Google - An In-depth Analysis

- 46 mins

Google - Case Study

By: Robyn Crean, Jason DiCarlo,

Amy Granville, Isaiah King

Table of Contents

Pages

  1. Company Background 3 - 8

  2. General Environmental Analysis 9 - 16

  3. Industry Analysis 17 - 24

  4. Competitor Analysis 25 - 28

  5. Internal Analysis 29 - 32

  6. SWOT 33 - 38

  7. Strategies 39 - 42

  8. Works Cited 43 - 45

Company Background

America’s top search engine company, Google Inc., was founded in 1996 by Sergey Brin and Larry Page. The two met at Stanford University where the concept of Google began simply as a research project. This project transformed into a search engine that was originally designed to examine connecting links between web pages in order to determine a site’s authority. In 1998, Page and Brin set up their first data center in Page’s dorm. As their project slowly began to grow, the duo was noticed by fellow Stanford Alumni, David Filo, the creator of Yahoo, who encouraged them to continue their efforts.1

Their next step was to seek out investors to back them up. Andy Bechtolsheim, one founder of Sun Microsystems, invested $100,000 in the company after receiving a demo of their search technology. Eventually, Page and Brin were able to raise over $1million. Now with plenty of investors to support the duo this was the perfect time for the company, which was in the midst of a dot-com boom, to emerge into the market.2

Google Inc. was officially established on September 7, 1998 in a friend’s garage in California. The name “Google” was derived from a misspelling of Page’s original name, “Googol,” which is a mathematical term for the number 1 followed by 100 zeroes.3  By the end of 1999, Brin and Page dropped out of Stanford’s Graduate Program in order to concentrate on the company.

By mid-1999, Google received a $25million round of venture capital funding and processing 500,000 queries per day. In their humble beginnings, Google served over 10,000 queries daily and quickly gained a reputation as a trustworthy source of information.4 By 2000, Google.com released different versions of the site offering various languages such as: French, German, Italian, Swedish, Finnish, Spanish, Portuguese, Dutch, Norwegian, Danish, Chinese, Japanese, and Korean. Now that the website could be used internationally, Google’s growth continued.5

By 2002, the Google News Service was launched. This service offers users a “comprehensive up-to-date news coverage, aggregated from sources all over the world.”6 Later in 2005 Google released: Google Maps, Google Earth, and iGoogle. These services gave Google a larger range of products in order to reach out to an even larger audience.7

A new verb, “to Google” was officially added to the Oxford English Dictionary on June 15, 2005. In 2006, Google took a huge step forward by purchasing YouTube. YouTube, the world’s most popular online video site, hosts users who are watching approximately 4billion hour’s worth of videos each month as well as uploading 72 hours worth of videos every minute. Originally, YouTube planned on operating independently, while its co-founders and 67 employees worked within Google.8

In 2007, Gmail became available to the general public. Venturing into the email market was a huge step for Google. Also in 2007, Google made its largest acquisition to date, purchasing the online advertising firm, DoubleClick, for $3.1billion. Over the next couple of years Google continued to introduce products that would keep them relevant as well as showing diversity.

The introduction of Google Chrome, the company’s first web browser, began in 2008 and quickly took off. Following Google Chrome was the release of their first Android-based phone, the T-Mobile G1. The following year, Sergey Brin and Larry Page were named the fifth most powerful people in the world by Forbes magazine.

In 2011, the long awaited Google +1 was launched. Google launched a promotional video for the +1 button explaining the social feature. “When you click +1, you’re telling your friends, your family and the rest of the world, ‘This is something you should check out!”9 This feature, which is very similar to Facebook’s “Like” button, was Google’s attempt to branch out into the social media market.

Overall, Google offers many services and devices but they are best known for their search engine. Google has branched out into various services over the years which has helped them become the successful company they are today. Their primary and most successful service is Google Search. Google revealed that they are procession 100billion searches per month or 1.2trillion per year.

Gmail is by far the best email platform in the world. Embraced by millions it has changed the way many individuals communicate. Google has opened up the email market by diminishing the worry of storage by allowing users unlimited space, allowing them to save as many emails as they deem.

