2. The Search Engine Industry
and Google Inc.
• An overview of the Information
Search Industry will be
provided.
• Google’s current state will be
discussed.
• Information on Google’s four
leading competitors will be
presented.
• An annotated list of websites
on Google and its competitors
will also be presented.
3. The Search Engine Industry
History
• The first search engines were
developed in the 1990’s as finding
aids for the World Wide Web.
• Indexing the web this way required
millions of computers to be run
simultaneously in parallel.
• Sergey Brin and Larry Page studied
the major problem of relevance
ranking of search results.
• Google’s rise is a direct result of
Sergey Brin and Larry Page’s
relevance ranking algorithm.
4. The Search Engine Industry
Advertising
• Google developed AdWords a web-based
automated auction by which customers could
place advertisements to be displayed in
conjunction with Google’s search results for
any given search term. AdWords was a key to
Google’s financial success.
• Google produced its AdSense program in 2003
for its Google network partners. “Similar to
search advertising, advertisers bid on
keywords relevant to their ads. With content
advertising, however, the ad is displayed on
websites with content related to the
keyword.”
• Together, search advertising and content
advertising account for 96% of Google’s
revenue. The search engine industry in
general depends on advertising to a similar
degree.
5. The Search Engine Industry
Google’s Financial Growth
• In 2004, Google made its
initial public offering (IPO)
under the ticker symbol GOOG
at the New York Stock
exchange, capitalizing at $1.6
billion. (Auletta 2009)
• Google is currently capitalized
at $171 Billion. (Morningstar)
6. The Search Engine Industry
Domestic Market Share
• Google currently controls 64.1%
of the domestic market (based
on the number of searches).
• Yahoo! is at 18% of domestic
searches performed.
• Microsoft Corporation ranks at
13.6% of domestic searches.
• Ask accounts for 2.8%
• America Online accounts for
1.4%. (IBISWorld)
7. The Search Engine Industry
World Market Share
Search engine Market share
Google 82.80%
Yahoo! 6.42%
Baidu 4.89%
Bing 3.91%
Ask 0.52%
AOL 0.36%
(Net Market Share)
8. The Search Engine Industry
Major Players
• Major players in the search
engine industry include
Google, Microsoft, Yahoo!
and America Online.
• Microsoft’s Online Services
Division includes its MSN.com
portal and its search engine,
Bing.
• In July 2009, Microsoft
entered into a 10-year
partnership with Yahoo!
9. The Search Engine Industry
Trends
• Advertising has been moving
from traditional media to online
sources.
• Growth in high speed access to
the internet is increasing and
will continue to increase.
• Growth in mobile access is also
increasing and will continue to
increase.
• “Domestically, internet access is
quickly becoming a key feature
in most consumer electronics.”
(IBISWorld)
10. The Search Engine Industry
Outlook
• The future remains bright for the
search engine industry.
• Advertising continues to migrate
from traditional forms to the
internet.
• The trends toward faster internet
access, toward more mobile access
and toward higher connectivity
serve to amplify needs for search
services
• Growth for the Search Engines
industry will finally slow over the
next five years. IBISWorld places
this industry in the Growth state of
its industry life cycle.
11. Google’s Current State
Google Company Financials
Net Income: $8,505,000,000
Net Sales: $29,321,000,000
Total Assets: $57,851,000,000
Total Liabilities: $11,610,000,000
EBITDA: $10,381,000,000
Market
Capitalization: $171,093,025,852
Outstanding Shares: 321,301,457
(Morningstar)
12. Google’s Current State
Google Officers
Eric E. Schmidt, Chairman
Larry Page, Chief Executive Officer
Patrick Pichette, SR VP, Chief
Financial Officer & Chief
Accounting Officer Urs Holzle
David Drummond, General
Counsel, SR VP & Secretary
Craig Silverstein, Chief Technology
Officer
Ben Fried, Chief Information
Officer
13. The Information Search Industry
Google Core Competencies
• Advertising from Google’s
search is the company’s main
source of revenue.
• Google has offered cloud-based
services.
