Google Case Study

Google

Google is named after the mathematical term "googol,” defined as the value represented by a one followed by 100 zeros. Google is the leading Internet search engine; its primary service is offering consumers targeted search results which is selected from more than 8 billion web pages. Larry Page and Sergey Brin, both Stanford dropouts, created the Google search technology from a school project. The site offers search results in more than 35 languages and attracts an audience of more than 380 million people worldwide.

When Google entered the online search market, Yahoo was the market leader. In a short time span, Google has become the best search engine by cutting into the market share of Yahoo and other players. Its innovative strategy to generate revenue by placing advertisements on sites, which contain information related to those ads, has indeed made Google highly profitable. In 2002, Google pioneered the concept of Ad Words and Ad Sense, and thus created a sensation in the field of online advertising. Innovation is a major strength, in case of Google. The smart strategies they played right from the start have wondered othe market players.

Google has also surprised everyone by launching Gmail, an email service, which offers a massive storage space of 1GB. Gmail, which was launched on April 1st 2004, has been quite successful in attracting long time users of Yahoo and Hotmail.

Problem Description

1. People choose to search on Google because of its relevant search results, its appeal, and the speed with which it provides the results. Although Google is a market leader in the Online Search industry, still it cannot stop users from using competing websites. There is absolutely no switching cost for the users. Thus, if someone else comes up with a quantum leap in Search technology, it will be difficult for Google to sustain its top position. Microsoft and Yahoo, both are continuously investing heavily in search technology and in gaining the market share.

2. Google is operating in an oligopoly industry with few competitors like Yahoo and MSN. Thus, with low differentiation within the search engine’s result it can become difficult for Google to retain its users. Yahoo and MSN are also launching their own search engines and targeted advertising systems; Google is locked in a race to develop new search tools to attract users and to expand its advertising networks.

3. Google listed click fraud as one of the potential "worries" that can affect its revenue. In fact, Google admitted to regularly paying refunds because of click frauds. Click fraud occurs a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an ad, for the purpose of generating an improper charge per click in pay-per-click online advertising.

For example: Network click fraud - you host Google AdSense advertisements on your own personal website. Google pays you every time someone clicks on its ad on your site. Its fraud if you sit at the computer and repeatedly click on the ad or write a computer program that repeatedly clicks on the ad. That kind of fraud is easy for Google to spot, so the clever network click fraudsters simulate different IP addresses, or install Trojan horses on other people's computers to generate the fake clicks.

Strategic Recommendations and Recommendation Analysis

1. Defend Market share: - Google may seem invincible, but it does face some challenges from its competitors. In order to defend its market share, Google will have to perform continuous improvement towards its products and services.

The dark shadow over Google's continuing progress is Microsoft. Google is hardly a small company, but it is still plausibly seen as a perky little David up against the lumbering Goliath of Microsoft, which undoubtedly has the resources to take on Google. Microsoft is constantly investing to improve its search features and combining it with Windows.

2. Transforming www.Google.com into a Web Portal: - Google can add a broad range of products, contents, communication tools and utility services to its website to compete head to head with Yahoo. The difference between Google and Yahoo is the revenue factor. Yahoo gets its revenue from Yahoo mail, ads, and some other features on its website, whereas Google gets almost 85% of its revenue from ads. Experts feel that this will become a problem for Google in the next