Google Maps has been around for quite some time but didn’t really become successful until the app was installed onto phones.10 Originally, Google Maps used to be a case of printed off addresses with scrawled directions. Today, with its updated technology, Google Maps is a popular application used by drivers in order to navigate.11

Google News was launched in 2009 and remains one of the top sources for news on a daily basis. On Google’s website, Google Earth is described as a “virtual globe, map and geographical information program.”12

Google Apps are used by people worldwide on a daily basis. These features include Google Calendar, Google Talk (Chat), and Google Docs/Slides/Sheets. The newly popular Google Docs, Slides, and Sheets are productivity apps that allow individuals to create different types of documents online, working on them in real time with other people, as well as storing them in a Google Drive online free of cost. Another innovative feature is that Google Docs automatically saves ones work to their drive, elimination the fear of losing all material if ones computer crashes or shuts down.13

Google Alerts is a small but useful little product that many people depend on to keep them informed of personal or brand mentions. Other features that Google offers thar are usually overlooked include: Picasa, FeedBurner, Google Translate, Google Books Blogger, Google Street View, and Orkut. There are other tools used by students and big companies as well including: Google Scholar, Google Analytics, Google Ventures, Adwords, Google Voice, and Google Finance. The Scholar, Analytic, and Finance tools are the most popular in the business world and are extremely reliable providing real time information.14

Google has also bought other companies in order to add more to their resume. Google’s first acquisition was the Usenet Company, Deja News,15 and its services then became Google Groups.16 Next, Google acquired Dodgeball,17 a social networking service company,18 and eventually replaced it with Google Latitude.19

Other acquisitions include web application company JotSpot,20 which became Google Sites. Later, voice over IP’s company, GrandCentral, later became Google Voice, and video hosting service company Next New Networks became YouTube Next Lab and Audience Development Group.21

Lastly, Google has also ventured out into the mobile cell phone market. They sell a range of Nexus and Android phones, which are not yet Apple’s level, but are quickly gaining attention.

Google offers products that most individuals need or could use on a daily basis, with the list continuing to grow. By increasing their product diversity to their list, Google is successfully adapting with the times and staying relevant. Today, Google may be a huge success however staying on top is an important key factor in their future success.

General Environmental Analysis

Technological Trends

Google is a popular search engine that uses text-matching techniques to find web pages that are important and relevant to a user’s search handling more than three billion searches per day.22 Google’s primary technological advance is its web search functionality. It is an indispensable feature of the Internet as well as an essential factor to its business.23 Due to the never ending change in technology, programmers and engineers are working constantly to ensure search results are as relevant as possible. More time is devoted to this process than any other Google product. Google is not only a search engine but also provides many services, tools, and products through its website.

Google Apps is a set of web applications provided by Google. These applications include Gmail, Google Docs, Google Calendar, Google Mobile, and Google Sites.24 Gmail is a free e-mail service created by Google that provides users with storage for their personal or business messages and offers the ability to search for specific messages. This program automatically organizes messages into a conversation thread and has an advanced spam-filtering technique.25

Anther app produced by Google is Google Docs. Google Docs is an online word processor, presentation, spreadsheet, and form application. This app allows numerous users to collaborate together in “real-time” to create, share, open, and edit documents online simultaneously. Forms can be created directly on the web interface, or users an upload existing documents for group online editing. All documents edited or created online can be saved to a user’s computer in various formats. As a useful feature for users, Google servers automatically save all file data In order to avoid data loss.26 Although Google Docs is less “feature-rich” as full desktop applications, such as Microsoft Office, Google Docs is available for use to anyone with a web browser.

Google Calendar is a calendar web application provided by Google allowing users to view, create, and manage their calendar events. It allows for online and mobile access, synchronization to applications and mobile devices, event reminders, and easy sharing with friends or coworkers.27 This software allows users to drag-and-drop in order to easily move events around from various dates or hours without having to reload another page. It also supports various viewing modes including: daily, weekly, monthly, and agenda views.

Mobile computing is becoming the future of technology and the Internet, therefore Google created Google Mobile in order to stay ahead of the mobile trend. Google Mobile is free applications of services provided by Google in order to enhance a user’s mobile experience. These apps can be used on any mobile device and include Gmail, Search, Maps, and YouTube.28

Another popular technological trend is cloud computing. Therefore, Google created Google Cloud, a cloud computing platform. This cloud is a network made of approximately one million servers which store data. Each server dies after three years and is replaced by a newer and faster server allowing Google’s cloud to regenerate its computing power. Google Cloud Storage allows for world-wide storage and retrieval of any amount of data at any time. Google Cloud Storage allows users to store date on Google’s infrastructure with high reliability, performance, and availability.29

