Google, Inc.

Competitive Analysis: Four Corners

Googles Mission*
Googles mission is to organize the worlds information and make it
universally accessible and useful.

* Note: All Google company quotes and references cited in this presentation are attributed to a Harvard Business Review case study entitled,
Google Inc. Authored by Benjamin Edelman and Thomas Eisenmann. Published in 2011. Case Study # 910036-PDF-ENG.

Google: an American Institution

Google as a web search program:
In 1998, Stanford graduate students Sergey Brin and Larry Page created Google while addressing another ranking
systems problem. Once they started, they quickly developed a PageRank algorithm which favored pages that
were referenced (linked to) by other pages. Shortly thereafter, in 1999, announced Googles first-round funding.
In December 1999, Google introduced its first paid listings. Google sold paid listings on cost-per-impression basis, or
a fixed amount paid the advertiser each time a user viewed an ad.

March 2001, Eric Schmidt joined as CEO (formerly CTO of Sun Microsystems & CEO of Novell). Brin and Page were
titled Pres of Techn and Pres of Products, respectfully.
In 2000, Google indexed 1 Billion web pages, surpassing all rivals.
By 2001, Google.com was 9th largest US website with 24.5M unique visits.
In August 2005, Google went public. Its IPO was valued at $85/share
Within less than ten years, Google's stock reached $600/share giving it a $189B market share.

Google as an Organization
Googles IPO prospect document set a valuation that outlined a dual-class equity, giving 10 votes
per share to holders of Class B stock vs 1 vote per Class A share.
If Brin, Page, and Schmidt held onto their Class B shares, these 3 top executives would own of
the shares, but control over 80% of the votes.
Experts argued that the dual-class equity structure encouraged strategic risk-taking, but many
thought it diluted shareholders influence over the companys direction.
Googles management-style held matters close to the chest.
In a letter penned before the IPO, Page wrote, As a public company, we will of course provide you with all
information required by law, and we will also do our best to explain our actions. But we will not unnecessarily
disclose all of our strengths, strategies and intentions.

Googles Philosophy
Early in Googles history, the founders outlined a set of strong and distinctive corporate values
through a company manifesto called Googles statement of philosophy.
It cited corporate values as follows:
(1) dont be evil (refusal to compromise the integrity of search results)
(2) technology matters (Google invested heavily in the infrastructure to provide lightning fast
returns on search queries)

(3) we make our own rules (Googles founders had a knack for unconventional management
practices that is still admired today)

Company History

Since 2004, Google offered several services beyond web search including: Gmail, Google Maps,
Google Books, Google Finance, Google Docs, Google Calendar, and Google Checkout.
Gmail & Google Finance competed with Yahoo and MSN.
Books Search, maps, checkout competed with traditional e-commerce leaders like eBay and
Amazon.
Google ad-supported software competed against MS Office and MS Window's offerings.

Googles Market Share Growth

Mid-2001- Google was 9th largest US website with 24.5M unique monthly visitors.

Late 2003- Average CPC ($0.40) Overture and ($0.30) Google

2004- Google (appx 35%) surpassed Yahoo (appx 32%)

2007- Google had 58.4%

Nov 2009- Google had 65.6%

(Yahoo decreased to 17.5%)

Drivers

Current Strategies

Google
Management
Assumptions

Capabilities

Drivers
To improve search methods and monetization of advertising online:
Reasons for Googles superior performance:
1) Google improved on Overtures (the industry leader) policy of ranking paid listings solely according to CPC bids;
Google also considered listing relevance.
2) Googles paid-listings network had attracted two to three times as many advertisers as Overtures. Advertisers
were drawn to Google because its network offered more search traffic and allowed lower minimum CPC bids (1
versus Overtures 5).

3) Google ability to move, to innovate from within, and to acquire new technologies/ companies when needed. In
2007, Google acquired DoubleClick for $3.1 billion increasing its strength in placing banner advertisements. Then
in Sept 2009, Google showcased AdExchange to expand its role in placing display ads.

Managerial Assumptions
About itself:
Googles Philosophy outlined ten items it knew to be true. These statements keyed in on some managerial
assumptions:
Focus on the user and all else will follow. Google knows if the user searched a keyword and received (highly)
relevant result then the user will likely continue to rely on Google web search.
Its best to do one thing really, really well. Google believed in hiring only best talent, period; and also relentlessly
improving its web search capabilities. Getting the most out of knowledge workers will be the key to business
success for the next quarter century.
You can make money without doing evil. Google views that the act of serving the needs its user in an altruistic
fashion (find best, most relevant data to their web searches) increases the likelihood of visitors returning to its
search engine.
About its rivals:
Rivals will continue to expand into areas of web services like content hosting, voice and chat communications,
productivity apps, personal money management and checkout services.
Better opportunities of growth are improving in the cloud-based application, but privacy concerns continue to grow.
Even though the closest rival holds some 60% less in market shares, antitrust and monopoly complaints are a
leading concern and threat for Google.

Current Strategies
1. Basis for Competitive advantage: Broad offering of web product/ services and differentiation.
Google looks to be a dominant leader in every web service market in which it can compete.
2. Scope: planned and well-executed diversified products/ services across all web services,
geosocial location, and mobile-enabled technologies and world markets.
3. Posture: Growth has been exponential over the last decade. Short of staving-off an antitrust
lawsuit, Google remains dominant as a web search engine and in its web services. Internationally,
Google will have to work with foreign countries and concerns of US cultural imperialism. .
4. Recent Actions: Entered into B2C mobile phone markets, and continues to gain ground against
Amazon with Google Books, a book/literature content aggregate.

Capabilities
Resources:

Distinctive Competencies:

Outstanding reputation

First to Innovation, and/or first to adopt

Exponential growth over last decade, deep pockets

for continued research and development

Top advertising and monetization model

A top web search engine, Google name synonymous

with web search. Just google it.

GIS and geosocial location leader

Top company culture that attracts best-in-field talent

Competencies:
Web-based integration & optimization expertise
Collaboration and mobile-enabled web service
products
Products integrate into everyday life of users

Limitations:

Barrage of copyright/ trademark infringement

lawsuits, and privacy liabilities threatening business
model with accommodations to new laws
Improper CPC or ad view charges, advertisers say
clicks didnt occur at all or lacked appropriate

user interest.Focus of antitrust concerns from US and

sector dominance issues from abroad

CIP
Invest in mobile-enabled devices along with reframing various web service products to be compatible
with mobile phones, tablets, etc.

Expand into next generation technologies including other telecommunications and/or telematics
platforms.
Develop and to showcase expertise in managing high volumes of marketing and demographical data.
Extrapolate techniques into other industries where data mining has not been developed, ie
government sector
Plan for business model contingencies in anticipation of public policy or legislation changes/ issues will
probably arise from both domestic or international groups

Google is a business.
The revenue we generate is derived from offering search technology to companies and
from the sale of advertising displayed on our site and on other sites across the web.*

* Note: All Google company quotes and references cited in this presentation are attributed to a Harvard Business Review case study entitled,
Google Inc. Authored by Benjamin Edelman and Thomas Eisenmann. Published in 2011. Case Study # 910036-PDF-ENG.