Strategies and Policies
Case Study 8
Internet Search and the Growth of Google
In 1997 the domain name google.com was registered by two Stanford students name Sergey Bring and Larry Page. In 1998, it became a privately owned, incorporated company known as Google Inc. Within 6 years of its inception, Google acquired 75% of US web search market. Even the word “google”, became a verb in our society as one would say, “let’s google him!”.
Google revolutionized the internet search industry by charging its advertisers differently that ever done before. First, they auctioned off certain “key words” and when such key words were typed in a query, web users were directed to those advertisers web page. In addition, advertisers were charged on a “per click” based upon how many users actually clicked on their page.
By 2010, 70% of all internet advertising was being spent at Google. That same year, Google had $29.8 Billion in revenues with $8.5 billion in net profit.
Google’s mission is to organize the world’s information and make it universally accessible and useful. The Google we know organizes the world’s internet information and makes it accessible to us via its search engines using algorithms and state of the art technology.
Even though Google currently at the top of their field currently, they still have competitors. Their business model must be changed continually to stay abreast of new ideas, new technology, and new competitors.
Strengths
Most efficient search engine on internet
Brand equity – most recognized brand name
Needs very little end user marketing
Very strong R and D skills
Provides an interface to approximately 88 languages
State of art technology
Not biased towards advertisers
Ability to manage strategic change
Executive Management
Large cash flow
Default search engine for many
Innovative culture
Comprehensive product mix
Weaknesses
Business model is complex
Eccentric practices confuse/anger investors