Google recently launched its new Google Apps Marketplace, the first viable platform for cloud computing from third parties. This product is an online store that ultimately aims to assist individuals and organizations to discover, purchase, and deploy integrated cloud web applications that work with Google Apps or third party software.30

Another way Google is fighting to stay the best in the field of technology by purchasing various start-up companies that allow Google to benefit from the dynamism and creativity that these companies may bring. These companies specialties range in variety of fields such as: security, advertising, video, file sharing, shopping, and mobile technology.31

Another form of technology besides apps is server hardware. Google, unlike other companies, does not purchase its servers but instead builds their own. In 2006, Google was ranked the fourth largest server manufacturer in the world. Google continues to differ from other companies when it comes to their storage. Instead of investing in costly devices, Google uses a low-price, high-redundancy model. Lastly, another item that Google obtains at cheaper prices is bandwidth. Google pays minimal prices for bandwidth due to their large-scale purchase of “dark fiber.”32

Google is not only a company providing internet services and mobile applications but also have a line of hardware products. The Google Store invites consumers to Google’s hardware products that include phones, tablets, Chromebooks, TV & audio devices, and various accessories for said products. As technological advances increase, Google will continue to be successful with their original search engine and apps while also venturing out into various types of hardware.

Demographic Trends

Google is targeted generally towards everyone however, has a relatively young user base. About 60% of Americans visit Google weekly, most users being young, under 50, and college educated. Google is less affected by the ages of Baby Boomers compared to other companies which depend on the 50-60 year-old demographic group. The ratio of males to females is not affected because internet searching is not a gender specific issue. The company will further benefit from traditional or paternalistic societies begin using the internet more frequently.33

Economic Trends

Although the United States is in a period of recession, companies like Google are not affected because search and internet-based advertisements have become a staple in society and the economy. Google’s focus is currently on highly targeted measurable advertising which makes the company recession-proof.34 Google has gained an increase in demand for its services and increasing profit levels due to more business advertising. The company is expected to increase in profit levels regardless of the state of the economy due to the growing trend of businesses advertising online.35

Countries such as South Africa, India, China, and the United Kingdom have had increases in their Gross Domestic Products (GDP) which could potentially be a positive factor for Google. If these countries continue to grow at stable rates, Google’s internal and external investments will be high in numbers. The growing amount of users on the internet and search engine will positively affect Google.36

Interest rates can both positively and negatively affect an organization. Google relies primarily on investments, which come with interest rates. As these rates gradually increase over time in a country Google will benefit. For example, in the UK the rate average is around 8.2%, and in the U.S. rates stand at 6.1%. The more companies that have an increase in rates and money, the more likely they will be willing to spend on advertisements, a service provided by Google.37

Inflation rates are a problem for customers whereas companies benefit from it. The U.S., U.K., India, and China have recorded averages in inflation rates of 2.5% - 9.5% annually. From this, raw materials become more expensive resulting in companies to increase prices of their products. As the product price increases, so does the cost of a Google advertisement, resulting in more profits for the company.38

Political Trends

Most governments do not have legal or political laws for online information sharing, therefore Google’s operations remain unaffected. However, over time Google has received numerous concerns from customers in regards to user privacy. The company then responded by adding a privacy link to their home page. This link brings users to Google’s Privacy Center page where individuals can learn more about Google’s policies in regards to political and legal issues.39

Another legal issue Google faces is copyright. This company stores copies of third party web pages and images on their servers, some of which are copyright infringements. In response, Google released a Copyright Information Page providing information on digital information as well as links to notify Google and the U.S. Copyright Office of any suspected infringement.40

The Chinese Government is posing as a threat towards Google in regards to censoring search results. China has created a barrier against Google by creating regulations that forbid the search engine from operation on their terms. In 2013, the Chinese Government created a surveillance system called the Golden Shield, which monitors civilian use of the internet.41

Sociolocultural Trends

Sociocultural trends affect the way that customers respond to Google’s products. Today, there is an increase in use of social media. Although social media sites offer online advertising for companies, such as Google, social media poses as a threat. As the use of these sites increase, so do competing sites such as Facebook.42

Global Trends

The internet and search applies to most cultures worldwide, therefore Google does not face a geographic dependence. Google has 20 offices in the U.S. and other locations in over 30 countries. Google now offers personalized search engines for over 115 countries. As language support improves the company will likely gain market shares. Once computers become more affordable in various countries, those in economically disadvantaged countries will be able to gain access to the internet for the first time. Google will then be able to introduce these new users to its search engine and productivity products.43

