Company Overview Google is the most extensive data base search and Index Company in the world.

The information gathered by Google is distributed freely via their

domain. The pervasive nature of Google is due to their ability to search and return relevant information based on the information provided by the user. With over 150 domain names, Google is one of the worlds most recognized brands and one of the top destination sites online. Google has indexed

billions of items including web pages, images, and videos. The success of Google is dependent on their ability to gather, organize, and deliver this information in a relevant and simple way back to the user. Due to the impact of the internet and its change on customer behavior, a a sophisticated search has become important channel for business. The

importance of search has allowed Google to expand into the advertisement business via AdWords and AdSense, by using search results as a hook to business who want to targeted advertisements based on a requested search query. There are currently over 150 Google domain names, demonstrating their ability to be the global search standard and this also continues to allow Google to add more information to the Google data base. Google provides targeted advertising and internet search solutions, as well as intranet solutions via an enterprise search appliance. Company Mission To organize the worlds information and make it universally accessible and

useful.i Company Background Larry Page and Sergey Brin were students in Stanford when they first decided to collaborate on a search engine called Google, a play on the word googol, a mathematical term used to represent 1 followed by a hundred zeros. The name represents the infinite amount of information available.

Their mission was to organized this information and make it universally available. The first investor was Andy Bechtolsheim, co-founder of Sun, who wrote a check for $100,000 to a company that doesnt exist yet called Google Inc. in August 1998. In June 2002, Google forges a partnership with Yahoo! to be their default search provider. Value Proposition Unlike traditional advertising and online advertising, where messages are broadcast to a general audience, advertisements on Google are shown only to people who indicate an interest in a specific topic. The raise in of Googles popularity was due to the simple interface and the sophisticated algorithm which returns relevant search results. This is done when users type their query into the search box on Google search. Customer Segmentation There are two types of customers for Google. The first type is anyone that has access to the internet. Googles brand is available in over 150 domains;

therefore Googles users are in over 150 countries, making it a global brand with global recognition. The second types of users of Google information are business. There are several segments within this B2C segment. Business use the information

provided by Google by paying for targeted advertisement based on the input from the user (AdWord). Businesses bid for sponsored real estate space

based on the users request. The other way for businesses to make money from Google is by placing Google ads on their own website. Google then

pays for the real estate on their website, this is known as AdSense. Googles Current Strategy Google used its internet search technology to serve advertisements based on website content, users geographically location or other factors. Companies who would like to use Googles system for advertisement can use AdWords and others, who would like to use Google on their site as a search engine can use AdSense. 1. AdWords - This is an online advertising model, where business or marketing team uses Google Search as an advertising media for their product(s) or service(s). Googles approach to ads is similar to search results deliver useful results. Google achieve this using the following model: Pay/Cost per Click (CPC) CPC model works in a way where businesses pay Google as soon as someone clicks on their ad from a web site. Search results appear based upon the keywords, and

relevant ads are matched and displayed under sponsored links. For e.g. a stock trading site might use keywords like Trading, Options, or Stocks etc. Exhibit 1 describes sample of Googles pricing model for pay per click advertising in USA. Exhibit 2 describes a sample layout of sponsored links. Advertisers can track and improve the ROI on these ads using i) Cost per Acquisition (CPA) CPA is the amount; advertisers are willing to pay for a conversion. For e.g. purchase or signup. ii) Conversion Optimizer It uses AdWords conversion tracking data to get advertiser(s) more conversions at a lower cost iii) Bid simulator Bid simulator helps advertiser(s) to simulate the potential impact of a Click and how they can improve their advertising model to get more clicks / traffic on their site.iii 2. AdSense This feature helps website publishers to use Google as a search engine or display relevant Google ads on their website. This also helps website publishers to earn revenue from Google, as Google Shares any advertising revenue it makes from those web site searches. Prescription for the future Google is a market leader in search and online advertisement. To remain market leader Google needs to consider following factors 1. Local & Mobile Search According to comScore's Mobile Metrics report, online directories and maps experienced the greatest growth in subscribers on a year-over-year basis (Exhibit 4). This shows how

