Team 10 Tara Ferguson JT Lehotsky Taylor Skidmore Phuong To.

Team 10Tara Ferguson

JT LehotskyTaylor Skidmore

Phuong To

ORGANIZATIONOF GOOGLE

History of Google• Began March 1996 as a Stanford research project by

Larry Page and Sergey Brin.• PageRank: pages with the most links to them from

other relevant web pages must be the most important pages associated with the search.

• Formally incorporated as Google Inc., on September 4, 1998.

• In 2000, began selling advertising based on search keywords.

• By 2004 they made their first initial public stock offering.

Google’s Mission

• “Organize the world's information and make it universally accessible and useful.”– New approach to online search that quickly spread to

information seekers around the globe.– Google focuses on using its mission to connect it’s

users to their core business, the search engine. • Code of conduct--“Don’t be evil.” – “We believe strongly that in the long term, we will be

better served, as shareholders and in all other ways, by a company that does good thing for the world even if we forgo some short term gains.”

Google’s Core Business

• Advertising– Google receives demand for advertising mainly

from businesses that sell a large range of consumer products, and services.

– AdWords: Advertisers select their own target keywords and only pay when customers click on their ads.

– Google’s main revenue is generated by providing online advertising, at over $10 billion a year.

Google’s Core Business

• Search– Google’s main focus is developing the best search

engine possible. – Company developers provided the fastest, most

accurate results requiring a new kind of server setup.

– Google uses a system created by the company’s founders called PageRank, which is meant to help rank web pages that match a certain search query.

Environmental Factors

• Geography– Google’s main headquarters are located in Mountain

View, CA.– Competes internationally in Asia Pacific, the Middle

East, Latin America, Canada, and Europe.• Social– Most common age distribution 35-44: 22.93%– Affluent users– Important consumer of Google consists of their

business to business operations.

Technology• Stands out from competitors through processes

such as information technology, analytical decisions, and product development.

• Google rapidly comes up with new ideas to expand their offering mobile phones, social networks, operating systems, blogging, etc.

• Organization structure is suited to implementing an entire product-development life cycle quickly and efficiently.

• Google simultaneously tests and markets the products to the user community.

Political

• Copyright Accusations– Faced with an anti-monopoly inquiry from the

Department of Justice.– Scanning copyrighted books from libraries for use

in its book search service was a violation of copyrights.

Political

• Privacy Standards– Stop the merger of Google and the online

advertising firm, Doubleclick.– Interest groups filed a complaint with the FTC, and

they agreed to conduct an anti-trust review of the deal.

– Wanted more transparent information on how their personal information is collected and used.

Political

• Censorship Laws– Announced that they would follow internet

censorship laws in the People’s Republic of China.– Firewall allows for self-imposed censorship of

certain keywords that are on a blocked list maintained by the government.

– They feel providing some information is more consistent with their mission then providing none at all.

Political

• Google has a lot of influence on American politics. – They have a large control over the distribution of

information.– Google Public Policy. Includes their views on net

neutrality, censorship, innovation regulation, immigration, R&D, national security, and trade.

– Online video debates of presidential candidates.– NetPAC: supports candidates who promote an open

and free Internet for users.

Organizational Structure

Eric Schmidt, Chairman of the Board and Chief

Executive Officer

Larry Page, Co-Founder & President,

Products

Jonathan Rosenber, Senior Vice President, Product Management

Susan Wojcicki, Vice President, Product

Management

Sergey Brin, Co-Founder & President,

Technology

Alan Eustace, Senior Vice President,

Engineering & Research

Jeff Huber, Senior Vice President,

Engineering

W.M. Coughran, Senior Vice President,

Engineering

Patrick Pichette, Senior Vice President & Chief

Financial Officer

Omid Kordestani, Senior Advisor, Office of the CEO and Founders

Urs Holzle, Senior Vice President, Operations & Google

Fellow

Laszlo Bock, Vice President, People

Operations

Rachel Whetstone, Vice President, Public Policy and Communications

Shona L. Brown, Senior Vice President, Business Operations, Google Inc.

Nikesh Arora, President, Global Sales

Operations and Business Development

David C. Drummond, Senior Vice President,

Corporate Development and Chief Legal Officer

Google’s Organizational Chart

Organizational Structure Cont.

• Flat Structure– Has few levels of executives between employees

and management.– Allows for ease of communication with upper

management and quick decision making.– Important to the company to maintain the feel of a

small organization.– Committed to every employee, they each have

something important to contribute, and everyone that works there is valuable to their success.