Industry Analysis

Through a qualitative and quantitative analysis of the Web Search segment, the standout characteristics include: Intense Rivalries, Diversification, and Vertically Integrated Business Modeling. The focus of this industry analysis is Google, although it operates within several different industry codes made up by the North American Industry Classification System (NAICS) and Standard Industry Codes (SIC).44

An understanding of the essence of the climate in which Google performs an examination of its key competitors is necessary. The atmosphere, or climate, of the U.S Web Search segment that Yahoo, Microsoft, and Google perform within has been developed by the post-industrial society beginning to unfold. The post-industrial society is the stage of society’s development when the service sector generates more wealth than the manufacturing sector of the economy. The important connection between post-industrial societies and the firms competing in the Web Search segment is the fact that these companies function as services, opposed to manufacturers.

For this analysis, “post-industrial” is used in an economical or sociological manner. The post-industrialized society is characterized by the increased value of knowledge. In an economical sense, post-industrialization is characterized by employment growing faster in the third and fourth sector in contrast to employment in the primary and secondary sector. This results in the third and fourth sector having the most influence in the economy. Thus, the “impact of the expert” will grow larger allowing power to be monopolized by knowledge. Since the third and fourth sectors are essentially knowledge-oriented, a restructuring of education is likely to occur. Post-industrial societies are oriented around places of knowledge in which influence the production of experts. Consequently, the demographic that will benefit the most in the post-industrial society are young urban professionals due to their effective yet efficient utilization of technology, information, and networks.45

Industrialization is the large-scale introduction of manufacturing, advanced technical enterprises, and other productive economic activity into an area, society, or country. The definition of this era contains a timestamp along with an expiration date because the concept of large-scale manufacturing is no longer under developed. The factors that were once the main driving force of the industrial economy, labor and mass manufacturing, quickly are beginning to fade. The new factors driving the post-industrial economics and society are networks, information, data, and technology.

New firms such as Uber, AirBnB, and Kickstarter are beginning establish themselves as early adapters in this new age by designing business models around the projected economical driving forces. There are also many already existing firms who are embracing this economical and social change. Google, Yahoo, Microsoft, and Apple are amongst the world’s top innovators because they are disrupting the concept of an industry. These firms have the capability of existing under a single company although they may operate within dozens of industries. Thanks to the increased value of knowledge from companies and consumers, concepts such as crowd sourcing and vertically integrated business models are beginning to help develop the post-industrialization era.

The Web Search and Advertising segment is considered to be under the broad category of Internet services, in which the post-industrial era has birthed. The Search Engine segment has only three direct competitors who own substantial market share.

In order to properly evaluate this segments attractiveness, Porter’s Five Forces Model will be used to measure and examine the competitive playing field. Microsoft Corporation’s Bing, Yahoo Inc.’s Yahoo Search, and Google Inc.’s Google Search are key competitors amongst each other.

The biggest threats may come from search engines within websites and apps that offer more than just searches, such as Amazon and Facebook. Thus, the possibility of an existing competitor who doesn’t have a substantial amount of the search engine market share is moderate to high.46 The post-industrial economy has enabled Facebook and Amazon compete naturally within the same environment as Google Search because the ability and function of “searching” is critical online or offline, therefore the implementation of a search function has been integrated on many levels across technology.

What makes the threat of substitution dangerously high for Google is the amount of traffic that Facebook and Amazon experience. According to Alexa.com, the most popular referred website regarding traffic analytics shows that Facebook.com ranks second domestically and globally. Amazon also ranks very high in annual traffic that could potentially lead to the substitution of Google. Although Google ranks number one globally and domestically, the threat of one of these key competitors developing an improved search engine still exists.47

The social aspect of Facebook, or the consumerist outlet like Amazon, both have a greater need for a more optimized search engine. For example, if one needed to know what kind what the process, or materials needed, in order to replace a radio within a 2015 Ford Mustang. The function of an optimized search engine within Amazon.com would allow for consumers learn what they could from Google while also providing the most popular online marketplace. This would be good for Amazon because it will increase user retention by forcing them to stay one website for access to knowledge and a marketplace. This would also lead increased traffic for Amazon because there would be less of a need for Google’s weaker search engine.

Theoretically, if Amazon and Facebook were to develop a stronger search engine, Google would be virtually useless. However, if Google continued to dominate the science of search engineering, competitors who pose a threat of substitution, will still have full functionality.

