Presented by Team 8

The Back Corner

Thursday, January 21, 2016

Case 9:

Robert Wise, Thao Bui, Tung Lu, Huynh Vo, Shirley Kaeratana
Robert Wise
Agenda

Component Speaker # Name Minutes Total Time

Agenda handout 1 Robert Wise 1 1
Company Background 2 Shirley Kaeratana 2 3
Current News 3 Thao Bui 2 5
Financial Statement 4 Tung Lu 2 7
SWOT Analysis 4 Tung Lu 4 11
Case Questions:
Question 1 2 Shirley Kaeratana 2.5 13.5
Question 2 1 Robert Wise 2.5 16
Question 4 3 Thao Bui 2.5 18.5
Question 5 5 Huynh Vo 2.5 21
Question 6 1 Robert Wise 2.5 23.5
Recommendations / Summary 1 Robert Wise 1 24.5
Quiz / Q&A Robert Wise 5.5 30

Speaker 1: Robert Wise

Company Background

Founded by Larry Page and Sergey Brin in 1996

Corporate Office: Mountain View, CA
Search engine was first named “BackRub”
Specializes in cloud computing, software and online advertising
technologies
AdWords contributes to most of Google’s profits
Motto: “Don’t Be Evil”

Speaker 2: Shirley Kaeratana

 Current News

US Marines don’t want Google’s Robot Dog A long time ago in a galaxy far far away

Speaker 3: Thao Bui

Financials: Google Stock

Source: Google Finance

Speaker 4: Tung Lu
Financial Facts

• Revenue of 18.7 billion in 2015

(Microsoft 78 Billion, Apple 231 Billion, Facebook 12.5 Billion)
• Google revenue 90 percent comes from advertising, and the rest
comes from Google own website
• Net income of 14.4 billion in 2015

Speaker 4: Tung Lu
Financials: Google Versus Competitors

Source: Geekwire.com
Speaker 4: Tung Lu
Financials: Google Cash and Short Term Investments

Source: QuartzLaz.com
Speaker 4: Tung Lu
Strengths

• Market leaders in search engine: Google has been the

biggest Internet search worldwide
• Open source products and services: Google products
can be used with any OS or mobile devices without
any charge including Google maps, calendar, and
drive.
• Quality and customer experience: Google’s objects
are to offer premium products, and solve customer
needs and problems by providing excellent customer
experience.

Speaker 4: Tung Lu
Weaknesses

• Relies on one source of income: more than 90 percent revenue of

Google comes from online advertising. In the future, Google ‘s growth
might decline or slow down because of their competition
• Unprofitable products: Google has so many products and services
that add no value to company profit such as Google reader, I Google,
Google health, and Google notebooks.

Speaker 4: Tung Lu
Opportunities

• Driverless electronic cars: Google has been successfully tested

driverless car recently.
• Google fiber cables: Google is currently testing fiber cables that can
deliver Internet content faster than current providers.
• Google TV: Google TV is new service that can offer TV programing,
movies, and more across the home Internet connection.

Speaker 4: Tung Lu
Threats

• Competition from Microsoft: Microsoft is increasing its market share

in Internet searches and becomes one of Google biggest rivals
• Competition from Facebook: Social media has been real threat for
Google in term of advertising.
• Potential lawsuit: EU currently accuses Google by using its Internet
search engine market to display its own services higher than
competitors

Speaker 4: Tung Lu
Question 1: Pay-Per-Click Search

 Benefits searchers
 Searchers don’t mind being advertised to as long as the product fits searcher’s needs
 Benefits advertisers
 Offers a unique means of putting their message in front of audience
 Benefits search engines
 Enables search engines to support advertisers and searchers simultaneously

Speaker 2: Shirley Kaeratana

Question 2: Comp Structure Internet Advertising

 Global spending on advertising in 2015: $537B

Internet’s share of ad spending: $121B
Percent market share: TV 40%, Internet 23.4%, Newspaper 15%,
Radio 6%
Big Ad Agencies (WPP, Omnicon, Publicis)
Internet Competitors: Facebook, Yahoo/Bing, Microsoft, Apple

