Vibhor Mathur

5558912041
ISE – 545
Case Study 1 Report

Introduction

As a result of a research project of two Stanford PhD students named Sergey Brin and Larry

page Google came into existence. In 1997 they registered the domain name google.com and in

1998, it became a privately owned incorporate Google Inc. Google as we know organizes

world’s information and makes it accessible to us by help of search algorithms and use of state

of the art technology. Google is a brand name in internet search engines market. Within 6 years

of its inception, Google acquired 75% of US web search market. Although Google is a ruling firm

in its realm but still it has to compete with its rivals in this field where there is no long time

entry barrier. No one company can stay on a single business plan and be successful, Google will

have to change its strategies/business model to survive in this best search engine race.In order

to expand/change its strategies or business model, the most important step is SWOT analysis. It

will help Google to find its:

 Strengths: The helpful attributes of company to achieve the goal

 Weaknesses: The harmful attribute of company which can restrict them to achieve goal

 Opportunities: External factors which will help them to achieve the goal

 Threats: External Factors which will restrict them to achieve goal

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 Vibhor Mathur
5558912041
ISE – 545
Case Study 1 Report

SWOT Analysis

Strengths:

Google runs because of its brand name and is already a number one search engine in world. It

requires very slight end user marketing as most of the marketing of the company is because of

word by mouth publicity. Its search related advertising is growing at staggering 41% per year.

Users of Google trust the company because it is steady, reliable and fast. Google’s main source

of income is through advertisements, which they do very efficiently. Google has almost twice as

many search ad clickthroughs as runner-up Yahoo. In December 2009, Google had 16.5 trillion

ad clickthrough, compared with Yahoo's 9 trillion, according to Nielsen/NetRatings.Google is

not biased towards advertisers, it clearly separates relevant advertisements and actual results

by giving “Sponsored Links” tag to sponsored results when user searches to get information

with some keyword. Moreover, it also ranks sponsored links to keep most relevant sponsored

links on the top.With the introduction of Google Latitude, company will now advertise relevant

ads based on your location. Google has all kind of information about you from your shopping

preference to your search interest. One of the best things with Google is that it directs user to

search page very quickly without lingering in ads. One of the major strengths of Google is that it

uses low cost web server that is UNIX which certainly saves them lot of money. Multilingual (88

languages) interface of Google makes it easy for multicultural users for comfortable

searching.The basic approach of Google keeps them at the top, they did not complex their

search engine by making it a portal like Yahoo and MSN. Navigation through various innovative

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 Vibhor Mathur
5558912041
ISE – 545
Case Study 1 Report

services like Images, Groups, Directory, and News is very smooth. Now with wireless devices

and Gtalk, Google is entering into a new industry which has lot of opportunities.

Weaknesses:

Some of the strengths of Google are seen as their weakness by analysts. They are too much

dependent on search based advertising, 99 percent of revenue is generated from search-

related advertisements and rest 1 percent comes from sales of its enterprise search appliances.

This is not only considered to be threat but also the point of consideration for the company

because there is a lack of focus, they have narrowed down the revenue source while

broadening the services. Google is obstructed by its own success: According to Allen Weiner, an

analyst at Gartner, “Whether they like it or not, they are a media company, what they provide

is very valuable aspects of media, all wrapped up in search. But they're missing the internal

talent and internal capability to think like a media company. Everything is from a technology

perspective, and that is a real shortcoming." Google.com and mass market portals derive

Google’s revenue, which make its business model quite complex. Company’s Cost per Click

advertising charge method and ranking policy makes it confusing for most of the marketers to

foresee where their ads will be displayed and how much will they cost. Spammers, to increase

their rankings, create dummy sites with thousands of links. This increases problem for user as

they cannot see their favorite result at very top. Google does not have that “sticky” feature as

Yahoo and MSN have to attract users. Contextual advertising method of Google was supposed

to be less effective in generating sales because visitors to web pages showing editorial content

were less likely than searchers to be ready to buy. Also they were not 100% impeccable and

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 Vibhor Mathur
5558912041
ISE – 545
Case Study 1 Report

make mistakes many times during searches. Although Google is a controllingcompetitor among

search engine websites, only 50% to 65% of web search queries are answered accurately by it.