What prevents Facebook, Amazon, or any new entrant from competing within this segment is due to the complexity, popularity, and strength of Google’s search engine. The differentiation of Google’s service brings with it a strong customer loyalty by providing unique searching experiences acts as one of the strongest barrios block new entrants from this segment. Web search functionality is ultimately how Google began and still remains at the heart of what they do today. Google’s web search is considered to be indispensable due to its investments within research and development and human capital. These investments have allowed the programmers and engineers of Google to constantly make search results and page rankings as relevant as possible. Google’s searching service also has the global market firmly grasped. The firm’s web search service is operates 160 localized country/regional domains. Google also offers the ability to search for results in 130 different languages. The low threat of new entries also comes from within Google’s vertically integrated business model. What this allows is instead of buying server hardware from HP, Dell, and IBM, Google instead creates their own servers. The Gartner Group, and information technology research and advisory firm estimated in 2006 that Google was the fourth largest server manufacturer in the world. The expense of storage is unusually low for a firm such as Google because they invest in hardware that isn’t expected to be of high quality but instead low in price.”48 There are wide spread rumors of Google paying very little costs for bandwidth usage. Costs for bandwidth are believed to be so low due to the investments Google made in “dark fiber” – fiber optic cable that was laid in the dot-com era. As of April 2010, Millward Brown Optimor, a consultancy who issues annual reports aimed at measuring the intangible worth of brands, named Google to be in the top four of that category.

Ultimately, Google isn’t worried about the threat of substitution. The threat of substitution is low because Google essentially depends on the Internet’s existence and functionality for its survival, rather than traditionally performing within a competitive environment. While its competitors where spending millions on building brand during the dot-com boom, Google instead focused on quietly building upon its strongest barrier of entrance, the search engine.

One of the most effective ways to remove the threat of supplier power is through the implementation of a vertically intergraded business model. This worked in the favor of Google as an advantage because it removed the dependence of outsourcing less effective components from other firms. This allowed Google to customize their servers and also become the fourth largest sever manufacturer in the world. Google also holds immense supplier power toward its consumers through Adwords. Adwords has become an easy and common way for companies and individuals to generate revenue through their websites. Other competitors within the Web Search segment face more of a threat from suppliers due to strategy of outsourcing. This threat at large isn’t much worry for these competitors because hardware such as servers has become commodities for large business. Although, storage along with bandwidth have been known to be harder or more expensive to obtain suppliers. The chance of any of these suppliers entering the Search Engine segment is highly unlikely.

As mentioned previously, Google and its competitors generally depend on the Internet’s existence and functionality for their survival. Since Google and the other competitors of the Web Search segment provide a service that is free, there’s virtually no buying power that’s even able to exist.

Through the utilization of Porters Five Forces model, the Web search segment has proved itself to be attractive. Competitors within this segment, such as Google, have set barriers for substitution or new entrants very high. Google has invested incomparable amounts of research and development into its Web search service versus its competitors Yahoo and Bing. In 2009, Google spent 12% of its operating expense dollars versus Microsoft who spent 15%. Even though Microsoft seemingly spent more on research and development, it is important to note that Microsoft is in the business of hardware, so it’s important that one assumes that not all of that 15% is being allocated to its Web Search segment. In 2013, Google was the top 9^th^ spender globally in research and development.49

Google is in the business of advertising and EMarketer estimates that Google’s 2015 search ad revenue will grow to $44 billion worldwide, a 54.5% share, with Microsoft and Yahoo combined taking just 6.5%.50 The threat of any new entrance seems likely to be the biggest threat within this segment, although it is highly unlikely. Indirect competitors such as Facebook and Amazon have almost all the resources to enter this segment as a top competitor. The amount of intellectual capital these two competing firms contain is still not enough to take the top spot because Google has developed its service intensively for more than two decades. The algorithms and web crawling techniques Google has developed has prevented any substitute or new entry within the Web Search segment from outperforming the firm, almost creating a monopolized segment. The result of these segments and their attractiveness also rely on the low position that buyers and suppliers have. The vertically integrated business model Google has implemented has prevented suppliers from having any type of power. Other competitors face a low to medium threat due to not having full control of their needed supplies, although hardware such as servers are being sold as commodities to large business. Buyer power is relatively low, although Google and Bing’s Web Search service income depends on the purchase of advertising space that individuals and companies seek out. But since Web Search is most commonly utilized as a free service, buying power doesn’t have much influence. The completive environment of the Web Search segment has arguably become a duopoly that is dictated by Google and Bing. Bing and Yahoo’s search engine combined, make up 32% percent of the U.S. market, while Google accounts for 64%. Although it seems unlikely that Bing will overtake Google, the search engines within Facebook, Amazon, and other sites could shift how Internet search segments perform and compete.

