INTRODUCTION Google was started as a research project by two Stanford PhD students named Sergey Brin and Larry page. They registered the domain name google.com in the year 1997 and in Septemb September er 1998, 1998, it became became a privat privately ely owned incorp incorpora orate te Google Google Inc. Inc. With With its its extensive research on search algorithms and use of state of the art technology, Google successfully established its brand name in internet search engines market. By the year 2004, Google came up covering over 75% of US web search market. Though Google is a dominating player in internet searching market, it has to compete with its rivals in this field where there is no long time entry barrier. Google can expand change its business model to survive in this best search engine race. Google's management techniques have proven to be fruitful. One of their "10 Golden Rules" Google's compilation of ten rules which help motivate their employees is place employee's in the same or even different departm departments ents in close close quarter quarterss to allow allow them them to commun communicat icate, e, which which in turn, turn, makes makes coordination extremely efficient. Google runs a unique and exceptional work atmosphere, from its constant technological advances to its friendly work environment. Google is now the most dominant search tool on the web, setting the standards that others try to follow and better, as yet unsuccessfully.
BASIC INFORMATION Public Type Menlo Park, California (September 4, 1998) Founded Sergey M. Brin, Lawrence E. Page Founder(s) Headquarters Googleplex, Mountain View, California, United States Area served Worldwide Internet, Computer software Industry $ 3,189 million (2004) Revenue $ 399 million (2004) Net income Total assets $ 3,313.4 million (2004) Total equity $ 2,929.1 million (2004) $ 3,021 million (2004) Employees www.google.com Website
GOOGLE MISSION STATEMENT Our mission is to organize the world information and make it universally accessible and usef useful ul.. We belie believe ve that that the the most most effe effect ctiv ivee and ulti ultima mate tely ly the the most most prof profit itab able le,, to accomplish our mission is to put our need of our user first. We have found that offering a high high quality quality user user experie experience nce leads leads to increa increased sed traff traffic ic and strong strong word-o word-of-m f-mout outh h promotion. Our dedication to putting user first is reflected in three key commitments we have made to our users:
We will do our best to provide the most relevant and useful search results possible, independent of financial incentives. Our search result will be objective and we will not accept payment for inclu clusion or rankin king in them.
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We will do our best to provide the most relevant and useful advertising. If any element element on a result page is influenced by payment to us, we will make it clear to our user. Adv Advertisement ent should not be an anno nnoying inte nterruption.
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We will will never never stop stop work workin ing g to impr improve ove our our user user exper experie ienc nce, e, our our sear search ch technology and other important areas of information organization.
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We believe that our focus is the foundation of our success to date. We also believe that this focus is critical for the creation of long-term value. We do not intend to compromise our user focus for short term economic gain.
EVALUATION OF MISSION STATEMENT:
Organization
Customer
GOOGLE
YES
YES
Technology
Concern for survival, Growth & Profitability
YES
YES
YES
Self- Concept
Concern for image
Concern for employee
YES
NO
NO
“
“
Product & Service
2
Markets
NO
Philosophy
Organization
Customer
Criterion Production
YES
YES
NO
Mid America Plastic
NO
NO
NO
Technology
Concern for survival, Growth & Profitability
YES
YES
NO
NO
Criterion Production Mid America Plastic
Self- Concept
Criterion Production Mid America Plastic
Product & Service
Concern for image
Markets
Philosophy
YES
Concern for employee
YES
YES
NO
NO
NO
YES
3
Organization
Customer
Product & Service
Markets
Hatboro Area YMCA
YES
Integrated Communicatio n
YES
YES
Technology
Concern for survival, Growth & Profitability
Hatboro Area YMCA
NO
YES
YES
Integrated Communicatio n
YES
YES
YES
Self- Concept
Concern for image
Concern for employee
Hatboro Area YMCA
NO
NO
NO
Integrated Communicatio n
YES
NO
YES
NO
4
NO
Philosophy
Organization
Customer
ACA
YES
YES
NO
Idaho Hospital Association
YES
YES
NO
Technology
Concern for survival, Growth & Profitability
ACA
NO
NO
Idaho Hospital Association
NO
Self- Concept
ACA
Product & Service
Concern for image
NO
YES
Idaho Hospital Association
Markets
Philosophy
YES
Concern for employee
NO
NO
