Mission: Organize the world’s information and make it

universally accessible and useful

• Founded in 1999
• Gross revenues of $6.1 billion and operating income of
$ 2 billion
• 60% of U.S search related advertising revenue
• 68% of all search traffic outside the U.S.
KEY PRODUCTS
• Search Engine
• Paid Listings
• Gmail
• Google desktop
• Google Maps
• Google Book Search
• Google Talk
• Base
GOOGLE HISTORY
• In 1998, Sergey Brin and Larry Page wrote PageRank
algorithm that delivered more relevant search results
• First round funding from VC firms Sequoia and Kleiner
Perkins
• In 2000 Google had an index of 1 billion web pages
• Replaced Inktomi as Yahoo!’s search engine.
STRATEGIC OBJECTIVES
• Started with algorithmic search
• Licensed search technology to Yahoo! and other third-party sites
• Moved into the domain of Yahoo!, MSN etc.
• Targeted e-commerce giants like eBay and Amazon
• Google Desktop, calendar, etc. competed with Microsoft
• Paid $1 billion for a 5% stake in AOL, to cut out Microsoft competition
• Introduced first paid listings, in a manner similar to Overture, but priced on a cost-per-
impression basis
• Modified Overture’s cost-per-click model by a weighted ranking method, which
maximized Google’s revenue
• Expanded to “Contextual” Page listings and later introduced Froogle – a product search
service
• Continued distinction of all aspects of the organization
• “Google is not a conventional company. We do not intend to become one.” – Larry Page
STRATEGIC OBJECTIVES CONTD…
• IPO introduced as a dual-class equity structure
• This effectively gave Brin, Page and Schmidt immunity
from replacement
• Vision to make Google become an important and
significant institution
• IPO structure influenced by practices in media business
• Emphasized that the “unconventional” triumvirate
structure was what made Google work successfully
STRATEGIC OBJECTIVES CONTD…
• Google’s values
• Don’t be evil
• Technology matters
• We make our own rules
• Manage innovation by
• Having small teams to increase productivity
• Encouraging engineers to work 20% of their time on projects they
chose
• Little middle management
• Setting priorities - 70/20/10 rule
• Willing to invest in promising long shots
E-COMMERCE - COMPETITOR
• eBay Advantage
• eBay’s strong PayPal unit facilitated transactions
totaling $18.9 billion
• eBay acquired skype
E-COMMERCE
Core competency required Does Google has it?

Supply chain management NO

Economies of scale NO
PORTAL SERVICE - COMPETITOR
• Yahoo! Advantage
• A portal, unlike Google
• In addition to tools similar to that Google offered,
Yahoo offered online recruitment site. Dating site,
Shopping service and free websites to millions of
groups
• Seamless integration and customer centric ease-of-use
• Shortcuts, editorial services, more human touch
PORTAL SERVICE
Core competency required Does Google has it?

Seamless Integration NO (its against Google philosophy)

Customer centric ease-of-use MAY BE

SOFTWARE DEVELOPMENT
-COMPETITOR
• Microsoft! Advantage
• Traditional model of charging users a license fee for
software
• Google has been able to do little direct damage to
MS applications
• SaaS omotoatove
• CRM software and collaboration tools
SOFTWARE DEVELOPMENT
Core competency required Does Google has it?

Innovation YES

Technical knowhow YES

WHAT SHOULD GOOGLE DO?
• Google does not have core competencies for an e-commerce business. Also
competition is very fierce from e-bay and other such businesses. Hence
Google should not enter this business until it develops those core
competencies.
• Google may have the core competencies in portal services and software
development. However, these businesses do not exactly align with Google’s
mission of information organization. Hence Google should not enter these
businesses.
• Google should stay focused on the company’s distinctive competence and
use them in different arenas that require search solutions
• Google may partner with e-commerce players, portals and software
developers to increase its revenues of paid listings.