Case Study: Google Inc.

Table of Contents

Introduction ................................................................................................................................... 1

Company History .......................................................................................................................... 1

What should Google do? .............................................................Error! Bookmark not defined.

Key factors behind Google‟s early success ................................................................................. 2

Option 1 - Focusing on Google‟s distinctive competence .......................................................... 4

Option 2 - Branch out into new areas .......................................................................................... 5

Option 3 – Developing products to compete with Microsoft ...................................................... 6

Google‟s distinctive governance structure, corporate culture, and organizational processes as

assets or liabilities ....................................................................................................................... 6

Conclusion ..................................................................................................................................... 7

References ...................................................................................................................................... 8
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Introduction

Google Inc. was established in 1999 as a privately held company by Larry Page and

Sergey Bring. At the time of the established by the company, both of them were students at

Stanford University. As a matter of fact, this American organization, as of now, has become a

multinational public entity that invested in advertising, internet search, and cloud computing

technologies (Vise, 2007). In fact, Google hosts as well as develops a number of internet base

services and products and reaps profits mainly from Internet search technology to serve

advertisements base on internet, the geographical location of users and other factors. However,

this program is run through AdWord and Adsense.

With the passage of time Google has enlarged is present online video streaming and

advertising markets by acquiring YouTube and DoubleClick and has exhibited its capability to

capture cross-sided networks with the introduction of products such as Google Checkout and

Google Finance. This mainly infers that Google was stepping into the world of e-commerce

market and thus was posing a serious challenge for Amazon and eBay. Besides this, Google has

includes some of the personalized features to its homepages that strode company towards portals,

such as that of Yahoo! Google even posed a greater challenge for industry leader Microsoft with

the introduction of ad-supported software that included calendaring, e-mail and document

management system. However, these particular actions ignited competitors pertaining to the

strategic objectives of Google and compelled them to think what Google will do next.

Company History

With the expansion of World Wide Web, the demand for search services also witnessed

corresponding stretch. Yahoo! was one of the first moves into the internet search services that
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opted to organize sites into the categories of human editors. However, with the growth of the

web, the classification of the directory becomes insufficient. Many of other search engines also

stepped in the internet search market such as Inktomi and Alta Vista, which used technology that

used, automate search software, i.e. crawlers (Vise, 2007). This software created searchable

index page count with algorithms that ranked pages on the basis of its relevance to keywords, as

soon as irrelevant listings returned; many of the users got frustrated.

As of January 1996, Larry Page and Sergey Brin, often known as „Google Guys‟, began

working on a research project to make search engines able to exhibit a better search results. They

created a new relationship between web sites and called it PageRank. The relevance of website

was determined by the number of pages and their relative importance, which was linked to the

original website. In June 1999, both Page and Bin, announced their first campaign of funding for

their startup company called „Google.' In fact, after the one year Google's index crossed one

billion web pages and smashed all rivals. Consequently, Google replaced Inktomi as Yahoo!‟s

search engine. At the outset, Google had no advertising and provided search results without any

communication or content tools. But, the other portals offered numerous add-ons to endorse

users to surf, and this yielded enormous advertising revenue.

Key factors behind Google’s early success

As a matter of fact, Google is the most well-liked search engine these days. The

organization is broadly known for its unique algorithm and unparalleled search engine

technology. However, such state of art algorithm and strategic use of software and hardware

technology can be attributed as one of its key early success factors. The other success factor of

Google is, without any doubt, is the PageRank, cleaner and faster-indexed web pages and unique
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combination of the algorithm that includes much relevant information that its competitors. Such

attributes give users the most appropriate and useful results without experience any frustration.

The network of Google remained successful to fetch more advertisers due to the high influx of

traffic at lower minimum cost. It is pertinent to mention here that in a span of one year, Google

indexed more than one billion web pages, which is far more than its competitors. This means that

Google is able to provide more relevant search results despite unclear and complex queries.

It is clear that Google‟s innovative approach regarding search technology has fostered it

to be number one is the search engine market. Over the time, Google has persistently improved

its technology to bring more appropriate and desirable search results for surfers by introducing

new products that are far more capable that its competitors. Another success factor of Google is

its strong corporate culture that has contributed to its early success. As a matter of fact, during

the technological boom, Google captured the opportunity to recruit smart and bright technologist

the made it eligible to focus on what they did best, i.e. to search. In fact, the know and skills of

such bright talent were difficult to copy. For instance, Google hired former Microsoft Vice

President and academic professor Kia-Fu Lee. However, the guru of the principles of

management Peter Drucker says “Knowledge workers believe they are paid to be effective"

(Drucker, 200). Considering this fact, the employees of Google are well paid. They were allowed

to spend most of their time, almost 70% of core business, 20% on products that complement core

business and remaining 10% on new projects (Terry, 2007). This particular rule is often referred

as 70/20/10, for instance, products like Google Finance, Gtalk, Google News, Orkut were

established that brought fruitful results.

Option 1 - Focusing on Google’s distinctive competence

Since its inception, Google has never diverted from its mission, which is to organize

world's information and to make it accessible and useful universally. Since, the IT industry is so

dynamic, it would be futile for Google as well as its competitors, including Microsoft and

Yahoo! to maintain status quo. Option one is to stay focused on its unique competency and to

continue to build one augmented solution. As a matter of fact, this particular option is consistent

with philosophy and corporate values of Google that is “it is best to done one thing really; really

well”and“Great isn‟t just enough. In this regarding, dedicating all the resources to develop a

search engine, Google can, by and large, enhance its search engine technology by listing more

relevant results. Subsequently, Google can leverage its focus to enticing users from its

competitors in order to increase its market share. It is pertinent to know that by improving search

engine technology, Google can also enhance its revenues. The more Google makes its users able

to search suitable content; a large pool of users will have the incentive to stay loyal to them.

