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GOOGLE Strategic Analysis
Sandeep Dutta
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.
Google Strategy
• It’s the same as of Capgemini, IBM, HP, Microsoft etc….
• All these companies have major share in world products & services share of Engines and IT domain
• Google wants world wide web’s major share.
QUESTION?
• IS GOOGLE IN THE RIGHT INDUSTRY?
Let’s Analyze the Industry
The Industry Stats
Country Analysis
Country Users (Mn) Usage Growth (2006-2012)
US 210.00 120.80%
China 162.00 620.00%
Japan 86.30 83.30%
India 63.00 992.00%
Brazil 39.15 682.8%
World 1173.00 225.00%
QUESTION?
IS GOOGLE IN THE RIGHT BUSINESS?
Lets Look at Products and Rev Model.
Google Products (>60)
Standalone Applications
AdWords EditorGmail Notifier
Hello PackPhoto Screensaver
PicasaSecure Access
GTalkSketchUp
Desktop ExtensionBlogger Web Comments
Browser SyncDashboard Widgets
Send to PhoneToolbar
Communication & publishing
3D WarehouseBlogger
Calendar, Docs& Spreadsheets
DodgeballFeedBurner
Gmail, OrkutYouTubeReader
Mobile ProductsBlogger Mobile
CalendarGmailNews
iGoogleReader
Maps Mobile
Web SearchMaps
Ride FinderAnalyticsDirectory
Google MiniSMS
Search Mash
AdvertisingAdSenseAdWordsAudio Ads
Click-to-CallGrantsTV Ads
Core Products & Revenue Model
• Core Products – Search and Adwords.
• Revenue Sources -• Contextual Ads - Adsense.• Adwords.• Licensing Google search.
• Approx – 100 Billions Dollars.
Internet Advertising Trend and Predictions
Global - By Zenith Optimedia
Global Market Share in Search
Total search in year 2006 99.57 BnGoogle is doing 138.1 Mn search per day
QUESTION?
• WHAT MAKES GOOGLE?
ANDAR KI BAAT
Leadership• Dr. Eric Schmidt, • Chairman of the Board and Chief Executive Officer • Larry Page, Co-Founder & President, Products • Sergey Brin, Co-Founder & President, Technology
Philosophy of Google
• Focus on the user and all else will follow.• It's best to do one thing, and do it well.• Fast is better than slow.• Democracy on the web works.• You don't need to be at your desk to need an answer.• You can make money without doing evil.• There's always more information out there.• The need for information crosses all borders.• You can be serious without a suit.• Great just isn't good enough.
Google’s Culture• Heart of Small Company• Hand’s on contribution to the Products by each employee• Flat Hierarchy• Each employee having several responsibilities in different departments• Hiring Policy
– Non Discriminatory– Preference of ability over experience
• Multilingual company environment• Multidomestic culture• Recreation along with work• Common café for all employees
Google’s Global Presence
•21 countries at present
Uniqueness about GoogleSEARCH
• Speed, Accuracy, Objectivity and Ease of use of.• Fit between their technology and the consumer
behavior.• Page Rank technology – Orkut merged• Solved the scale up problem• Positioned as “Fastest Crawling Technique”• Keeps the search “Up to date”
Uniqueness about Google
• 1st to get it right advantage• Advertisers tie up as “CPC”• Trade off between “Speed” & “Compression”• Best asset utilization (Efficient storage space)• R&D expenditure = 50% Net Income(10% of
Revenue)
Continuous Innovation
Biz Model
• User Info• Social Networking• Page Rank• Relative Importance• Customization• Contextual Advertising
• competitive advantage comes from its core competencies in computer hardware and software engineering
Value Chain
Dynamic View
Resource Endowments
Resource Commitment
Activities
Buying many sites,Opening offices in many Countries, Huge investment in R&D, Continuous investment in increasing Database
Searching for various avenues, Continuous innovation, Developing people, learning new technologies
QUESTION?
• WHAT IS GOOGLE PITTED AGAINST?
THE BATTLE ZONE
Competitive Landscape
Search
Competitive Landscape
Advertising
Competitive Landscape
Video Blogging
Competitive Landscape
Social Networking
QUESTION?
• HOW WOULD GOOGLE CLASSIFY THESE PLAYERS AND WHO ARE THE TOP
COMPETITORS?
THE BATTLE ZONE – Part Deux
Direct Competitors OR Complementors?
• Internet companies,• web search providers,• Internet access providers, • Internet advertising companies
Indirect Competition Or Complementors?
• Competition from traditional media companies.
• Most large advertisers have set advertising budgets, a very small portion of which is allocated to Internet advertising.
Top Competitors
Google Identifies Top 2• Primary competitors - Microsoft and Yahoo! Inc.• Both Microsoft and Yahoo have more
employees than Google. – Microsoft 6 times.• Microsoft also has significantly more cash
resources.• Longer operating histories and more
established relationships with customers and end users.
• Microsoft and Yahoo also may have a greater ability to attract and retain users - because they operate Internet portals with a broad range of content products and services.
Strengths Analysis
Weaknesses Analysis
Threats Analysis
Common Opportunities• BRIC Countries•Computer literacy is on the rise•Telecommuting and at-home-businesses growth •Mobile technologies offer another opportunity.•Cheaper global telecommunication costs open new markets
Google Yahoo Microsoft
Traditional ad domain
Office SuitesOther Software Apps.
Pay Per Use office
Internet Ads
Competitor Analysis • Google – Aim – To make everything free for the Virtual User.
QUESTION?
• SO WHAT IS GOOGLE DOING AND WHAT SHOULD IT DO?
ACTION ITEMS
Inorganic Growth - List of Google acquisitions
2004 2005 2006 2007 2008
XunleiAdscape – Video Game advertising
TrendalyzerTonic Systems
MarratechGreenBorder
PanoramioFeedBurnerPeakStream
ZenterGrand Central –
VOIP
dMarc Broadcasting–
Radio Advertising
Measure MapUpstartle
@Last SoftwareOrion
Neven VisionJotSpot
YouTube- Video Sharing
Endoxon
2Web TechnologiesPhatbits
Urchin S/W Inc.Dodgeball
ReqwirelessCurrent Comm. Group
AndroidSkia
Akwan InfoTechAOL (5% stake) -
Internet
5 year Performance
5 year Performance
• R&D -> More than 10% increase Y/Y since 2002– Continuous Innovation, creating new products.– New products every year, Need Based Positioning,
Depth rather than Breadth.– Ready to deal with dramatic change.
• Cost of Revenue – around 40% increase Y/Y since 2003– Find new sources of Revenue, margins reducing.
Recommendations• Diversify earnings not products
Country Revenue %
US 61%
UK 14%
Rest Of World 25%
The Growth Share Matrix
Recommendation• Search : Competition from both big web companies and
well-funded startups will force Google to remain focused on continuing to innovate in search.
• Contextual Ads – Continue good work• Other Ad formats - With Google clearly intent on spreading
its advertising platform to the offline world, go for more acquisitions.
• Video – Continue Good work. Consolidate position.• Social Networking – Acquire other players.• Office Suite – Continuous R&D
Recommendations
• Be Multi-domestic company• Find new sources of revenue.• Continuous Innovation is the key to maintain
dominance in such an aggressive environment.
• Concentrate on BRIC nations.
Recommendations
• Balance Scorecard
Have we left any QUESTIONS unanswered?
“THE POWER OF GOOGLE IS ENPOWERMENT.”