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Transcript of Google
Pasut William Rupen Humad
Lisi Wei - Willis Lissi Berksoy
Jaza Bhavani Xinze Yu - Rhea Introduction Background Information
Recommendation Background Information Market Share History & Brief Dates
Financial Performance History & Brief Dates Resources TANGIBLE ASSETS INTANGIBLE ASSETS HUMAN RESOURCE TANGIBLE ASSETS Assets increasing by more than 25% each year. Current Total Asset of 89.73 B.
259.26% higher than that of Technology sector
3572.04% higher than that of Internet Information Providers industry Need to handle
20 billion web pages a day
3 billion search queries
425 million Gmail users having 10 Gb of storage space
To Zip million of YouTube videos everyday Data Centres 417,600 - Douglas County, Georgia, USA204,160 - The Dalles, Oregon, USA
241,280 - Council Bluffs, Iowa, USA
139,200 - Lenoir, North Carolina, USA
250,560 - Moncks Corner, South Carolina, USA
296,960 - St. Ghislain, Belgium
116,000 - Hamina, Finland
125,280 - Mayes County, Oklahoma, USA
Sub-total: 1,791,040 servers
Future data centres that'll be operational by early 2013:
46,400 - Profile Park, Dublin, Ireland
200,000 - Jurong West, Singapore (projected estimate)
200,000 - Kowloon, Hong Kong (projected estimate)
139,200 additional - Mayes County, Oklahoma, USA
Grand total: 2,376,640 servers Land and Buildings Approximately 2.6 million square feet of land in administrative buildings
Seven acres of developable land to accommodate anticipated future growth INTANGIBLE ASSETS During 2010, they invested 1.8 billion dollars to acquire companies, services, technologies and products. Display advertising
USD $3,367 million primarily related to the acquisition of DoubleClick Online video hosting
USD 1.65 billion acquisition of YouTube in 2006.
Reached 5.9 billion views in dec,2008 alone serving 41% of all online video. Approximately 12% of their revenue is spent in Research and Development
USD 5.6 billion in 2011 Products like Yahoo! And Microsoft’s MSN Improving Search and Advertising: -To reach 10 million small and medium sized businesses in the US
-Businesses spent USD 22 billion on local advertising and USD 10 billion on yellow pages listings Communicative Applications Google argued “Competition is one click away”, noting that customers could switch to other search engines if they so chose. Vision:
Schmidt suggested that it will take, current estimate, 300 years to organize the entire world’s information.
-What should Google do next? Entering the traditional strongholds of e-commerce giants like e-bay and Amazon
Book search , maps and checkout by Google HUMAN RESOURCE Strive to hire the best employees, with backgrounds and perspectives as diverse as our global users. Mantra - every day at Google should be worth two days in another environment. At December 2010, 24,400 employees
40% Researchers All of Google’s employees are also equity holders. Stock-based compensation to be approximately $1.6 billion in 2011 and $1.9 billion in 2012. Rule of 70/20/10
70% of time was spent on the core business – web search and paid listings.
20% on business that extended the core and
10% on new businesses The ability to see under the oceans in Google Earth came out of this and so did the map of the entire surface of Mars. Capabilities Porter's Value Chain Model Primary Activities
Support Activities Primary Activities Inbound logistics - the mass of web pages and information on the entire Internet and how to collate that information. Outbound logistics - the results to searches posted on its web site. Marketing and sales
Reputation through top level services
2003 marketing strategy changed
The cost of marketing and sales jumped from $43.8m to $120.3m between 2002 and 2003
Rapidly increased up to $1.946bn in 2008 Services Support Activities Procurement: Information accessible on the entire Internet Human resource
management - HR functions and policies align with business model and vision makes Google the most exciting young technology company to work for.
- Healthy work-life balance is motivating people "I trust the people I work for, have pride in what I do, and enjoy the people I work with”. Trust is “written” on the psychological contract.
- Good employment relations, employee relations. - High Employee involvement.
"Thank God It's Friday." aka TGIF
- More likely engage in discretionary behavior.
- Positive Organizational citizenship behavior.
- High job satisfaction and commitment, even self-motivated.
Today Google has more than 70 offices in more than 40 countries around the globe. SWOT ANALYSIS Strengths Google’s search engine enjoys a formidable position
Google has the largest market share and tremendous reach. It is known to achieve better results for searches than other engines.
Google’s engine conducts more than 60% of all searches and 90% of all mobile searches. Android powered phones have a market share of 35%, and the growth of Android has outdone that of rivals. Increased proportion of revenues from Google Websites and lower traffic acquisition costs.