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LONG TERM OBJECTIVES: OBJECTIVES: Google' Google'ss long-t long-term erm object objective ivess are to delive deliverr new advert advertisi ising ng technol technology ogy,, develo develop p tracking mechanisms, and enable users to search a larger base of information. Based on the SWOT analysis of internal and external factors, the next 10 years will define the longevi longevity ty and sustai sustainabi nabilit lity y of Google Google as a company company.. Quick Quick and dramat dramatic ic changes changes characterize the technological environment. To keep up with the market Google plans to focus on delivering new advertising technology, developing tracking mechanisms, and enablin enabling g users users to search search a larger larger base of inform informati ation. on. The creati creation on of patent patentss and intellectual property will hold the keys to gaining competitive advantages in the market. The retention and recruitment of the best human resources are also a critical factor for Google in order to reach the changing needs of consumers and advertising clients.
SHORT TERM OBJECTIVES: Google' Google'ss short-t short-term erm object objective ivess are to expand expand the workfo workforce rce for Antici Anticipate pated d growth growth,, expands expands furthe furtherr into into intern internati ational onal market markets, s, and contin continues ues develo developin ping g new produc products. ts. Expanding the workforce will help achieve the long-term objective of delivering new advertising technology. Google's organization structure is primarily functional but also includes a few geographical organizations. Google has a unique culture and policies to promote innovation.
VISION/VALUES: Google does not document a Vision or Values on the Google website. They do state a philosophy on the Google website, some are listed below: Focus on the user and all else will follow. It's best to do one thing really, really well. Fast is better than slow. Democracy on the web works. You don't need to be at your desk to need an answer. You can make money without doing evil. There's always more information available. The need for information crosses all borders. You can be serious without a suit. Great just isn't good enough. No pop-ups. • • • • • • • • • • •
Googl Googlee stri strive vess to empl employ oy the the most most quali qualifi fied ed appli applican cants ts and and rewa reward rd the the grea greate test st contributors, in order to promote good performance and facilitate hiring and retention. Google's 70-20-10 rule for employees is: • • •
70% of employee time is spent on core business. 20% for adjacent areas such as a Gmail and Google desktop search. 10% for creativity and freedom to innovate.
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Google introduced pay per click services which are the bread and butter of the new search giant.
GOOGLE’S GROWTH: Google, having their initial IPO in 2004 has grown exponentially. 2004 was a big year for internet adoption, and the first year Yahoo had a true competitor.
STRATEGIC ANALYSIS AND CHOICE : Google's search engine business is the dominant business of the Company. Google has built a competitive advantage based on search engine differentiation. Google's strategies are innovation and concentric diversification. GOOGLE’S BUSINESS LEVEL STRATEGY : Google currently pursues the generic business level strategy of differentiation. Google offers many unique products and services to many different kinds of customers. By offering so many distinct products and services, Google is able to achieve a competitive advantage. The Google web search engine, the company’s most popular service, offers users a more reliab reliable le way to search search.. Google Google’s ’s web search search engine engine has differ different entiat iated ed itsel itselff from from competing search engines by utilizing a patented system called Page Rank. Page Rank delivers search inquiries by computing a recursive score of web pages based on the weighted sum of the Page Ranks of the pages linking to them. This means that relevant web pages can be accessed based on a users search interest instead of based on how many times a search term occurs on a webpage which is how competing search engines work. The Page Rank algorithm is constantly being updated to ensure the best search results possible. Also, employees at Google keep many of the algorithm’s criteria secret. Since Google’s search engine criteria are kept secret and the fact that it is difficult to imitate intangible intangible products, Google has maintained its competitive competitive advantage and will continue to do so for a long period of time. Another Another of Google Google’s ’s product productss that that suppor supportt its its differ different entiat iation ion strate strategy gy is Google Google’s ’s internet-search-driven advertising. Google Ad Words is for advertisers who want to reach a qualified audience as efficiently as possible. What differentiates this Google product from its competitors is that it is easy to create ad text and manage online advertising accounts with no large upfront payment required. Also, the ads appear across Google’s growing roster of partners. Advertisers can even target customers in specific geographical locations.
