Google Pstn Final

8/2/2019 Google Pstn Final

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About Google

Began as a research project by Larry Page & Sergey Brinn who werePhD. Students at Stanford University in California.

It was originally nicknamed as BackRub as it checked back links toestimate the importance of a site.

It was then finally changed to GOOGLE which originated from amisspelling 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.


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The VisionTo make search engines so powerful they wouldunderstand "everything in the world".

The MissionTo organize the world's information and make ituniversally accessible and useful.

The Focus

Google continues to focus on innovation and on theuser experience.


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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.


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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 netprofit.

The growth was exponential , by 2004 it surged to $1.35 bn and netincome to $143 mn


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Key Issues

Yahoo! & AOL Time Warner used Googles

technology .(Googles tech quickly became

pervasive & in 2003 75% of internet searches

were made using Google)


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Business Model

It sold to advertisers the words that people enterwhen they search for something on the Web.

It distinguishes b/w independent search results &those that are paid for by listing SponsoredLinks on the right side of the page.

Use of an automated bidding process known asVickery second price auction.


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Question

What is the value that Google creates for

customers & advertisers? How does this value

translate into higher revenues & profits?


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Value Chain


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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


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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?


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Continuous Innovation


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Question

Do competitors such as Yahoo! & Microsoft

potentially have assets & capabilities that give

them an advantage over Google in the search

engine business?


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SWOT Analysis


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Google Yahoo Microsoft

Most efficient & largest

search engine in the

world

International business

presence

Worlds largest software

company with global

name recognition and

strong

No.1 online advertising

company

Very well known brand One of the top brand &

the largest technology

overall in market value

Good capability insupplier buyer integration

Powerful marketingcompany

A 30 year industry leader(A strong background in

solid software design

Posting consistently

strong earnings)

Strengths


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Over dependence on

contextual and other

internet advertising for

revenue

Differentiation about

products is difficult for

Yahoo!..search, email,

news, shopping

Dependency on hardware

manufactures and over

dependence on Microsoft

Office Application

Focused solely on

advertising asmonetization model

Not a leader in online

advertising

Lawsuits regarding

improper use of company

names in search terms

Existing online advertising

efforts have either failed

or not paid off

A possibility of focusing

on technology innovation

instead of value

innovation

A focus on software over

the online market

Weakness


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Traditional Ad domain

office suites

Other software

applications

Pay per use office

internet ads

Quickly becoming the

online advertisingcompany of choice even

overseas

BRIC countries Gaining in-roads into

online advertising

A strong ability to gainmore customers by

offering free products

Development of Yahoodirectory

Opportunities


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Foreign market

competitors that are

already established such

as Chinas Baidu.com(Advertisers can take their

money elsewhere very

quickly if a strong

competitor emerges)

Competitors move such

as MSN, GOOGLE, etc..

Piracy, legal battles,

competitors

Threat


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Porters Five Forces


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Supplier bargaining Power

Supplier concentration is low

Switching cost is low

Threat of forward integration is low Importance of volume to suppliers is high


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Entry barrier

Entry barriers due to brand identity & scales is

high


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Substitution Threat

Mobile search but due to less sophisticated

technology threat is far away few years

Switching cost is Low


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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 ofinternal algorithms


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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


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Have we left any questionsunanswered???


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THANK YOU

GROUP NO-6

CREDITS:-

GOHAN KUMAR

PALLAVI HARCHANDANI

REUBEN KHANNA

RISHIKA BERRY

Google Pstn Final

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