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History of Google• Began March 1996 as a Stanford research project by
Larry Page and Sergey Brin.• PageRank: pages with the most links to them from
other relevant web pages must be the most important pages associated with the search.
• Formally incorporated as Google Inc., on September 4, 1998.
• In 2000, began selling advertising based on search keywords.
• By 2004 they made their first initial public stock offering.
Google’s Mission
• “Organize the world's information and make it universally accessible and useful.”– New approach to online search that quickly spread to
information seekers around the globe.– Google focuses on using its mission to connect it’s
users to their core business, the search engine. • Code of conduct--“Don’t be evil.” – “We believe strongly that in the long term, we will be
better served, as shareholders and in all other ways, by a company that does good thing for the world even if we forgo some short term gains.”
Google’s Core Business
• Advertising– Google receives demand for advertising mainly
from businesses that sell a large range of consumer products, and services.
– AdWords: Advertisers select their own target keywords and only pay when customers click on their ads.
– Google’s main revenue is generated by providing online advertising, at over $10 billion a year.
Google’s Core Business
• Search– Google’s main focus is developing the best search
engine possible. – Company developers provided the fastest, most
accurate results requiring a new kind of server setup.
– Google uses a system created by the company’s founders called PageRank, which is meant to help rank web pages that match a certain search query.
Environmental Factors
• Geography– Google’s main headquarters are located in Mountain
View, CA.– Competes internationally in Asia Pacific, the Middle
East, Latin America, Canada, and Europe.• Social– Most common age distribution 35-44: 22.93%– Affluent users– Important consumer of Google consists of their
business to business operations.
Technology• Stands out from competitors through processes
such as information technology, analytical decisions, and product development.
• Google rapidly comes up with new ideas to expand their offering mobile phones, social networks, operating systems, blogging, etc.
• Organization structure is suited to implementing an entire product-development life cycle quickly and efficiently.
• Google simultaneously tests and markets the products to the user community.
Political
• Copyright Accusations– Faced with an anti-monopoly inquiry from the
Department of Justice.– Scanning copyrighted books from libraries for use
in its book search service was a violation of copyrights.
Political
• Privacy Standards– Stop the merger of Google and the online
advertising firm, Doubleclick.– Interest groups filed a complaint with the FTC, and
they agreed to conduct an anti-trust review of the deal.
– Wanted more transparent information on how their personal information is collected and used.
Political
• Censorship Laws– Announced that they would follow internet
censorship laws in the People’s Republic of China.– Firewall allows for self-imposed censorship of
certain keywords that are on a blocked list maintained by the government.
– They feel providing some information is more consistent with their mission then providing none at all.
Political
• Google has a lot of influence on American politics. – They have a large control over the distribution of
information.– Google Public Policy. Includes their views on net
neutrality, censorship, innovation regulation, immigration, R&D, national security, and trade.
– Online video debates of presidential candidates.– NetPAC: supports candidates who promote an open
and free Internet for users.
Organizational Structure
Eric Schmidt, Chairman of the Board and Chief
Executive Officer
Larry Page, Co-Founder & President,
Products
Jonathan Rosenber, Senior Vice President, Product Management
Susan Wojcicki, Vice President, Product
Management
Sergey Brin, Co-Founder & President,
Technology
Alan Eustace, Senior Vice President,
Engineering & Research
Jeff Huber, Senior Vice President,
Engineering
W.M. Coughran, Senior Vice President,
Engineering
Patrick Pichette, Senior Vice President & Chief
Financial Officer
Omid Kordestani, Senior Advisor, Office of the CEO and Founders
Urs Holzle, Senior Vice President, Operations & Google
Fellow
Laszlo Bock, Vice President, People
Operations
Rachel Whetstone, Vice President, Public Policy and Communications
Shona L. Brown, Senior Vice President, Business Operations, Google Inc.
Nikesh Arora, President, Global Sales
Operations and Business Development
David C. Drummond, Senior Vice President,
Corporate Development and Chief Legal Officer
Google’s Organizational Chart
Organizational Structure Cont.
• Flat Structure– Has few levels of executives between employees
and management.– Allows for ease of communication with upper
management and quick decision making.– Important to the company to maintain the feel of a
small organization.– Committed to every employee, they each have
something important to contribute, and everyone that works there is valuable to their success.