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SUGGESTED VISION AND MISSION STATEMENT VISION “No one will stand par to us; we want to become LEADER in information & technology not pioneers”
MISSION Our mission is to provide our user one of the finest and refined searches according to their need. In parallel to this we know our shareholder’s believe and value to cater these in persistent manner, we always strive for the best. We believe that the best does not rest. Our restl restless ess workfo workforce rce always always keeps us motiva motivated, ted, we will will never never stop stop workin working g to improve our user experience.
EXTERNAL ENVIRONMENT The external environment involves three areas: remote, industry, and operating. Remote concern concernss for Google Google are new laws laws and regula regulatio tions, ns, increa increasin sing g intell intellect ectual ual proper property ty claims, and access to more information. Industry concerns for Google are competitive thre threat atss from from Yaho Yahoo o and and Micr Micros osof oftt and and new new unkn unknow own n comp compet etit itor orss that that may may be international. Agreements with advertisers could potentially become competitive as well. Operating issues are the current ad base, design of the ads, and shrinking advertising budgets of customers. The quality of service provided by the Google organization and retaining qualified help is also an operating issue.
OPPORTUNITIES • • •
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Unmapped countries 23/64 expanding services New advertisement format and tracking mechanisms Size Size of curren currentt custom customer er base base and market market share share 23/64 23/64 levera leverage ge adverti advertisin sing g agreements Offer an easy starting point Reach new user groups Reach new content Easy and expert search fully integrated using Open URL Higher usage of valuable (expensive) content
THREATS • •
Competition from Microsoft and Yahoo 23/64 greater resources, bundled serv servic ices es,, and and abil abilit ity y to attr attrac actt and and reta retain in user userss thro through ugh port portal alss Incr Increa easi sing ng intellectual property claims 23/64 resources needed for for legal claims claims
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Increasing competition reducing operating margins Shrinking advertising budgets by companies Increasing international competition New laws and regulations 23/64 domestic and international Lost sight (control) of indexing policy Possibility of censorship Users get lost/confused User ends up at wrong copy (i.e. doesn't get to the institutional subscription) Print collection become less visible Information skills will disappear Library services become less visible v isible
COMPETITIVE PROFILE (CPM) MATRIX CPM weighs international markets, as the most important item on the list of critical success factors. Google’s score on this factor is the highest in comparison to their two chief competitors, Yahoo! and MSN, reflecting a distinctive competitive advantage in the Internet market. The customer loyalty factor of Google ranks the highest, leaving behind Yahoo Yahoo!! and and MSN. MSN. Googl Googlee is ahead ahead of both Yahoo Yahoo!! and and MSN MSN on the the cult cultur uree and innovation and accountability factor.
COMPETITOR ANALYSIS
Competitor
Competitive Advantage Leading “full fledged” internet portal
Yahoo!
Strategic Direction Steering searchers to Yahoo’s own services Human intervening in search results Developing “software as services” (Windows Live) •
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Microsoft
Dominant in the PC software industry (Windows, Office etc.)