ANALYSIS OFGOOGLE

SWOT Analysis of Google

Strengths Weaknesses

- PageRank system- AdWords- Cloud Computing

- No metadata to filter search results

- Privacy issues

Opportunities Threats

- Social network industry- Expanding services to Mac and

Linux

- Increasing competition leads to revenue decrease

- Intellectual property rights

Hedgehog Concept

What Google is deeply

passionate about

What drives Google's economic

engine

What Google can be best in the world at

4 Action Framework

Google's Current Value

Curve

REDUCE:- Employees- R&D Costs

CREATE:- Web browser

- Apps

RAISE:- New ad formats- Needs of users- Global access

- Search tools (Google.com)

ELIMINATE: - Pop-ups

- Payments for search results- Newspaper and radio ad units

Google’s Globalization Drivers

Google'sGlobalization

Potential

Market Drivers- Evolution of customer

needs- Global customers

Cost Drivers- Nature of industry- Economies of scale

- Differences in country costs

Competitive Drivers- Globalization of

competitors- Interdependence between countries

Government Drivers- Regulatory climate

- Technology- Standards

INDUSTRY ANDCOMPETITORS

YAHOO! INC

•1994, Jerry Yang and David Filo - Stanford University•making a guide on the campus trailer •“Jerry and David’s Guide to the World Wide Web” •“Yahoo!” = Is the acronym for “Yet Another Hierarchical Officious Oracle”

Way to the breakthrough

• 1996: 1st I.P.O. of $1billion• 1998-2008: acquired different companies and

services (Y!Mail, Y!Messenger, GeoCities, Flickr, del.icio.us…)

• Went into Asia• Never had a search engine until 2003

But failed in the end

• 2005-2008: several attempts from Microsoft • 2001-2008: 3 times CEO changed• Jul 2009: Microsoft $20billion for Y! search

engine (stock price $33 2008 to $15.4 2009)• Shifts to displaying ads and online services• Last 4 years: 92x decrease in operating

income, 4.5x decrease in total income,

Baidu Inc.•2000 a Chinese language Internet search provider

•Provides an index of over 740 million web pages, 80 million images, and 10 million multimedia files & 57 search and community services

•Inspired by a poem written more than 800 years ago during the Song Dynasty. The poem compares the search for a retreating beauty amid chaotic glamour with the search for one's dream while confronted by life's many obstacles

•The first Chinese company listed on the Basdaq list

•62.1 percents of Chinese market (Google - 29 percents)

•Last 4 years: 20x cash flow, 4x assets, 4x equity, 12x revenue, 40x operating income

AOL

•1995-1999: WebCrawler, NetFind, Netscape

•1999: AOL Search

•2001: merger with Time Warner

•2005: Google got 5% of stocks

•2006-2008: profits decrease (-$13 mil in 2008)

•2009: split

MSN & Bing•1998: MSN search

•2009: bing – disease in Chinese? very certain to respond? Or just bing!?

•Pay per click – on mobile phones

•10 years agreement with Yahoo! – 23% market share

•Decision engine instead of search engine/Innovation• Quicktabs• Interactive/smart (flight number, usb tracking number)• Photos and videos• Microsoft Advertising Intelligence (provides keyword expansion,

research, pricing, and KPI data allowing you to maximize marketing ROI for your paid search and content ad campaigns )

Online Advertising Industry:View from the top

• Highly competitive• High customers’ purchasing power• Hard to enter• Best defense: brand name power• Basic formula: when there is a high brand recognition,

there is a higher numbers of users and subscribers (and vice versa); and when there are both of the characteristics above for an online ad provider, there will be more customers and profits to the provider.

• Not so basic: innovation (Google and PageRank; bing and excitement)

• Think a new company can enter that industry?

FORMING A STRATEGY

Revised 4 Action Framework

Google's Current Value

Curve

REDUCE:- Search engine

- Advertising- Cookies on user's computers

CREATE:- Chrome OS

- Google Internet

RAISE:- Mobile devices and services

ELIMINATE: - Google Earth

Value Curve

Adverti

sing

Search

Engine

Cookies

Mobile

Servi

ces

Operating Sy

stem

Internet

Earth/Sa

tellite Sy

stem

Online Books

Downloadable maps

Google

Competitors

High

Low

Google Competitors Google

The Future is Here!

THE END!!!