Five hundred years ago, Gutenberg invented the printing press. Since then, printed materials material
has been our largest source of information. But this scenario changed with the founding of Google
Ìnc. in 1998. Google is a worldwide online search engine that makes it easy to avail data online.
Google is based on the word "Googol¨ which means "1 followed by a 100 zeros¨ representing the
"immense volume of information that exists, and the scope of Google's mission: to organize the
world's information and make it universally accessible and useful.¨

Google was the brainchild of Sergey Brin and Larry Page, two Stanford Ph. D students. They wanted
to make search on the web faster and more efficient. They wanted to make the world's information
easily available. Ìt was initially called "Backrub¨ but the name was changed to Google as it had a
better ring to it. Google Ìnc. was incorporated as a privately owned company on September 4
, 1998.

The search works on their patented PageRank¯ algorithm. Google is the leading search engine in
the world today with a market share of 85.35%
as on December 2009 in the global online search
Google's core businesses (for a list of Google products, see Appendix 1) are divided into three main
O The primary product is its online search engine.
O Ìts revenue generating product is Google AdWords, which enables the advertiser to display
his advertisement to the right target audience via Google search. Google AdSense is another
advertising strategy that helps website owners display relevant ads to their viewers.
O Google also creates many useful web based applications that can be accessed anywhere,
anytime by all internet users created to make their life easier.
Google also develops other products that don't fall under these categories.
Industry Environment
Existing technoIogy and entry in the Industry
Ìn the 1990's, the web was very vast and nothing could be found if the web address was not known. Ìt
was unregulated and unorganized. People could log on and send emails or chat with each other but
locating a particular piece of information from the web was a nightmare for anyone doing research.
There were a few efforts to help users organize information in the form of search tools such as
WebCrawler, Lycos, Magellan, Ìnfoseek, Excite, and HotBot. But these search tools gave pages of
information completely irrelevant to what was required. Then the Yahoo! Search engine was founded
in January 1994 which used an alphabetized index of web pages from which search could be done.
This gave users the much needed access to valuable information but it could not keep up with the
growing size of the internet. And it was not comprehensive. All the search tools gave results in no
discernable order. Hence a person had to sift through it manually anyway. There was also another
search engine called AltaVista which yielded better and faster results but still fell short when it came
to relevance.
There was a specific environmental factor in the form of competition that facilitated Google to enter
the market with superior technology.
Dot com BubbIe
The 1990's saw the dot com boom where stock markets in industrialized nations saw the equity
value rise swiftly from growth in the Ìnternet sector and related fields. This boom symbolized a steady
growth in the internet sector. The possibility of reaching a global audience had new companies being
set up left right and centre. All a company had to do was attach a .com to it name to ensure success.
This proved beneficial to Google as it was entering the sector at the right time. Also at a time when
the web was growing in leaps and bounds, the then search engines did not have the technology to
keep up. This called for a better system of doing search. With the increase in popularity of Netscape
and the problems Microsoft faced during the boom, Google appeared to be benefitted. At this point of
time, search engine companies were diversifying into different avenues as they felt search did not
hold any future. But Google saw the potential in the search engine sector and made a decision to
stick to only search. They would diversify only if that as a by-product of search.
The general environment was favourable to the founding of a new internet based company. The
economic scenario was good as evidenced by the Dot com boom. Also there was a huge need for a
new technology to make internet searches give more relevant data.
urrent scenario
Google is still No.1 in market share. Ìn spite of the entry of many other search engines, Google's
flagship business, like Bing in the market, Google still has the highest market share. Ìt is also doing
extremely well in its revenue generation with Google AdWords taking the top spot in online
advertising. The simplicity and ease of use have helped Google in the long run.
The InternaI organisation
Organization structure
(see appendix 2 for organization chart)
Google has a very informal structure compared to the rest of the Engineering community. They try to
avoid bureaucracy so that people can do what makes sense in their project. One thing great about
Google is the employees are given more autonomy about their product and its direction. Only the
decisions on the selection of the project and other financial funding decisions are taken at the top
level. All other decisions regarding the ways to implement the project are taken at the bottom level.
Google has a flat hierarchy. Not more than 5 levels are present and the number of levels varies
depending on the project they are involved.
4 Programmer
4 Tech lead
4 Manager
4 Department lead
4 Larry/Sergey/Eric.
The Programmers at the bottom level are mostly in groups of 5 or 6. These programmers are grouped
in small teams. Each such small creative team is headed by a Tech lead who guides the
Programmers in the implementation of the Project. Only the basic outline of the project is given to
them and so they decide in the group various ideas to implement it. The Manager is in charge of
various such projects and he/she supervises these projects. The Department leader coordinates all
the activities taking up under his/her department. All these Department leaders have to report to the
top management on the project results. Google usually takes up projects that are of 2 to 3 months
duration. Thus, they encourage incremental changes rather than transformational changes in the
Decisions are taken by mutual adjustment and they have very few standardised rules. The employees
internalise the norms of Google by socialization which is very high due to its flexible and free
Google has a cross functional team structure and it is highly integrated. Ìnnovation is the most
important aspect of Google and they have an Organic structure to promote flexibility.
Because of the flexible structure that Google possesses, Bottom up change is used while taking any
decisions. Each employee is selected based on HRM techniques and they are distinct from one
another in terms of their experience, background etc. The concentration of talent in Google is quite
vast and this provides them an opportunity to be more creative. The flexible teams also help
employees share their viewpoints with one another and hence they can keep improving their skills
despite working on similar projects unlike in other companies.