DIFFERENTIATION STRATEGY Google CTR model, assist marketer Owned by essentially 3 people Higher quality search results
Microsoft CTC model Lesser assistance Owned by many shareholders Poor search results
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Yahoo CTC model Lesser assistance Owned by many shareholders High quality but not as good
Focused on search engine business
A portal, operating system with many business lines
A portal, portal, competed in many many business lines
COMPETITIVE PROFILE MATRIX (CPM)
COMPETITVE PROFILE MATRIX
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EXTERNAL FACTOR EVALUATION (EFE) MATRIX:
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INTERNAL ENVIRONMENT This This sectio section n of the strate strategic gic environ environmen mentt is a realis realistic tic analys analysis is of Google' Google'ss intern internal al resources. The following internal traits portray a resource-based view of Google's core strengths
STRENGTHS: Strong brand name. Broad web site appeal Innovative search technology Google’s reputation and familiarity Google’s speed and user friendliness Relevance ranking based on citations Extra services Multi-disciplinarily • • •
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WEAKNESSES:
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Growing pains (i.e. finding new key employees and infrastructure) Dependence on advertising 3/898% source of revenue Google Member Network's lack of popularity Weak position in China Nearly all revenue from one product line (search) Lack of experience Heterogeneousness of the material Content is arbitrary Risk of dead-ends (users find the citation, but can't access the full text) No expert search Anglo-Saxon (English language) focus
INTERNAL FACTOR EVALUATION (IFE) MATRIX:
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STRENTH-WEAKNESSES-OPPORTU STRENTH-WEAKNESSES-OPPORTUNITIES-THREATS NITIES-THREATS (SWOT) MATRIX
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OPPORTUNITIES: • • •
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Broadband expansion. Google has a strong and talented employee base. Google can start giving full fledged services on hand held mobile devices to capture market beyond conventional internet Google is aware that customer service will play a large role in its growth as it offers offers more paid services, services, and seems committed committed to improving improving services for those kinds of customer’s overtime. Google can also merge with an established mass-market portal to lock in large number of users and advertisers. Google can start new services like multimedia, product search, private database, and print media. Google Google can enhance enhance person personali alized zed and locali localized zed search searching ing and can also also add localized paid listings of advertisers. Google can add “sticky” like chat rooms and email systems to attract users and survive in tough competition. Google can become a mass-marke mass-markett portal like Yahoo and MSN and can increase increase switching cost for its users. Google has penetrated markets that are still untouched by competitors. SO Google can increase switching cost by tracking users’ search histories with their permission and could remind users through emails for the relevant search updates as per their personal interest.
STRENGTH: •
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Google Already number one search engine has established a brand name, in which its users trust. It’s dependable, reliable and fast. Strong brand name. Broad web site appeal Innovative search technology Google needs very little end user marketing as the name itself is getting word by mouth publicity. Googl Googlee has has a simp simple le inte interf rfac acee and and it give givess comp compre rehe hens nsiv ivee resu result ltss with withou outt confusing its users. Google has low operation cost as it uses low cost UNIX web servers for indexing millions of web pages across internet. Google has hired PhDs who are continuously working hard in order to enhance search algorithms and make searching faster, efficient and relevant. By 2003, Google has already powered over 75% of the 300 million searches conducted daily in the U.S. and 300 million plus outside the U.S. Google provides an interface to 88 languages to make it comfortable to search for its users in different countries.
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Google uses state of the art search technology to index pages regularly in order to give most updated results to its users. Goog Google le also also weig weight htss the the vote votess and and rank rankss web web page pagess with with its its Page Page Rank Rank technology to give its user access to most important pages first. Goog Google le is not not bias biased ed towa toward rdss adve advert rtis iser ers. s. It clea clearl rly y sepa separa rate tess rele releva vant nt advertisements and actual results by giving “Sponsored Links” tag to sponsored results when user searches to get information with some keyword. Moreover, it also ranks sponsored links to keep most relevant sponsored links on the top. Google offers localized search called “search by location” where users can get results showing vendors, products and services nearby their areas. Google also has a range of innovative additional services like Images, Groups, Directory, and News. Google didn’t complicate its website by making itself a portal; rather it kept tabs for these services on its homepage so users can easily navigate and that also keeps the website as simple as it was earlier. Goog Google le has has also also come come up with with solu soluti tion onss for for wire wirele less ss hand handhe held ld devi device ces, s, personalized toolbars, catalogues which are added essence strengths. Google quickly routes the user to the webpage and doesn’t linger for ad revenue.