With the influx of more users, better rates for click-through and more revenue from paid listings

could be materialized. In fact, more users will attract more advertisers and persistent

improvement in search engines to soak up market share, on both sides of the platform, should be

the prime strategy of Google to stay profitable over the long run.

As per the criteria laid down by Thomson Research, the prime aim to choose any search

engine is its relevancy of the searching results (Mandl, 2006). However, this research would help

Google to make a decision on developing greater search solutions. Besides good side of this

decision, there is a bad face too. The only disadvantage of this focused strategy is the external

forces in the environment. As of now, the search industry has been witnessed mushroomed

growth, but this trend could not continue forever. In fact, the use of the internet by novice users
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will ultimately step down and would cause such prolific growth of the industry downward and

flatten the revenues. However, this will create a brutal battle among the potential competitors.

All in all, Good would still have the superiority to differentiate its unique search engine

algorithms to entice broad customer base.

Option 2 - Branch out into new areas

The second option, for Google, is to expand into full portal similar to Yahoo! and

Microsoft‟s MSN. The prime advantage of this option is that it would allow Google to have good

reputation and a source of additional revenues. But the main focus of Google particularly

remains search engines; hence, it can apply its rule, i.e. 70/20/10, to develop portals and provide

a source of value added services to its existing users. However, this approach, the information

available on internet could well be organized into different channels based on their categories,

such as lifestyles, health, news, shopping, sports, etc. As a matter of fact, this option is also

consistent with Google‟s mission, subsequently users can drive greater value and Google can

maintain its corporate image.

Like option one, this option has some drawbacks took. First and foremost is the fact that

Google would not be able to compete with Yahoo! in building such dynamic web portal.

Because, Yahoo! has concentrated all its efforts towards the portal services and organized its

services in user-friendly ways. Over the time, Yahoo! has made a great investment and

positioned itself into portal services. Therefore, if Google chooses to compete with, it needs

much development in building effective portal capabilities. Additionally, Google also does not

have the adequate manpower to do so because only 10% of its engineers work towards the new

business segment.
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Option 3 – Developing products to compete with Microsoft

This particular option seems to be interesting as well as lucrative, for that Google already

develop applications such as Google Desktop, Google Docs, and Google Cloud to compete with

Microsoft. To enter into e-commerce business like an intermediary, such as that of eBay, seems

to have adequate growth opportunities for Google, because internet searching is the first step to

enter the e-commerce market. It is prudent to mention that many of the advertisers of Google

also eBay sellers. Additionally, Google already has an application, i.e. Google Checkout that

directly competes with eBay‟s PayPal service. This means that cost related to application

development and advertising would be minimal.

The only drawback associated with this particular option is that Google‟s incumbent

management would resist e-commerce platform. For instance, if Google acts as intermediary,

different departments have to work in cooperation and collaboration. This will further create

hurdle in the decision-making process and ultimately execution time.

Google’s distinctive governance structure, corporate culture, and organizational processes

as assets or liabilities

Without any doubt, Google's unique governance structure, and its bottom-up approach to

managing innovation are a great strength of the company. Over the time, the organization has

won several fierce battles of competition by dominating the market. Holistically, the corporate

governance, culture have, so far, remained successful in generating innovating and unique ideas.

In fact, Google‟s innovative corporate culture is greater for attracting and retaining bright talent.

The 70/20/10 rule of it allow each of the employees to use 20% of their work time on new

projects, which is good for developing innovative business ideas. If those ideas prove to be
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feasible, then the project materialized in letter and spirit. The only limitation in this regard is the

possibility of developing ego for getting great work done. The size of the organization could also

turn customers away. The prime task of leadership is to act proactively before the problem could

harm the organization, hence, as far as Google goes with its founders, the organization could

weather future storms.

Conclusion

In epitome, Google is one of the leading search engine and technology organizations of

the 21st century. In the swift course of time, Google has reached remarkable edifice of success by

competing with almost all of the players acting in the industry. The first option, i.e. sticking to its

core business is aligned with its vision and central strategy, where it can greatly excel. However,

the associated disadvantage is that external forces could affect its profitability. The second option

can also be streamlined with its central strategy and could bring a stream of additional revenues,

but again it has a drawback, i.e. competing with Yahoo! would be a hard nut to crack. Finally,

the third option can also reap fruitful results for Google without incurring much cost because it is

already into the particular segment, and the drawback of this option is the resistance of Google's

incumbent management.
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References

Drucker, P. F. (2007). Management challenges for the 21st century. Routledge.

Terry, C. (2007). Enabling staff to access the knowledge they need, when they need it. Industrial

and Commercial Training, 39(7), 368-371.

Vise, D. (2007). The google story. Strategic Direction, 23(10).

Edelman, B., Eisemann, T.R. (2011) Google Inc. Harvard Business School

Mandl, T. (2006, August). Implementation and evaluation of a quality-based search engine.

In Proceedings of the seventeenth conference on Hypertext and hypermedia (pp. 73-84).

ACM.