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  • 1.2 Google Case Study

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    Larry Page and Sergey Brin met at Stanford University in 1995 and began collaborating on a search engine called BackRub, which they later renamed Google in 1997. They formed Google Inc. as a partnership in 1998 with $100,000 in funding and set up operations in a California garage. By 2004, Google had grown significantly with over 800 employees and offices worldwide. That year, Google became a public limited company by offering shares for sale on the stock exchange, raising its profile and increasing capital but also subjecting it to more regulations and potential loss of founder control.

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    Larry Page and Sergey Brin met at Stanford University in 1995 and began collaborating on a search engine called BackRub, which they later renamed Google in 1997. They formed Google Inc. as a partnership in 1998 with $100,000 in funding and set up operations in a California garage. By 2004, Google had grown significantly with over 800 employees and offices worldwide. That year, Google became a public limited company by offering shares for sale on the stock exchange, raising its profile and increasing capital but also subjecting it to more regulations and potential loss of founder control.

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    3K views2 pages

    1.2 Google Case Study

    Uploaded by

    Farrukhsg
    Larry Page and Sergey Brin met at Stanford University in 1995 and began collaborating on a search engine called BackRub, which they later renamed Google in 1997. They formed Google Inc. as a partnership in 1998 with $100,000 in funding and set up operations in a California garage. By 2004, Google had grown significantly with over 800 employees and offices worldwide. That year, Google became a public limited company by offering shares for sale on the stock exchange, raising its profile and increasing capital but also subjecting it to more regulations and potential loss of founder control.

    Copyright:

    © All Rights Reserved
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    of 2

    THE GOOGLE PHENOMENON

    In 1995, Larry Page and Sergey Brin met at Stanford


    University. The following year they formed a partnership
    and began collaborating on a search engine called
    BackRub. In 1997, they decided to rename BackRub and
    came up with Google (derived from googol, a
    mathematical term for the number represented by the
    numeral 1 followed by 100 zeros).

    With $100 000 support from a backer, Google Inc was set
    up 1998 in a garage in California. Later that year, PC
    Magazine recognized Googles search engine as one of the
    top 100 websites. In 2000, Google became available in
    many languages, including French, German, Italian and Chinese. By 2004, the Google
    search index contained 6 billion items, including 4.28 billion web pages and 880 million
    images. It moved to an office in California called Googleplex with over 800 employees and
    offices all over the world. In the same year, Google became a public limited company
    offering for sale 19 605 052 shares at an opening price of $85 a share.

    Over the next five years, Google refined and added to its search engines a range of products
    such as Google News, Google Earth, Google Maps and Google Video. Today, Google is a
    huge multinational corporation worth around $160 billion and its share price is over $500 a
    share.

    25 marks,
    1. Explain the term partnership
    Partnership profit seeking business that is owned by 2 or more persons. Partners
    pool funds to start the business silent partners
    (2 marks)
    2. Outline two benefits to Larry Page and Sergey Brin of Starting Google as a
    partnership.
    Benefits Financial strength
    - Division of labour / specialization
    - Increased client base
    - No published financial records

    (4 marks)

    3. Examine the difficulties the partners would have encountered when they set up
    Google.
    Problems with setting up the private company
    - Capital expansion
    - Cash flow financial restraints
    - Unestablished customer base
    - High cost of setting up the company

    Loss of control trust Board of Direcctors

    4. Explain the term public limited company (plc).


    PLC Sell shares to the general public stock exchange

    (8 marks)

    (2 marks)

    5. Discuss the advantages and disadvantages to Google following its conversion to a plc
    in 2004.
    Advantages Increased capital
    Economies of Scale
    Directors (specialization)
    Continuity
    Disadvantages
    Dilution of control
    Publication of financial records
    Regulations
    Target for takeover
    (9 marks)

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