THREATS: Google commands about 50% of all online searches and Yahoo! has only 24% according to Neilson/Net Rating. Consumer attitudes towards online advertising may become more negative. Increasing strength of competitors. Social websites such as MySpace and Facebook are now breaking into the online advertising market. Yahoo! Inc. has beaten Google in the mobile market. Yahoo! Inc. has many more auxiliary products compared to the competition. Yahoo! Inc. has strong brand recognition. Inform Informati ation on access access through through Yahoo! is availabl availablee to anyone anyone with with intern internet et access. Google partially depends upon some portals like AOL. Getting those contracts terminated, Google would lose considerable share of its revenue. There is no long time entry barrier in this business. Many competitors can emerge in coming years with same services, better interface and names and can catch up Google’s market Google is pushing into a whole host of businesses in which it is a newcomer, such as Google Apps, Google Voice, and now Google Maps Navigation. It can either rise or fall in it. Googl Google’ e’ss conf confus usin ing g Cost Cost per Clic Click k rank rankin ing g and char chargi ging ng poli policy cy could could disappoint its advertisers and company would start loosing many of them. •
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WEAKNESSES:
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Many spammers manipulate Google’s ranking technology by creating dummy sites with thousands of links to pages that they wanted Google to rank highly. Google’s link based ranking did not employ actual traffic analysis. Google’s Cost Per Click advertising charging and ranking policy is confusing and makes it difficult for marketers to predict where their ads would be positioned po sitioned and how much they would cost. Google’s contextual advertising was perceived by marketers to be less effective in generating sales because visitors to web pages showing editorial content were less likely than searchers to be ready to buy. Contex Contextua tuall search search algorith algorithms ms are not 100 100% % perfec perfectt and many a times times make make mistakes. Google Google’s ’s locali localized zed search search algori algorithm thmss too someti sometimes mes result result in errors errors due to automated indexing. Google’s business model is complex, depending upon both google.com and mass market portals for its revenue. Although Google is a dominating player among search engine websites, only 50% to 65% of web search queries are answered accurately by it. Google doesn’t have “sticky” like Yahoo! And MSN have which can attract users. Google doesn’t have highly personalized search by which it could charge users with switching cost if they decide to leave Google’s services. Yahoo! Inc. has beaten Google in the mobile market.
COMAPISON OF GOOGLE, YAHOO AND MICROSOFT YAHOO: • •
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Been in the search game for many years. Is better than MSN but nowhere near as good as Google at determining de termining if a link is a natural citation or not. Have a ton of internal content and a paid inclusion program. both of which give them incentive to bias search results toward commercial results Things like cheesy off topic reciprocal links still work great in Yahoo!
MSN SEARCH: • • • • • •
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new to the search game is bad at determining if a link is natural or artificial in nature due to sucking at link analysis they place too much weight on the page content their poor relevancy algorithms cause a heavy bias toward commercial results likes bursty recent links new sites that are generally untrusted in other systems can rank quickly in MSN Search things like cheesy off topic reciprocal links still work great in MSN Search.