consumers are increasingly relying on smartphones and other mobile devices to select local businesses and brands? As per the recent news on Google acquiring AdMob for mobile advertising also shows Googles interest towards mobile advertising. iv 2. Updates to Search engine Google has to keep updating its search engine to increase search speed, improved indexing and better user experience. Infrastructure also plays an important role for search engine and it also needs to be regularly updated to meet current needs.
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3. Social Media Marketing Social media sites has changed the way companies interact with their customers online and these sites are highly visited sites either through Mobiles or PCs. These sites provide an advertising platform for businesses to directly interact with their customers. A good example would be opening fan clubs for a business. 4. International Search Marketing Exhibit 5 shows that there is a 41% increase from previous year in the global search market. Exhibit 6 shows how the search is conducted in other regions and their growth. Both the studies show the depth of advertising in the international market for businesses. This provides a platform for small businesses to grow in the international market while reading the web site traffic and Google AdWords reports. Competition 1. Microsoft Bing

2. 3.

Yahoo Leapfish Google is a predominate leader in the search engine space but over the years they have had a lot of competition (Exhibit 3). From the early years, Yahoo! was the largest competitor. Yahoo! was the pioneer in the search engine space since the early 1990s. As Googles simple interface and

relevant search became more powerful, they lost their lead and in 2002 partner with Google to use Google search engine on their website. In 2008, Yahoo!s partnership with Google to use Googles search engine ended however forged another partnership with Google for advertising. In July

2009, after a failed attempt to acquire Yahoo!, Microsoft reaches a partnership with Yahoo! to be the underlining search engine for Yahoo!. Microsoft Bing is only viable competition to Googles search engine, formerly known as Live Search, Windows Live Search, and MSN Search. Bing went online in June 2009 and was known as a decision engine. In August 2009, Bing gained 9.3 percent of the United Sates Internet search market. ii This gain was at the expense of Googles market share. Microsoft spent $80 to $100 million on advertisements via online, TV, print, and radio media. Founded in November 2008, Leapfish claims to be the next startup competitor to Google. Leapfish is trying to change the playing field by

providing an aggregated site for searches. Leapfish is a search aggregator that retrieves results from other portals and search engines. This has been met with mixed reviews. One of the reasons for Googles success is based

on their ability to deliver content in a simplified display, an aggregator would only complicate search results. Also Leapfish uses the existing search Leapfish has also

engines therefore not providing value add to the users.

had a number of controversies, including abusing Googles pay per click model against Googles potential customers.

Exhibit 1 Googles pricing model for CPC model in U.S.A.

Exhibit 2 Googles AdWords Sponsored Links

Exhibit 3 - Search Market Analysis

Top 10 Search Providers for August 2009, Ranked by Searches (U.S.) Search Provider Searches (000) Month-on-Month Growth (%) 2.9 2.6 -4.2 22.1 1.8 2.9 0.5 Share of Searches (%) 100 64.6 16 10.7 3.1 1.7 1.2

Total Google Yahoo MSN/Windows Live/Bing AOL Ask.com My Web

10,812,734 6,986,580 1,726,060 1,156,415 333,231 186,270 128,432

Comcast Yellow Pages NexTag Local.com

50,328 37,923 31,830 16,314

-21.6 2.7 0.4 2.9

0.5 0.4 0.3 0.2

Source: Nielsen MegaView Search

Exhibit 4 Growth in Local Mobile Content by Genre

Exhibit 5 Search Market Overview

Exhibit 6 Search Market overview by Region

http://www.about.com http://www.reuters.com/article/internetNews/idUSTRE58K5ML20090921 http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=138148 http://blog.searchenginewatch.com/091109-141628 http://searchenginewatch.com/3635665

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