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GROUP 3, SECTION - X DAMANJIT SINGH AURORA U111074 DIBYA RANJAN PATTNAIK U111077
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Introduction
Google Inc. is an American search engine company which was founded in 1998 by Sergey Brin and Larry Page. It has been found that more than 70 per cent of worldwide online search requests are handled by Google, placing it at the heart of most Internet users experience. The headquarters of Google are located in Mountain View, California. Initially Google began as an online search firm, but now it has diversified its portfolio and offers more than 50 Internet services and products, starting from e-mail and online document creation to software for mobile phones and tablet computers. In addition to this, its 2012 acquisition of Motorola Mobility put it in the position to sell hardware in the form of mobile phones. Googles broad product portfolio and size make it one of the top four influential companies in the high-tech marketplace, along with Apple, IBM and Microsoft. Despite this myriad of products, its original search tool remains the core of its success.
History
1996: Larry and Sergey, two computer science grads from Stanford began collaborating Backrub, a search engine. 1997: Larry and Sergey decide to rename the Backrub to Google. 1998: PC Magazine reports that Google has an uncanny knack for returning extremely relevant results and recognizes Google as the search engine of choice in the Top 100 Web Sites for 1998. 2000: Announces the MentalPlex - Googles ability to read your mind as you visualize the search results you want. French, German, Italian, Swedish, Finnish, Spanish, Portuguese, Dutch, Norwegian and Danish are the first 10 languages that Google is released in. Won the Webby awards. Forges a partnership with Yahoo! to become their default search provider. Announces the first billion-URL index and therefore Google becomes the worlds largest search engine. Google increases the language supported by it to 15 by adding Chinese, Japanese and Korean. Google AdWords launches with 350 customers. 2001: First public acquisition: Deja.coms Usenet Discussion Service, an archive of 500 million Usenet discussions dating back to 1995. Added search and browse features and launched it as Google Groups. Launched Image Search offering access to 250 million images. 2002: The first Google hardware is released: its a yellow box called the Google Search Appliance that businesses can plug into their computer network to enable search capabilities for their own documents. Released a major overhaul for AdWords, including new cost-per-click pricing. Announced a major partnership with AOL to offer Google search and sponsored links to 34 million customers using CompuServe, Netscape and AOL.com. Released Google Labs, a place to try out beta technologies fresh from our R&D team. 2003: Accquired Pyra Labs, the creators of Blogger. Launched Google Grants an in-kind advertising program for nonprofit organizations to run in-kind ad campaigns for their cause. launch Google Print (which later becomes Google Book Search), indexing small excerpts from books to appear in search results. 2|Page
Founded in 1996
2001 marks the beginning of Google's acquisition spree which continues till today
Launches a slew of new apps like Gmail, News, Picasa etc. in 2006
Enters the mobile devices industry in 2010 with the launch of Android and Nexus One
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Vision
To make search engines so powerful that they would understand everything in the world.
Mission
To organize the worlds information and make it universally accessible and useful.
Product Portfolio
While Google is primarily known as a search engine to many internet users, the bulk of Googles profits come from its products for the business users. While there are several such products, we will be focusing only on the below three products:
Google AdWords
Google Analytics
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Google AdWords
Google AdWords is an advertising solution for businesses where businesses can use customized online ads to promote their business on Google. The businesses can create ads after choosing keywords (which are related to the business) and these ads then appear on Google search results when people use Google to search for keywords.2
Google Analytics
Google Analytics3 is a statistics platform which can be used by businesses to measure the effectiveness of their website and their advertising spends. Depending on the integration of Google Analytics with your website: Measure sales and conversions on a e-commerce website Insights into which parts of the website are performing well How is the website being discovered by users through search engines or referral from other websites like social networks ROI on advertising spends
Product Demand
Google Apps for Business
The demand for Google Apps for business remains strong with over 5 million businesses using it so far. Some of the key customers of Google Apps for business are: Virgin America HunterDouglas Jaguar Land Rover Konica Minolta
Google has continued to invest in developing newer applications for Google Apps for business which has yielded incremental revenues from existing customers and also brought in new customers. Google shares several success stories from its customers on its website4 and its blog5 as well.
Google AdWords
While Google does not share the number of customers for Google Adwords it does regularly share success stories of its customer on the official website and blog as well. However marketing research firm, Wordstream published an estimate of the spends made by different industry sectors in Google AdWords for last year i.e. 2011. 1. Finance & Insurance $4.0 Billion 2. Retailers & General Merchandise $2.8 Billion 3. Travel & Tourism $2.4 Billion
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Google AdWords http://adwords.google.com Google Analytics - http://www.google.com/analytics/features/index.html 4 Google Apps for Business Customers - http://www.google.com/enterprise/apps/business/customers.html 5 Google Enterprise Blog - http://googleenterprise.blogspot.in/
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These 10 industries contributed close to 60% of Googles 2011 revenues. Remaining $14.4 billion in revenues came from other industries.