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GOOGLE: •
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has been in the search game a long time, and saw the web graph when it is much cleaner than the current web graph is much better than the other engines at determining if a link is a true editorial citation or an artificial link looks for natural link growth over time heavily biases search results toward informational resources trusts old sites way too much a page on a site or sub domain of a site with significant age or link related trust can rank much better than it should, even with no external citations they have aggressive duplicate content filters that filter out many pages with similar content If a page is obviously focused on a term they may filter the document out for that term. On page variation and link anchor text variation are important. a page with a single reference or a few references of a modifier will frequently outrank pages that are heavily focused on a search phrase containing that modifier Crawl depth determined not only by link quantity, qu antity, but also link quality. Excessive low quality links may make your site less likely to be crawled deep or even included in the index. things like cheesy off topic reciprocal links are generally ineffective in Google when you consider the associated opportunity oppo rtunity cost
STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX INTERNAL STRATEGIC POSITION FINANCIAL STRENGTH Market Capital Return on Equity Current Ratio Gross Profit Margin COMPETITVE ADVANATAGE Market share Customer loyalty Website quality Technological know how
EXTERNAL STRATEGIC POSITION ENVIRONMENTAL STABILITY Technol Technologic ogical al Changes Changes Rates Rates of Inflat Inflation ion Demand Demand variab variabil ility ity Compet Competit itive ive pressu pressure re INDUSTRY STRENGTH Growth potential Profit potential financial stability Ease of entry into the market.
FINANCIAL STRENGTH: The market capital for Yahoo! is 37.25 billion, Google is 150.03 billion and the industry is 296.7 million. The return on equity for Yahoo! is 8.5%, Google is 23.26% and the industry is 12.1%. The current ratio for Yahoo! is 2.54, Google is 10. The gross profit margin for Yahoo! is 3.75 billion and Google is 6.38 billion. INDUSTRY STRENGTH: 18
There is unlimited growth potential in the industry due to the increasing use of the internet. There is an increase in the amount of advertiser spending on the internet which will create high profit potential. The industry is stable due to the increasing use of the internet. New internet companies are not as lucrative as Yahoo! and Google so therefore the ease of entry into the market is relatively low.
ENVIRONMENTAL STABILITY: Techn Technol ologi ogica call chang changes es are are occur occurri ring ng rapi rapidl dly y and and are are incr increa easi sing ng the the dema demand nd for for technol technologi ogical cal experts experts Inflat Inflation ion will will hinder hinder profit profit in overse overseas as ventur ventures. es. Demand Demand is relatively stable for advertising on the internet. There is an increase in competitive pressure between Yahoo!, Google, MSN and other well known companies. -13
COMPETETIVE ADVANTAGE: The market share is increasing globally. Customer loyalty is very low. Websites are increa increasin sing g in quality quality and ease ease for all users. users. Google Google offers offers many unique unique produc products ts and services to many different kinds of customers. By offering so many distinct products and services, Google is able to achieve a competitive advantage.
Google’s Percent of Revenue by segment (year ended December 31) 100% 80%
Google Google we b sites
60%
Google network
40%
advertising
20% licensing & others
0% 2002 2002 2003 2003 2004 2004
BOSTON CONSULTING GROUP (BCG) MATRIX INTERNAL-EXTERNAL MATRIX GRAND STRATEGY MATRIX QUANTITATIVE STRATEGY PLANNING MATRIX (QSPM) ADVANTAGES AND DISADVANTAGES OF ALTERNATIVE STRATEGIES
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ADVANTAGES DISADVANTAGES
Google’s Cash Flow
STRATEGY ANALYSIS: Google Google Inc. Inc. is a single single-pr -produ oductct-lin linee busine business ss search search engine engine technol technology ogy.. In order order to compete with other media titans such as Microsoft and Yahoo!, Google has sought to employ the power of differentiation to create a competitive advantage. The strategies of Google have been focused on becoming a search engine that in the words of the firm's co-founder, Larry Page "Understands exactly what you mean and gives you back exactly what you want" (Google, 2005d). In the case of Google, by applying concentric diversification focus on the core product of search services services the company company has also been able to benefit from a competitive competitive advantage advantage in "faster (Google, 2005d). "faster respons responsee times, times, greater greater scalabi scalability lity and lower lower costs" costs" (Google, Hence, not only does Google have a high advantage in the differentiation arena, but a cost and speed advantage as well. According to Allen Weiner one key element in the media strategy of Google's future will be making searches more relevant and useful to end users and maintain its competitive edge over other search providers by retaining and growing.
