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Google strategic management
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- 2. Company Overview MARKET ANALYSIS TECHNICAL ANALYSIS FINANCIAL ANALYSIS CompanyInfo Google enjoyed a 67.7% share of all US searches in June 2014 • Major web services includes Gmail, Google map, Google drive, Google books, Google sheets, Google docs etc. • Google develops android mobile operating system and its smart watches • Gross Revenue of $59.8 billion. • Operating income of $15.4 billion. • Shares are worth $570 in August 2014. • It was founded in September 1998 • Google.com is the most visited website on internet • Head quarters is located at mountain view, California U.S • Google have around 114000 employees • Sundhar Pichai is the current CEO.
- 3. Summary 1999: Foundation ofthe company 2004: Google's IPO at $85 per share 2009: Google.com had a 65.6% share of U.S. market 2010: Share price exceeds $600 giving a $189 billion market value Leadership in the Search Engine industry Paid listing evaluation system Support to create effective ads Making competition irrelevant Breaking the value-cost trade off Pursuit differentiation and low cost
- 4. Question 1 Google currentlyenjoys approximately 70% market share of US searches, and well above 90% in many other countries. Do you expect search business to become more concentrated (i.e. dominated by fewer firms)? Is search is a winner-take-all-business? • Always been highly concentrated business. • Google Enjoyed 67.7 % share of US searches in 2014. • Competitor share has been Stagnant since 2004 • Google has only been growing it’s share since 2004. • Google-opoly- going where the user goes (Chrome, Android, YouTube, Google home) • Google is never far away from anyone • Bing has a slight share- because of integration to Microsoft products worldwide. • Google has created a habit. • Inspite of complaints from advertisers publishers etc, they never stopped advertising • It is a winner take all business. Major reasons; habit, best for paid listing, high integration. • Only other relevant engine- DuckDuCKGO- reason; privacy focused.
- 5. Question 2 In renewingits deal with AOL, COULD Google afford to pay AOL more than 100% of the revenue generated from AOL searches? How did Microsoft maximum affordable bid for AOLs search traffic compared to Google’s? Initially in 2002, Google was able to afford paying more than 100% of revenue generated by AOL. In 2004, AOL contributes to 10% of the income of the search engine. In 2005, the contribution to the earnings is even higher, helping Google to increase its influence. We don’t know the exact figures of the bid made by Microsoft, but it is apparentthat the bid made by Google was very intriguing. Microsoft was looking to create new relations with AOL while Google wanted to strengthen the older bonds. This was a chance for Google to become an industry leader. In the end, AOL agreed for 5% stake for Google at $1 Billion cash.
- 6. Question 3 Expansion isnecessary to stay longer in the market Firm has already commenced to form its desktop E- commerce intermediary such as eBay Currently 95% plus of Google’s revenue comes from online advertising. How important it is for Google to pursue alternative revenue streams? Which alternatives are the most promising?
- 7. Question 4 Administered bythe cofounders and the Chief Executive Officer Increased confidence of its investors and clients. Structure is extremely unique Permits increased viewpoints. Firm promotes a spirit of togetherness Do you view Google’s governance structure, corporate culture and organizational processes as strength or potential limitations? Allows the differing parity of authority inside the direction of the firm
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