Competitor Analysis

51

           **Google**   **Yahoo**

Market Cap 495.93B 33.20B Employees 59,976 12,500 Revenue 71.76B 4.95B Net Income 15.44B 242.18M EPS 23.72 0.26

The competitive industries that Google operates in cannot be classified by using only one or two industries. Its diversified portfolio spans a wide array of products and services, all revolving around the opportunities brought on by the advent of the Internet. For these reasons Google’s main competitors include: Yahoo, Microsoft, and Apple. These companies are diversified to include several industries with the common goal of each company, to provide innovative products and services that offer consumers with the ability to access, distribute, create, and use computer data. For this analysis we will focus on the search engine product offered by these companies, with Yahoo being the closest competitor.

In 1994, Stanford University students Jerry Wang and David Flo created Yahoo when they developed “an Internet bookmark list and directory of interesting sites.” Ultimately in 2000, Yahoo formed a partnership with Google that allowed them to power Yahoo’s organic results thus effectively introducing “their largest competitor to the world,” making Google a “household name” and in the process, cutting its own throat. Five years later Google was out performing Yahoo and by 2009 it had captured 70% of the search engine market share.

As shown in the above table from November 2015, Google’s Market Capitalization is approximately fifteen times that of Yahoo’s. In terms of Market Share for search engines, Google has approximately 69% of the market, Yahoo has 9%, Bing has 12% and Baidu (China) has 7% of the market.52

Microsoft has the highest revenue out of the three search engines, however, when you break the numbers down and look purely at advertising revenue from the search engine, Google Search edges out Bing by about $8million.53 Overall, Google derives approximately 99% of its revenue from advertising. Although Yahoo is clearly not competing, they have recently shifted their focus on their search engine and are finally seeing their hard work pay off. Yahoo also stretched out the one positive revenue streak it had going, increasing its search revenue year-over-year for the fifth straight quarter.54

Value Chain

Google gathers all the web users it can by inviting them to use its top-rated search product with highly relevant results delivered promptly. Then, through assorted advertisements it directs these same web users in the form of traffic to its advertising partners who transform the traffic into sales on their sites. Google adds value not only by directing a quantity of web users to specific sites, but also by sorting the pre-qualified visitors using keyword association and search history to recognize users’ interests. Google ensures that the users who are directed to a partner site are more likely to purchase a product there.55

Internal Analysis

As you can see Google’s Revenue has increased over the past three years. An increase in revenue has lead to a constant increase in Net Income. Since we are focusing on the Search Engine side of Google, with their revenue coming from advertisements, they reported advertising revenues of $59,065,000,000 in 2014 and $50,547,000,000 in 2013. Their revenues from Google Network Members’ websites include revenues generated primarily through advertising programs including: AdSense for search, AdSense for content, AdExchange, AdMob, and DoubleClick Bid Manager. In this multi-device world, Google generates their advertising revenues increasingly from mobile phones and newer advertising formats, and the margins from the advertising revenues from these sources have generally been lower than those from desktop computers and tablets.56

SWOT Analysis

Google Inc. is an American multinational technology company specializing in Internet-related services and products having successfully captured the search engine market. The company has proved to have many different strengths due to their successful. First off, Google’s Search Engine is the most dominate search engine in the world, processing over 40,000 search queries every second on average. This translates to over 3.5 billion searches per day and 1.2 trillion searches per year worldwide. Google Search leads this market for being asked 65.4% of questions. Yahoo! Search comes in second with 15.3% queries, followed by Microsoft Bing at 10.7%.57

Google’s Search feature is something that everyone can use because it is so simple and straightforward. One search can lead to a million different answers but Google can help one find exactly what they are looking for. The Google brand recognition is so powerful that the term “to Google” is even in the Dictionary. Everyone around the world knows what Google is and what they do. When people need an answer to a question, the first thing they think of is “to Google it” because they know that whatever they are looking for will be just a few clicks away.58

Google also has a strong organizational culture that is focused on innovation, while providing quality of life to its employees. On their company website, Google proudly displays videos of its offices and employees at work. Each employee is encouraged to pursue innovative ideas about his or her passions. This is demonstrated, for example, through the spare time allotted to software engineers who are allowed to spend 2 hours per day on their own projects of choice. Google believes that fostering employee creativity and a casual environment that provides a quality of life is the best way to attract and maintain quality employees. This policy has been successful as employment at Google is highly selective and desirable.