RECOMMENDED STRATEGIES: •
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To have a corporate structure which allow quick decision making & encourage innovation unlike competitors. Higher focuses on innovation, 20% policy, result in new products. To offer News, free software to marketers so they could optimize their investment in Google No adoption of commercial agendas unlike competitors, focus only on improving algorithms for better results Focused search engines like Froogle which are for specific products.
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Faster, better search with many enhanced features like search history , language flexibility etc. Google should offer personalized features like personalized search, search history Expand service range add features like desktop search , base , search Gmail, Higher quality of accurate search results obtained faster Competitive rates to advertisers & better services like Google wallet, to increase their sales and reduce costs Google should lock itself as dominant design preferred by customers & firms who would incur switching costs if they changed their search engine. Google should bring the online video site, which contain contain videos of every related related topic. To reach an agreement to acquire DoubleClick A browser designed to be fast enough for the modern web
LONG TERM OBJECTIVE IMPLEMENTATION IMPLEMENTATION CONTROL Monitor Monitoring ing strate strategic gic projec projects ts must must involv involvee conting contingenc ency y planni planning ng in the event event that that Google's present product offerings become obsolete with the invention of new internet devices and in case of a competitive threat. This can be done by continuous monitoring of competition and expanding current product offerings. Gathering of data detailing consumer needs and search preferences will ensure that Google continues to be an industry leader among search engines. Establishing realistic time frames and goals for milestone reviews will be significant since Google is growing at such a rapid pace and lacks experience in areas such as the Time Warner/AOL alliance. Identifying the correct monitoring systems will be essential to the continued success of Google.
FINANCIAL ANALYSIS OF RECOMMENDED STRATEGY: Google not only entered the .com scene much later than Yahoo and Microsoft but the financial world as well. Nevertheless, given the phenomenal results of the fairly recent and unique IPO of the company's dual-class shares, from around $100 in late 2004 to over $400 in future. One can gather that this company is projected to be successful. In fact, it is expected Google's 2005 revenues to increase 91% in 2005. It is estimated that 2006 and 2007 will see 88% growth in Google's gross margin. This seems in line with Google's historical compounded growth rate of revenue being 94% and of net income being 59%. Revenues will benefit from increased spending on Internet advertising, the effici efficiency ency and appeal appeal of keywor keyword d search search adverti advertisin sing, g, market market share share gains gains in certai certain n segmen segments, ts, new offeri offerings ngs,, and intern internati ationa onall expansi expansion. on. Actual Actually, ly, media media advert advertisi ising ng accounted for 99% of 2004 revenues at Google. 2004 saw online media companies generate $9.6 billion in advertising revenues. Furthermore, this was a record figure and
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an increase of 33% from the $6.432 billion in advertising revenues generated by online media companies in 2003". It is estimated that the average (advertising) price per click will be 56 cents in 2006 and 60 cents in 2007 and the click-through rate will be 23% in 2006 and 24% in 2007. Google's volume of searches will increase from 72 billion in 2005 to 91 billion in 2006 and 124 billion in 2007. As online media continues to increase in popularity, there should be a gradual shift of advertising revenues and budgets to new media from conventional media.
STRATEGY CONTROL Strategic controls can be largely affected by environmental factors. Consider the negative consequ consequence encess of a signif significa icant nt power power outage outage.. Google Google syste systems ms are vulner vulnerabl ablee to any electr electrica icall servic servicee disrup disrupti tions ons result resulting ing in servic servicee being being impact impacted. ed. For exampl example, e, in November, 2003, (Google) failed to provide search results for approximately 20% of traffic for a period of about 30 minutes. Additionally, any disruptions in service will tax the entire Google system and result in lost revenue. Another environmental concern is new technologies that do not compliment Google's current operating systems. For example, the number of people who access the internet through through devices devices other than personal personal computers, computers, including mobile phones, hand-held calen calendar darin ing g and and emai emaill assi assist stan ance ce,, and and tele televi visi sion on setset-to top p devi device ces, s, has has incr increa ease sed d dramatically in the past few years. Expanding Google's product offering to meet all user needs will limit the threat of alternative internet devices.