Google strategically focuses on enhancing the ad revenues from Google websites. The company has also been effectively reducing the traffic acquisition costs as a percentage of revenues Weaknesses Unfavorable revenue sharing in mobile apps
Android apps are currently in an area that is underperforming and lies far behind the market leader, Apple’s App Store. Opportunity Display advertising growth and mobile advertising to be strong drivers
The company has forayed into display and mobile advertising which will drive the incremental growth supporting its dominance in search advertising. A burgeoning mobile phone market provides excellent growth opportunities.
The global mobile phone market has experienced strong growth both in terms of value and volume and this trend is expected to continue.
Android is operating in something of a boom market, one which presents excellent growth opportunities for the foreseeable future. Threats The outcome of litigations could prove to be adverse
Google is currently in the middle of several lawsuits. The outcomes could restrict the operating flexibility for the company, impact the popularity of products Recommendation Improving search and advertising Branch into new areas Full portal Website Mobile industry Increase interoperability between Chrome OS and Android operating system “Chromebooks” Thank you Use of Resources/Capabilities to Gain Competitive Advantage Establishing CA Sustaining CA Appropriating the Return CA Profit-Earning Potential of a Resource/Capability Establishing Competitive Advantage Scarcity
Abundant resource/capability in the market
Not sufficient to win Relevance
Google resources are very relevant to the key success factors in the market Competitive Advantage Sustainability of Competitive Advantage Durability of the resource
Increasing pace of technology shortens life span of resources
Including capital equipment and proprietary technologies Determines ability to buy resources
- Geographic immobility – not an issue
- Imperfect Information – human resources; hiring
- Complementary – brand reputation of the product is associated with the company
- Organisational Capability – dependence of the teams of resources on a wider network of relationships and corporate culture Transferability Google builds its resources: imitation risk
Advantage of imitation for Google: replicated at disproportionate costs by imitators Replicability Appropriating the Return to Competitive Advantage Property Rights
Google Crome Browse History
Gmail Personalised Advertisement
Google E-Books – 45m$ to authors Division of return between the firm and its individual members
80% of shares owned by the trio Brin, Page and Schmidt Embeddedness:
The more deeply embedded individual skills and knowledge within organisational routines, the weaker is employee relative to the firm
In Google individual employee contribution to productivity is identifiable
Employee is mobile
Employee’s skills offer similar productivity to other firms
Therefore, employees have high bargaining power. -Founded by Larry Page and Sergey Brin in 1998
-Revenue 50,157 million in 2012 up from 37,905 million in 2011
-Early variants of search engine ranked results by search frequency, google ranked them by numbers of inbound references -Adopted new advertising listing system based on the ratio of actual click through rate to expected CTR. -First round funding from venture capitalists in 1999
-Initially specialised in supplying other existing search providers such as Yahoo! and AOL with search technologies. -Google Map was launched in 2005, in this year -2012 launched its first tablet computer, Nexus 7 -Google was solely search engine without advertisement - Google introduced first paid listing in 1999 -2009 Started to charge Checkout vendors -2010 Entering telephone business with Nexus -2011 Google took over the mobile phone unit of Motorola Financial Performance Gmail and Finance Include local search and vertical search -Competitors like Yahoo! mail and Hotmail offered - 2MB to 4MB Gmail! -Launched in 2004 and boasted of more than 1GB of storage space Operations
Core operation: Creates its algorithms that determine a web page's importance and how to best answer its users' queries Android’s success is a growth driver in the mobile market Dependence on mature search advertising while Facebook dominates the rising social media platform
The company has social networking sites such as Google+ and Orkut in its portfolio. However, these have not met the compelling success enjoyed by its peer Facebook. Competition from several sources
Google faces significant competition from Yahoo!, Apple, RIM, Microsoft, Facebook and eBay. Relative Bargaining power: 2.9 million square feet office building in New York -Launched personalised search and Gmail in 2004. -2006, launched Google Checkout, it was a direct competitor to eBay, as usual it was free of charge. In the same year in took over YouTube for $1.65 billion -2008 launched its own browser, Chrome
-Launched telecommunication technology Android in 2008 Google and its partner was able to earn 60% of U.S. paid-listing revenue Sustainable growth in search advertising
The company enjoys a clear dominance in the search advertising.
Despite slowing growth and maturity in the market, Google is well poised to benefit from the growth in the search advertising market.