Google Inc.

Group-4
Anish Khandelwal
Manpreet Singh
Puroo Soni
Sanjit Sahoo
Sujit Kumar

Key factors behind Googles early success?

Technology
Better algorithm (PageRank algorithm) yielding decreased spam & more relevant search results in lesser time
Initial sole focus on algorithmic search
Continuous fine tuning & improvement of search algorithms

Unique & strong corporate values

Dont be evil
Technology matters
We make our own rules

Higher benefits than competitors

Advertisers got access to more search traffic
Modified Overtures CPC model i.e. CTR model
Lesser cost as compared to that of competitors i.e. lower minimum CPC bids of 1, compared to Overtures
5

Unconventional innovation management

Encouraging engineers to spend 20% of their working time on own projects
Small teams working on hundreds of projects at one time
Googles keenness to invest in long shots, encouraging for the engineers

Industry

Search Engine Business

Threat of
Substitutes [Low]
No great substitute
except social media
sites like facebook
(enhancing that
business only)

Threat of New
entrants [Low]
Very difficult for new
entrant to gain market
share

Buyer Power [Low]

Limited to traffic as
more
confirms to more
traffic , search is free
for buyer

Rivalry [High]
Yahoo, Google and
Microsoft are
constantly fighting to
each other

Suppliers
Power[Low]
Networking
equipment options are
numerous

Attractive
Market

Branch out into new arenas?

Remember
Googles mission:
To organize the
worlds
information!
1. Build a full-fledged portal like Yahoo!s

2. Target Microsofts desktop software

hegemony

3. Become an e-commerce intermediary like eBay

Unique
governance
structure &
innovation
management:
Asset or Liability?

Whatever new arena Google decides to branch

out into must be consistent with its mission
and compatible with its current governance
structure and bottom-up approach to
managing innovation.

Winner-Take-All (WTA) in Networked Markets

Factors influencing
Platform structure

Advertisers

Web Searchers

Natural monopoly ie
minimum efficient scale in
excess of mature market size

Rare many competitors

were present for advertising

Rare As continuous
updating of content was
necessary

Multi-Homing costs are high

for at least one user side
Most users on a given side
will affiliate with more than
one platform

Low
The existing model was cost
per click, the cost difference
is not very high

Low
There were various options
for web searchers to use
multiple platforms

Strength of network effects

It is positive and strong for
users with high multi-homing
cost

Negative : More Advertisers

would bring negative same
side effects as well as cross
side effects.

Positive : More web

searchers would bring
positive same side effects as
well as positive cross side
effects

Neither sides users have a

strong preference for special
features

No
Advertisers prefer better
search algorithm which
display ads according to
need

No
Web searchers did not have
strong preference for special
features , Only they need
better search result

Winner-Take-All Dynamics
Conditions

Full Fledged Portal

Desktop Software

E-commerce
Intermediary

Multi-homing Costs
(High for at least one
user-side)

Low

High

Low

Network Effects
(+ve and strong at
least for the users on
the side of the work
with high multihoming costs)

+ve

+ve

High

Neither side users

have strong
preference for
special features

Have Preference

No Preference

No Preference

Winning Capability
(Pre-existing
relationship,
Reputation for
prowess, Deep
pockets)

No

No

Yes

Desktop Software

Full Fledged Portal

May digress from core

function
Yahoo is a strong
competitor with a
preexisting relationship
with the users
Yahoo has an ecosystem
of portals e.g. HotJobs &
2nd largest dating site
Google may experience a
higher resistance to
change as Yahoo & MSN
are already accepted
portals

Google will face a strong

resistance from MS and will
have to build an ecosystem
of softwares
Presence of strong
competition from Linux &
other open sources, gaining
market share
Google might face user
resistance due to switching
difficulties

E commerce
intermediary
Not at all in line with
their mission of making
available information;
neither there is much
innovation possible
from Googles
perspective
Currently, no expertise
in customer relationship
management and actual
operations handling

Verdict:
Google should continue to strive in its mission of making the world of
information available to the mass as Schmidt had said that it would take
300 years to organize all the information.
Considering that it already has the competency of building cloud based
solutions, it should leverage the same in order to compete with the
desktop tools of Microsoft.