SWOT Analysis of Google
Strengths Weaknesses
- PageRank system- AdWords- Cloud Computing
- No metadata to filter search results
- Privacy issues
Opportunities Threats
- Social network industry- Expanding services to Mac and
Linux
- Increasing competition leads to revenue decrease
- Intellectual property rights
Hedgehog Concept
What Google is deeply
passionate about
What drives Google's economic
engine
What Google can be best in the world at
4 Action Framework
Google's Current Value
Curve
REDUCE:- Employees- R&D Costs
CREATE:- Web browser
- Apps
RAISE:- New ad formats- Needs of users- Global access
- Search tools (Google.com)
ELIMINATE: - Pop-ups
- Payments for search results- Newspaper and radio ad units
Google’s Globalization Drivers
Google'sGlobalization
Potential
Market Drivers- Evolution of customer
needs- Global customers
Cost Drivers- Nature of industry- Economies of scale
- Differences in country costs
Competitive Drivers- Globalization of
competitors- Interdependence between countries
Government Drivers- Regulatory climate
- Technology- Standards
YAHOO! INC
•1994, Jerry Yang and David Filo - Stanford University•making a guide on the campus trailer •“Jerry and David’s Guide to the World Wide Web” •“Yahoo!” = Is the acronym for “Yet Another Hierarchical Officious Oracle”
Way to the breakthrough
• 1996: 1st I.P.O. of $1billion• 1998-2008: acquired different companies and
services (Y!Mail, Y!Messenger, GeoCities, Flickr, del.icio.us…)
• Went into Asia• Never had a search engine until 2003
But failed in the end
• 2005-2008: several attempts from Microsoft • 2001-2008: 3 times CEO changed• Jul 2009: Microsoft $20billion for Y! search
engine (stock price $33 2008 to $15.4 2009)• Shifts to displaying ads and online services• Last 4 years: 92x decrease in operating
income, 4.5x decrease in total income,
Baidu Inc.•2000 a Chinese language Internet search provider
•Provides an index of over 740 million web pages, 80 million images, and 10 million multimedia files & 57 search and community services
•Inspired by a poem written more than 800 years ago during the Song Dynasty. The poem compares the search for a retreating beauty amid chaotic glamour with the search for one's dream while confronted by life's many obstacles
•The first Chinese company listed on the Basdaq list
•62.1 percents of Chinese market (Google - 29 percents)
•Last 4 years: 20x cash flow, 4x assets, 4x equity, 12x revenue, 40x operating income
AOL
•1995-1999: WebCrawler, NetFind, Netscape
•1999: AOL Search
•2001: merger with Time Warner
•2005: Google got 5% of stocks
•2006-2008: profits decrease (-$13 mil in 2008)
•2009: split
MSN & Bing•1998: MSN search
•2009: bing – disease in Chinese? very certain to respond? Or just bing!?
•Pay per click – on mobile phones
•10 years agreement with Yahoo! – 23% market share
•Decision engine instead of search engine/Innovation• Quicktabs• Interactive/smart (flight number, usb tracking number)• Photos and videos• Microsoft Advertising Intelligence (provides keyword expansion,
research, pricing, and KPI data allowing you to maximize marketing ROI for your paid search and content ad campaigns )
Online Advertising Industry:View from the top
• Highly competitive• High customers’ purchasing power• Hard to enter• Best defense: brand name power• Basic formula: when there is a high brand recognition,
there is a higher numbers of users and subscribers (and vice versa); and when there are both of the characteristics above for an online ad provider, there will be more customers and profits to the provider.
• Not so basic: innovation (Google and PageRank; bing and excitement)
• Think a new company can enter that industry?
Revised 4 Action Framework
Google's Current Value
Curve
REDUCE:- Search engine
- Advertising- Cookies on user's computers
CREATE:- Chrome OS
- Google Internet
RAISE:- Mobile devices and services
ELIMINATE: - Google Earth
Value Curve
Adverti
sing
Search
Engine
Cookies
Mobile
Servi
ces
Operating Sy
stem
Internet
Earth/Sa
tellite Sy
stem
Online Books
Downloadable maps
Competitors
High
Low
Google Competitors Google
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