Consequently, the Google organizational culture effectively translates into its innovative products. Google has been ranked No.1 in Fortune’s latest annual list of “100 Best Companies to Work For.” The search engine giant employs 18,500 people in the United States alone and is the most sought after employer in the world. Google has an innovative and creative culture where they promote employee well being and imagination. This company is great to work for having very low employee turnover rates by offering high salaries and good benefits to staff that will raise the company’s productivity.59

The company extended its locations abroad to locations such as Canada, Mexico, United Kingdom, South Korea, Taiwan, Puerto Rico, and Australia.  Its expansion has increased the numbers of members and this directly connected to the increase of profit. Google offers high quality products and services at low prices and they don’t sell many products. These factors lead to consumer loyalty in the long run. Google also has a strong financial performance which helps the company maintain its stand in the market and build the shareholders’ confidence.60

Google has a broad range of services such as online advertising, online display ads, and mobile advertising. It also offers various platforms and applications including: Google Apps, Google Buzz, Google Book Search, Google Checkout, Google News, Google Chrome, Google Play, Google TV, and Google Wave. The company’s future business initiatives include Google Editions and Google Android Market. The product portfolio of the company also include: Gmail, Web Search, Toolbar, Custom Search Engines, Maps, YouTube, Google Image Search, Google Scholar, Google Base, Google Finance, Search Google Co-op, Custom Search, Google Video, Google Docs, Google Spreadsheets, Google Slides, Google Calendar, Google Desktop, Google Pack, Google Earth, Google Sketchup and Sketchup Pro, Google Mobile, Google Labs, Google AdWords, Google AdSense, and Android. The pro of having all these products is that they are completely integrated with each other and work well combined together.61

Google is the largest and most favored search engine. It is difficult to locate it’s weaknesses compared to their competitors because it is the most extensive search engine available on the Web. Google’s capabilities are constantly evolving to accommodate the needs of users. Google’s existence completely relies on the internet.

There is also a lack of advertisement can be a barrier for the company to attract more customers. Google does little in the advertising department because they are such a well known brand that they don’t need advertisement, however they should keep their name relevant.

Google has been involved in many patent and litigation disputes with other companies over the years that have tarnished their reputation. Google has also been experiencing failing ad rates. In recent years, especially 2013, the company has been faced with declining revenues from ads and as a result, the profitability of the company has taken a hit. Also, many spammers manipulate Google’s ranking technology by creating dummy sites with thousands of links to pages that they wanted Google to rank highly.

Even though Google is so successful they could still be open to more opportunities. Google’s social networking could use many improvements. Google + reportedly beat out Twitter with 359 million users but is still far behind Facebooks 701 million users. Social networking is a hard market to enter into, therefore Google + is still struggling to gain attention and users. Google + is not taken seriously as a social networking site because Facebook is still the one to beat.62

The smartphone market in the U.S. isn’t saturated yet and millions still need smartphones, many of which will come with Android’s OS. Many people are against Apple products which leaves a whole market open for Google smartphones. Currently, Google has Android and Nexus smartphones but are not saturating the market how they should be.

Also, Google Ventures is a relatively new capital venture group within Google. Their main focus is investments in companies that are developing new and potentially world-changing technologies. At present, Google Ventures only considers investing in start-up firms within North America. Google has already launched a few new models of notebooks, tablets, and smartphones into the market but these were only introduction models. Google could strengthen its entry into the electronic device industry by introducing more products for more customer groups and cut out its market share. This would result in tighter integration of its software products and diversified income. Google acquisitions and mergers are highly important to the company. Google purchased Motorola in 2011, allowing the company to generate revenue from the sale of hardware and services in both the mobile and home segments. Google’s new products include: Google Glasses, electronic cars, tablets, and Google TV. Google is such a powerfully well known brand that is completely in control of the market but they still have many opportunities. 63