• Web-publishing accounts for
“only about 16% of [Google’s]
total revenue, or $5.9 billion.”
(IBISWorld)
• Google’s has developed
operating systems and
enterprise software.
14. Google’s Current State
Google’s Venture into Smartphones
• Google acquired Android, Inc. in
2005 to venture into the
burgeoning smartphone
industry.
• In 2007, Google and several
telephone manufacturers joined
forces to develop Android.
• The Android market in
smartphones has grown rapidly.
• Android’s advance has affected
the entire smartphone market.
15. Google’s Current State
Google’s Venture into Smartphones
• Google has not derived much
revenue from Android’s success.
• Google’s purpose in promoting
the Android platform
apparently follows the interest
of its main business model.
Google hopes to develop
services for mobile computing
and to develop the vast market
for advertising.
• Google’s venture into the
Android market brings the
company into direct
competition with Apple.
16. Google’s Current State
Google’s Legal Problems
• Google has been challenged in court
on privacy issues.
• Recent patent infringement attacks on
the Android platform pose a threat to
Google’s plans.
• Google’s monumental project to
digitize the world’s books, Google
Books, drew a class-action suit from
American publishers and writers who
accused Google of copyright
infringement.
• The largest legal problem that Google
faces stems from the company’s
phenomenal growth and its complete
domination of the search engine
industry.
17. Google’s Current State
Three Recent Events
• In January 2011, Larry Page became
Google’s new Chief Executive,
replacing Eric Schmidt.
• A second momentous event occurred
when the U.S. Justice Department
announced in 2011 that it was bringing
Google under investigation of alleged
antitrust violations.
• A third major event occurred August
15, 2011 as Google announced its
purchase of Motorola, inc. The deal if
approved by government authorities
would represent Google’s largest
acquisition in its history at $12.5
Billion.
18. THE COMPETITION
Google’s competitors are many
Recent efforts created more competition
Four Selected Competitors:
AOL, Yahoo, Microsoft, and Apple
19. AOL
AOL now
independent of
Time-Warner.
AOL operating at a
loss.
CEO Tim Armstrong
Ad revenues are up
AOL looking to be
acquired.
20. YAHOO
•One of the original
giants.
•Broadband
internet/advertising are
main revenue sources.
•Yahoo in decline.
•Cooperative deal with
AOL, Microsoft.
•Consortium looking to
buy Yahoo.
21. MICROSOFT
Microsoft-World’s
leading software
giant.
Windows, MS Office,
MSN, and Bing.
Video Game
“Player” with X-Box
Expanded into
mobile device
market.
22. APPLE, INC.
•Leading
hardware/software
manufacturer.
•OS X operating
system
•Mac computers,
iPhones, and iPads.
•Enjoys strong brand
recognition.
•Looking into mobile
advertising market.
23. Business Source Complete
Business Source Complete contains
thousands of profiles for companies
Corporate Affiliations
Corporate Affiliations is a source for up-to-
date business information on
approximately 850,000 companies
www.CorporateInformation.com
Locator for publicly traded company
information.
24. DataMonitor Company Profiles
Provides access to profiles for companies and
their competitors
DialogWeb
DialogWeb is an excellent source for business
and industry information.
Disclosure Online Database-US Public
Company Profiles
Contains financial data for 8,000 businesses in
the United States.
Factiva
Factiva can be used to locate business data on
42,000 companies.
25. Gale Group Company Intelligence
It is a source for company information.
Hoover’s Company Records
Hoover’s locates business data for 65,000,000
corporate entities and more than 900 industry
profiles.
IBISWorld
IBISWorld is a primary source for industry
surveys.
Lexis Nexis Academic-Business
This database contains industry information for
American as well as foreign companies.
26. Mergent Online
Contains comprehensive industry data for
better than 10,000 publicly traded companies.
Morningstar Institutional database
This database provides market analysis.
Standard and Poor’s Net Advantage
Standard and Poor’s sets the industry standard
for market research
Valueline.com
ValueLine provides financial data for US
companies and industries.