RECOMMENDED ANNUAL OBJECTIVES Google' Google'ss short short-te -term rm object objective ivess are to expand expand the workfo workforce rce for antici anticipate pated d growth growth,, expand expand furthe furtherr into into intern internati ational onal market markets, s, and continu continuee develop developing ing new produc products. ts. Expanding the workforce will help achieve the long-term objective of delivering new advertising technology. Googl Google' e'ss orga organi niza zati tion on stru struct ctur uree is prim primar aril ily y func functi tion onal al but also also incl include udess a few few geograp geographic hical al organi organizat zation ions. s. The average average manage managerr has 20 direct direct report reports. s. The human human resources function will strive to hire only the most brilliant people. Job candidates are to be taken difficult tests and go through an intensive interview process. Google will offer generou generouss stock stock option optionss to retain retain the best best talent talent and align align employ employee ee intere interests sts with shareholder interests. Google will operate primarily through small, focused project teams that may remain together only a few weeks before team members are reassigned to other projects.
RECOMMENDED POLICIES There are two unique policies suggested to promote idea generation and feedback. Every employee has to post a weekly review of his or her activities to the company website. Employ Employees ees will will be encoura encouraged ged to post post ideas ideas on an electr electroni onicc mailin mailing g list list softwa software re application that delivers the ideas to every employee in the company.
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Google’s core competence is its strong search technology which gives accurate results to its users and that also at the right place without misleading them. Google should concentrate on making its search engine much more accurate, releva relevant nt and dependa dependable ble which which is most most impor importan tantt thing thing as far as the user’s user’s object objective ive is concern concerned. ed. Gettin Getting g more more users users would would also also help help the compan company y in getting more advertisers and ultimately earning revenue. Google should start giving services like print, multimedia, travel, mail, Instant Messaging etc. to compete with one stop portals like Yahoo and MSN, but without without changing changing its simplicity simplicity and comprehensiv comprehensiveness eness.. Google can navigate navigate users by putting simple links on its homepage and at the same time it would be able to sustain its traditional looks. Google has already started contextual and localized search solutions. It should improve the quality and relevance of results of these services as well as should start start gather gathering ing revenue revenuess from from adverti advertiser serss who are coverin covering g certai certain n areas areas and willing to pay only for the results which are accessed by the users of the area in which they are providing services or products. Google should also put in efforts to improve its search algorithms and stop spammers from spoofing and getting their pages ranked high. Google should also start providing personalized search solutions by storing users’ information with their permission and making web search comfortable for them when they come back. This would help the company in generating long term relationship with the customers. Google Google should should regula regularly rly take take feedbac feedback k from from its advertise advertisers rs and should should make make changes in its charging and ranking policies if it is appropriate for both the parties as well as in favor of search engine users. Google can also generate revenue by indexing database of large organization and providing them private search solutions.
CONCLUSION Google has cutting cutting edge technology technology and excellent excellent minds behind it and it should use that in providing users with 100% relevant search results. Though rival portals are coming up with strategies to handcuff users but finally users would choose the one who gives most accurate accurate search search results. results. As far as profit profit is concerned, locking in maximum maximum market from quali quality ty serv servic ices es woul would d autom automat atic ical ally ly help help Googl Googlee in attr attrac acti ting ng more more numb number er of advertisers to make money from. Google should try to encourage its users to solve their issues through forums and troubleshooting pages. It turns to the solution Google employs for just about everything an algorithm to get the most relevant information regarding support issues on those pages and before the people who need detailed answers, and fast. Google is aware that customer service will play a large role in its growth as it offers more paid services, and seems committed to improving services for those kinds of customers over time.
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