Google has realized that a strong relationship exists between organizational culture and performance
and which in turn influences employee motivation. Ìt has thus developed an integrated culture which
exactly fits into the need of the organization and the market as well. The employees know the
importance in their work, and their goals are aligned to the organizational goals.
The life at Googleplex is a total fun filled experience. With cozy couches and beanbags to fridges
stocked with free drinks ; lava lamps to meeting rooms named after rockstars; full fledged gyms to
state of art sports facilities, Google ensures a happening life for its employees. With a wide range of
snacks to choose from at the snacks rooms to gourmet meals served in the cafeteria, Google sees to
it that its employees are healthy. Apart from taking care of the basic physical needs, it does its best to
make its employee stress free at work by providing for their physiological, safety, social and esteem
Google offers excellent employee packages and perks which motivates its employees to be the best
at work. By providing free movie tickets for family, ski holidaying and through other social excursions,
a strong bond is created among the employees. Even the small things like the brightly painted Google
Logo give them a sense of belonging in the organization.
Google encourages innovation at all levels. They have developed a 20% rule which allows their
employees to devote 20% of their work time to the projects of their choice. This makes them think 'out
of the box' and develop new products. For this, they had set up an exclusive internal webpage for
tracking new ideas and implementing them.
Google follows a careful recruitment strategy where they choose the right sort of person to enter the
organization and maintain the same fun at work culture. They prefer intellect and creativity over
experience. Academically excellent candidates from top ranking institutes, with wide range of skills
and qualities and above all with the right mindset were chosen.
Even during times of crisis, the company witnessed no employee turnover compared to the other
companies. Redundant managerial hierarchies were removed and its employees were allowed to
work and take decisions on their own. While many felt that this culture led Google to the path of
success, there were others who felt the other way, they felt that the informal culture would lead to
confusion among the stakeholders. They doubted whether Google would be able to sustain its growth
with such a culture.
$trategy and Practices
Their code of conduct in all business transactions follows the phrase "Don't be Evil¨. This is one of the
ten main philosophies of Google (see appendix A for all ten philosophies). So all their strategies are
based on this principle, Google thrives on innovation to stay ahead of competition. Their marketing
strategy is also very different to other companies.
O arketing
Google's marketing has been mainly through word of mouth. They have not invested in a widespread
marketing strategy. They have eschewed traditional forms of media (print, radio television). They did
not want to spend too much money on advertising. They preferred to invest in hardware for perfecting
their product before taking it to venture capitalists. They felt that their products should speak for
The initial marketing that they did was in simple and easily implementable but far reaching and
innovative. The founders did not want flashy, loud ads. Some of the marketing strategies they
followed were giving out free pom-poms in all Stanford Universities' home football games, opening an
online shop selling caps, t-shirts, lava lamps and other items with the Google logo on them. They felt
that if a person used a Google product, he would be eager to tell his/her friends about it. Google
became a brand to be reckoned with not by a fantastic ad strategy but by letting their users and news
media do their marketing for them. Google carries forward this very effective marketing strategy till
One of the most interesting features of the Google search engine was the fact that there were zero
ads on the main search page. They could have harnessed a huge amount of revenue by displaying
ads on their main page. This made the page load faster and improved user experience. This spoke
volumes about the company and users felt that, to Google, they were more important than mere
revenue. This built the company's name better than any advertising.
O uman Resources
Ìn Google, employees are the backbone of the company. So a lot of measures are taken to keep them
happy and satisfied. Their offices are designed to make their employees feel at home. They were
treated like family. They were fed like family, with healthy juices and abundant snacks at every corner
of the office. They also had a lot of services like onsite laundry, hairstyling, day-care, medical care
etc. there was also a gaming area where the employees could relax and de-stress. There are many
employee benefits, for instance, Employees need to work for 80% percent of the time on their core
project and the other 20% on their own projects. The recruitment process is very rigorous and there
are several rounds of interview process before a candidate is chosen. They pick the best of the lot so
that good work can be done. One case in point is the hiring of their CEO Eric Schimdt. he has since
helped the company substantially. Google also has an Ìnternship program to bring in some of Ìndia's
best minds for around two months to undergo the Google experience.
O Research and deveIopment
Google invests a lot of time and energy in Research and development. They give their employees
loose targets and let them work on it. They encourage R&D activities by infusion of large amounts of
money into these activities. The budget for R&D has been increased substantially such that almost 13
percent of the total revenue is spent in R&D. their strategy is to develop path breaking products that
appealed to the people.
O Revenue generation Activities/Finance Activities
Ìnitially the company started out with a $1 million investment from one Mr. Andy Bechtolscheim, an
angel investor and from family and friends. They were later backed by the venture capitalist firms,
Sequoia capital and Kliener Perkins who each put up $25 million. The most important thing was that
all those who invested firmly believed in the technology of the company. Today Google is worth $150
The main money making mechanism of Google is the Google AdWords. This is a system where
advertisers pay to put up advertisements of their company alongside a search result of relevance.
That is, if a person searches for 'Car' on Google, then a car manufacturers' ad will be displayed on
the right hand side of the page. So if a user decides to click on the ad, then the car manufacturer has
to pay Google. So the entire system is based on a pay per click basis. Google AdWords was
responsible for $23 billion in 2009
Google enjoys the number one position in the online advertising market. Google does not advocate or
offer pop up ads or ads that scroll along the length of the page or quick links on a word as they feel
this makes the customer experience less enjoyable. And for Google, the customer means everything.
Google China issue
Microsoft competition
other issues

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