Speaker 1: Robert Wise

Question 2: Comp Structure Internet Advertising

Googles revenue from internet advertising: $59B (66% of the market)

Methods of Generating Revenue:

1. CPC (cost-per-click)
2. CPM (cost-per-mille)
3. Revenue Sharing

Source: netmarketshare.com

Speaker 1: Robert Wise

Question 2: Comp Structure Internet Advertising

Search Ads Display Ads

Source: Business Insider.com Source: Business Insider.com

Speaker 1: Robert Wise

Question 2: Comp Structure Internet Advertising

Google’s Products:
AdWords: revenue stream from advertisers
AdSense: implementation of ads on mom-and-pop sites
AdMob: implementation of ads in mobile aps.

Google’s Revenues are safe:

Population is growing at 1.4%; Internet 8-10% annually.
Internet advertising (especially mobile) expected to grow.

Speaker 1: Robert Wise

Question 4: Google’s Success and Future in Paid Search

Source: comScore.com Source: comScore.com

Speaker 3: Thao Bui

 Question 4: Google’s Success and Future in Paid Search

GOOGLE ADWORDS: RESPECT USERS

+ Friendly feature + Keep layout clean
+ Flexible + Put ads separated
+ Better service

Speaker 3: Thao Bui

 Question 4: Google’s Success and Future in Paid Search

TECHNOLOGY: HUMAN RESOURCE:

+ PageRank + Having top talents
+ Low cost computer + Well working environment
+ Innovation Time Off

Speaker 3: Thao Bui

 Question 5:

What is Google trying to

do strategically?

Speaker 5: Huynh Vo
Question 5: What is Google trying to do strategically?

Business Strategy : individual strategy

Classic Approach – Adword
Visionary Approach – Google glasses

Corporate Strategy : strategic ambidexterity

Umbrella Corporation– Alphabet

Speaker 5: Huynh Vo
Question 6: Paradigm Shift

TCP/IP (1982)
DNS (1984)
WWW, Tim Berners-Lee (1991)
Mosaic browser (1992)
Google Search Engine (1998)

“Information Age”

Source: singularity.com

Speaker 1: Robert Wise

Question 6: Paradigm Shift

Google Search Revolutionized the Internet:

Changed industries: computers and internet (software & hardware)
Social global culture
Through: Algorithms, page authority, indexing keywords

“Information Age”

Speaker 1: Robert Wise

 Recommendations

#1 recommendation: Enter streaming TV market

Maintain massive scale (maps, docs, gmail, etc.)
Focus on mobile (Facebook, Twitter)
Continue to press Yahoo!Bing for SE market share
Compete in payments market (paypal)

Speaker 1: Robert Wise

Summary

90% of revenue from advertising

Innovative company: maps, docs, self-driving car
Primary success is combination of:
(1) Search Engine (1998)
(2) AdWords (2000)
Over 200 products improve Google’s “scale”

Speaker 1: Robert Wise

Quiz Question #1:

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Q&A:

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Backup Slide – Growth of Internet

Speaker 1: Robert Wise

Backup Slide – Future of Ad Growth

Speaker 1: Robert Wise

Backup Slide – CPC rates

Speaker 1: Robert Wise

Backup Slide – Market Share Advert

Speaker 1: Robert Wise

Backup Slide – Google Q. Ad Revenue

Speaker 1: Robert Wise

 Backup Slide – Reasons to invest in Google:

1. King of Internet Advertising Market

2. “Google” became an official word in
the dictionary
3. Android now has a dominant 75%
market share
4. Google + is gaining ground
5. Strong balance sheet
6. Positive on the stock

Source: Google Finance

Speaker 3: Thao Bui

Backup Slide – AdWords Auction ??

Speaker 3: Thao Bui

Backup Slide – SEO vs PPC AdWords

Speaker 3: Thao Bui

Backup Slide – Under Alphabet Company

Speaker 3: Thao Bui

Backup Slide – What Google Alphabet stands for

Speaker 3: Thao Bui