strategic
competence area for
Google.
Is a new portal
something that current
users actually desire? If
it is not it could be a
waste of resources.
Would open opportunities
in a new market that is
quickly changing as far as
cloud based solutions and
online office tools go
Would capitalize on
increase in online
shopping, maintaining a
foothold in a quickly
expanding industry
Could satisfy an untapped
market that is very popular
May be too narrow a
focus
Aligns with Google's
strategy to "Organize the
world's information"
YouTube is already
struggling to make a
profit, if strategy doesn’t
pan out Google could be
facing a loss
Capitalizes on a resource
Google already controls
and has invested in
Allows Google proper to
focus on it's mission
without loosing a
profitable avenue that it
has already invested
heavily in
Would require resources
to divide the company
and create new facilities
and legal fees for
performing the split.
May stave off successful
anti-trust lawsuits
Could involve major
internal upheaval or
restructuring
Allows for greater
specialization
Productivity apps within
the new company may
not be as successful as
when they were part of
Google due to a change in
organizational culture
and resources
Focus on Google's distinctive competence:
developing superior search solutions and
monetizing them through targeted
advertising
Branch into new areas, i.e. expand into a
full portal, expand checkout functions,
develop more productivity products to
compete with Windows and Office.
Expand into organizing the world's video
content as well; capitalizing on investment
in YouTube.
Split up the Google company allowing one
division or separate entity to expand and
compete in the productivity applications
that compete with Windows and Office
products and retain Google as a parent
company allowing Google to return to its
focus on organizing the world's information
without loosing an area of strength and
revenue.