Google is an important company, however that doesn’t deter them from having many threats. Because the company offers a wide range of products and services, it has a lot of competitors such as retail supermarkets, wholesale stores, gas station, insurance companies, and so on. Since this monopolistic competition can attract potential competitors easily, the company can have hard time by dealing with this issue. Google is involved in numerous markets that are highly competitive. Competition could intensify with the entry of new competitors, development of new technologies, products and services, and convergence. The company witnesses competition from general purpose search engines including Yahoo and Microsoft’s Bing as well as social networks such as Facebook and Twitter. Google also faces many threats in regards to security and privacy issues. This has been a problem for Google who has been struggling to strengthen security measures to prevent outside parties from breaching the company. Google has a lot of important and fragile customer information that would cause a lot of problems if it was breached.64

Strategies

“There are many different ways you can use our services – to search for and share information, to communicate with other people or to create new content. When you share information with us, for example by creating a Google Account, we can make those services even better – to show you more relevant search results and ads, to help you connect with people or to make sharing with others quicker and easier. As you use our services, we want you to be clear how we’re using information and the ways in which you can protect your privacy.”65

Above is the opening statement from Google’s Privacy Policy regarding the utilization of private information collected from its users. If a user adheres to the policy, Google maintains the right to collect a wide range of data from the various service-platforms it offers. The truth of the matter is that all users of the Internet have different privacy concerns. Therefore, in Google’s opening statement, the firm tries to reassure the end-user by stating that all private information will be used to enhance their overall Google experience. Private information can be defined as any number or letter that spells out or represents any demographic detail of a person. Moreover, Google treats its end-users private data with much care, although it’s not Google who the people are afraid of. The people are ultimately in fear of the government tapping into our private lives. Therefore, it is critical that Google implements new strategies to prevent government infiltration, while introducing new ways of making its practices using private data increasingly transparent to end-users.66

When implementing a business-level or Corporate-level strategy, no matter what, it is important to build off of the firm’s core-competencies. The core-competencies that are found within Google Inc. are software engineering, content indexing, maintaining scalable hardware infrastructure, and the company’s culture of innovation should be considered too. These principles followed by Google have allowed them to create a solid line of core products, which include, PageRank, Indexing Technology, Google Ads, and the Google mapping platform. The resources demanded from these products require private information from end-users that exposes their geographic and demographic data.67

A quality that is working largely with, but also against Google, is the fact of how “geeky” they are. The algorithms and different engineering techniques that it takes for Google to exist seems to make it hard for them to articulate how the end-user’s information is being used, captured, and stored. The first suggestion would to be to utilize the “Google Privacy” channel on YouTube more efficiently. Currently, the Google controlled channel has only 40,000 subscribers and posts only an average of two times a year.68 The channel isn’t doing a very good job of making end-users conscious of its privacy practices. The firm could do a better job of making end-users aware of their practices by introducing an interactive video every quarter demonstrating exactly what they take from you and how they will utilize it to produce an improved overall experience. Users should be forced to watch the video as they are forced to watch an ad.

Another way of providing transparency within their privacy practices would be by utilizing their software-engineering abilities. In order to truly provide a solution toward these privacy concerns, Google first needs to know what the end-users’ main concerns are regarding personal information. In order to gain a better understanding of what is concerning these users, it would be appropriate to incorporate a semiannually poll that all registered users must participate within. This will provide a channel of communication between the end-users and Google, allowing them to focus in on the issues of privacy. Google and firms alike cannot only assume what its users are thinking – they must give their users a voice. It is important that Google has the ability to receive feedback, which will ultimately help sustain the firm in such an evolving environment.

The final suggestion of implementation this analysis encourages the most will offer is the option of “Google blackout.” Blackout searching is a quick accessible feature on Google.com that offers registered and unregistered users the option of completely anonymous web searching. The blackout feature will prevent data from being collected through its end-users on all of Google’s platforms. Google has brand equity large enough to afford the backfire from this implementation. If users choose the option to use Google Blackout, they may not notice any differences, but some users will notice a big difference from within their search results. The people who notice a difference are experiencing this because by being completely anonymous, Google loses the ability to identify you. If Google looses the ability to identify you, the user will experience search results on a broader level than what they are used to. Therefore, this will either allow the end-user to understand the importance of Google’s privacy practices by experiencing the significant changes in search results, or it will simply give the people what they want, anonymity. The means of implementation of this strategy largely depends on their software engineering team. The team would have to develop a separate platform that is accessible within Google.com. This platform would be engineered almost identically to its originator, although it wouldn’t include the various methods of personalization used to improve search results. The idea behind all of this is to help end-users realize the value of the firm’s privacy practices through helping them realize that sharing their private information is worth having the most effective Google experience.

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