About Google

Began as a research project by Larry Page & Sergey Brinn who were PhD. Students at Stanford University in California. It was originally nicknamed as BackRub as it checked back links to estimate the importance of a site.

It was then finally changed to GOOGLE which originated from a misspelling of the word GOOGOL( no. 1 followed by 100 zeros)
Was 1st incorporated as a privately held company on sep4,1998. Its 1st initial public offer was made on august 19,2004.

The Vision
To make search engines so powerful they would understand "everything in the world".

The Mission
To organize the world's information and make it universally accessible and useful.

The Focus
Google continues to focus on innovation and on the user experience.

Case Summary
Need of a search engine that would provide with the most useful link for a particular search. Goal to have a search engine that would return a list of WebPages with the most useful appearing at the top. Started raising money for their new company from family , friends & angel investors. By Sept.1998 - they had raised enough money to capitalize their company. Dec.1998 - Beta version of Google was ready & ran successfully , answering about 10,000 search queries a day. Dec.2000 - Google s index included more than 1.3 bn WebPages.

Case Summary

2004 - WebPages increased to 4 bn. & it was handling about 300 million queries per day.
Unlike other dot com businesses , Google had found a way to make money.

In 2003 - company made a $967 mn. Revenues and $105 mn in net profit. The growth was exponential , by 2004 it surged to $1.35 bn and net income to $143 mn

Key Issues
Yahoo! & AOL Time Warner used Googles technology .(Googles tech quickly became pervasive & in 2003 75% of internet searches were made using Google)

Business Model
It sold to advertisers the words that people enter when they search for something on the Web.
It distinguishes b/w independent search results & those that are paid for by listing Sponsored Links on the right side of the page.

Use of an automated bidding process known as Vickery second price auction.

Question
What is the value that Google creates for customers & advertisers? How does this value translate into higher revenues & profits?

Value Chain

Value to Customers & advertisers

By providing relevant websites promptly By providing excellent links in the first few results Increased traffic AD Sense translates into increased sales & bottom line

Question
What are the sources of Googles competitive advantage? How secure are these advantages from imitation by competitors? What must Google do to keep the competitors at bay?

Continuous Innovation

Question
Do competitors such as Yahoo! & Microsoft potentially have assets & capabilities that give them an advantage over Google in the search engine business?

SWOT Analysis

Strengths
Google Most efficient & largest search engine in the world Yahoo International business presence Microsoft Worlds largest software company with global name recognition and strong One of the top brand & the largest technology overall in market value A 30 year industry leader (A strong background in solid software design Posting consistently strong earnings)

No.1 online advertising company

Very well known brand

Good capability in Powerful marketing supplier buyer integration company

Weakness
Google Over dependence on contextual and other internet advertising for revenue Focused solely on advertising as monetization model Lawsuits regarding improper use of company names in search terms A possibility of focusing on technology innovation instead of value innovation Yahoo Differentiation about products is difficult for Yahoo!..search, email, news, shopping Microsoft Dependency on hardware manufactures and over dependence on Microsoft Office Application Not a leader in online advertising

Existing online advertising efforts have either failed or not paid off A focus on software over the online market

Opportunities
Google Yahoo Microsoft

Traditional Ad domain office suites

Quickly becoming the online advertising company of choice even overseas

Other software applications

BRIC countries

Pay per use office internet ads

Gaining in-roads into online advertising

A strong ability to gain more customers by offering free products

Development of Yahoo directory

Threat
Google Yahoo Microsoft Piracy, legal battles, competitors

Foreign market Competitors move such competitors that are as MSN, GOOGLE, etc.. already established such as Chinas Baidu.com (Advertisers can take their money elsewhere very quickly if a strong competitor emerges)

Porters Five Forces

Supplier bargaining Power

Supplier concentration is low Switching cost is low Threat of forward integration is low Importance of volume to suppliers is high

Entry barrier
Entry barriers due to brand identity & scales is high

Substitution Threat
Mobile search but due to less sophisticated technology threat is far away few years Switching cost is Low

Rivalry Factors
Few players of relatively smaller size industry is growing at rapid pace Product differentiation is low Switching cost is low as low as zero Exit barrier is low Informational complexity due to secrecy of internal algorithms

Buyers bargaining Power

Buyer size/ volume is very small Change cost/ frequency is low Product/ service importance is very high Ability to backward integrate is very less Price sensitivity is high Product differentiation is low

Have we left any questions unanswered???

THANK YOU CREDITS:-

GROUP NO-6

GOHAN KUMAR PALLAVI HARCHANDANI REUBEN KHANNA RISHIKA BERRY