Opportunities:

Google’s acquisition of radio advertising company “dMarc” provides an automated system for

companies to advertise on radio. This feature has added an innovative feature into their

advertising strategy. By tracking user’s search histories with their consent company can

increase the switching costs and shoot them emails withrelated search updates as per their

personal interest. Enhancing their website by adding more stickiness features such as chat

rooms and email access on their website will give competition to Yahoo and MSN. Though this

is very controversial topic as Google, since the beginning, believes in basics. But as we

described no company can withstand for long with same business model. There is a lot of scope

in new businesses such as multimedia, product search, private database, and print media. If

Google can leverage its resources to provide these features to customer then it will surely

increase its traffic. Acquisitions have always been beneficial for Google, by merging with an

established mass-market portal they can lock in large number of users and advertisers. Now

since Google is also in hand held devices, so they can start providing full-fledged services to

capture market beyond conventional internet.

Threats:

One of the most recent controversies with Google about censorship in China is the major threat

for the company; the forced censorship will render many services to be less effective. Apart

from this the company’s dependence on AOL and other portals is also a major concern. If they

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 Vibhor Mathur
5558912041
ISE – 545
Case Study 1 Report

terminate the contracts, Google’s revenue will decrease comprehensively. Competition is also

one of the alarming concerns for Google; many companies can emerge in coming years with

similar services, better interface and names and can catch up Google’s market. It’s high time for

Google to change its business model.Portals like Yahoo provide more services and solutions

with conventional search than Google do. Google would start losing its users due to added

attractions in such portals. If we take a close look at future planning of Google’s competitor

then MSN is coming up with its new operating system called “Longhorn” with “implicit query”

feature. (This solves the main issue faced by Google). Longhorn have the feature to search web,

blogs, news sources, hard drive files, email plus attachments all from akeyword search without

a browser. Users will be able to search directly from already established Microsoft programs

like MS word. This would restrain users and ultimately it would harm Google’s market.

Overture has been Google’s longstanding competitor. Although Google has more advertisers

than Overture, their market revenue is 20% less than that of Overture. This opens the gate to

collaborate with well-known mass-market portals like AOL, Yahoo and MSN.Google is getting

trapped in the issue of privacy as it is making searches more and more personalized. This is

harming their business model and drawing attention of government to take necessary steps

against the company.

Recommendations

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 Vibhor Mathur
5558912041
ISE – 545
Case Study 1 Report

Google has most of the information about the user so they should now start integrating that

information to provide much better solution to user. Such as using combined information of

Google Latitude, Google searches, calendar appointments, preference of purchases and

conversation in Gmail and Gtalk along with your location – they can easily offer you e-coupons

and deals and other services nearby. They can also integrate all these features in their phone to

make it as your best friend which guides you throughout the day.

Google should provide more accurate, relevant and dependable search results which are most

important thing as far as the user’s objectives and company’s core competencies are

concerned. Google should come up with completely new avatar to provide print, multimedia,

travel, mail, Instant Messaging etc. as their portal by not harming its simple and basic interface.

Company has already started Geo-location feature to provide you with specific and targeted

ads, they can leverage on it by increasing ad pricing as it is highly specific and there is more

probability that a viewer turns into a customer. Feedbacks are considered to be your success

measure; rather sticking to a single price quote for advertisers they should change its charging

and ranking policies according to the feedbacks from advertisers. As other firms are also

growing big with time, their database system also overflows, Google can start service where

they can provide a small internal database search engine for these companies.

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 Vibhor Mathur
5558912041
ISE – 545
Case Study 1 Report

Conclusion

Google’s cutting edge technology and brilliant minds is the main reason behind company’s

independent and staggering growth. Now since according to time they should also change their

business model and practices, they should keep in mind the basic and fundamental approach of

business. It is high time for them to closely watch their rivals and think ahead of time. As far as

profit is concerned, securing in maximum market from quality services would automatically

help Google in attracting more number of advertisers to make revenue from.

Thus, Google should keep updating its technology and services with the same simplicity and

comprehensiveness as it has been providing since its establishment.