Google Analytics
Like Google Apps for Business, Google again shares it complete list of customers for Analytics on its website6. The customers are segregated into the different sectors they operate in along with the various features of Analytics that they use. Some of the major customers for Analytics are: Puma Travelocity Nissan Shoes of Prey Swissotel
Product Pricing
Google Apps for Business
Google Apps for Business offers three pricing structures for its customers. It can be used for free by individuals and teams of less than 10 users. Above 10 users, Google charges a per user/per month price structure
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Google AdWords
Google AdWords is the main source of revenue for Google. AdWords offers pay-per-click, i.e, costper-click (CPC) advertising, cost-per-thousand-impressions or cost-per-mile (CPM) advertising, and site-targeted advertising for text, banner, and rich-media ads. Google AdWords pricing depends on the keywords the business uses to advertise on Google. The more competition in the keywords, the more is the price. The businesses pay a certain amount (no minimum limit) and then pay once the amount is exhausted.
Google Analytics
Google Analytics has two pricing schemes Free and Premium at an annual fee of $1,50,000.7
http://www.google.com/analytics/premium/features.html
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Google Apps for business is a hosted system, where Google maintains and runs the messaging and collaboration system, and provides access to it through Software as a Service (SaaS) model. Google Apps customers incur a $50/user licensing fee in each of the three years. Google Apps customers have no annual maintenance costs (as these are included in the annual licensing fee). This calculation has been done for Mid-Size Business. Google Apps 50 0 3 36 1 0.6 91 Microsoft Exchange 111 26 39 102 8 8.81 295
1. Acquisition Cost 2. Annual Maintenance Cost 3. Set up and configuration cost 4. On-going administration cost 5. Downtime costs 6. Training Costs, and Total
The calculation suggests that Google has a winner in its product. The TCO for Google is less than 1/3rd of Microsoft exchange.
Marketing Analysis/Activities
Google Apps for Business
Google Apps for Business is a safe, secure and reliable solution for email, calendaring and collaboration tools. It is an integrated communication and collaboration solution. This consists of 1. Gmail 2. Google Calendar 3. Google Talk 4. Google Docs 5. Google Sites 6. Google Video For Google Apps Business they also have these additional features.. 1. 2. 3. 4. 5. 6. 7. 8. US$50 for an account per year, or US$5 per account monthly Text ads optional Integrated Postini policy-based messaging security Conference room/resource scheduling 99.9% e-mail uptime guarantee APIs available for Single Sign On 24/7 phone support Storage space 25 GB in each account, allocated for use across all products including e-mail
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Google AdWords
Google's text advertisements are short, consisting of one headline consisting of 25 characters and two additional text lines consisting of 35 characters each.
Google Analytics
Google Analytics Premium is a new web analytics from Google, designed specifically for enterprises. Since it was designed for enterprises, Premium is built on a separate data processing pipeline, with its own unique development. All of the Advanced Analytics Tools in development will be available in this version. It is for companies or enterprises with high traffic volume typically. 1. 2. 3. 4. Lifts on data limitations Faster data processing 50 Custom Variables (up from 5) Access to unsampled data
Distribution
Distributed on-line i.e. via internet.
Customer Interface/CRM
Google Apps has a separate Department and a Key Account Manager for specific Geographies. They also use customer information for advertising. Google has a very good database which maintains and tracks each and every customer of Google. They create profiles about the customer and continuously help them with more and better solutions. Unlike many industries in doing business with Google, the power resides with the Company and not the vendor. In the new age Industry of IT products are highly costly and Companies like Microsoft have been making millions by selling their products, Google came up with a disruptive innovation when it launched Google Apps. The App can be downloaded for free for a 30 day trial period. Also Google Apps provides the solution free of cost for education sector like Universities and Colleges. Thus it builds a captive client base during any users college days. This is a great way to build relationship with the customer.
Cross-functional Co-ordination
Google has separate online Sales and Operations strategists, Deployment Representatives, Account Managers etc. They have clearly defined set of roles and they have to interact with the Google Development Team and customer feedback team. This is evident from each and every offering of Google as well. They constantly strive to improve the product based on customer need and complaints. Their Partnerships teams are made up of technologists, entrepreneurs and leaders who have an eye for whats next and develop relationships with a range of organizations, from content providers to publishers, and find ways for them to reach their audiences and manage their digital businesses. The teams also help them expand the businesses into new territories, working across Google to develop products and ideas that revolutionize the way people connect with information today.
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Supplier HIGH
1. The advertisement system of Google is a reliable source of income as long as Google's search engine dominance continues. 2. Switching costs are high as it is not easy to find a provider with same level of security and reliability.
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Weakness
It is difficult to differentiate between the real contents and the fake ones Less foothold in the enterprise domain. Failure to successfully launch Buzz. Questions on Google's ability to handle both hardware and software. Information can be manipulated Other contents of Google like Google maps, Google finance, Google book etc are not known to the people Filtering of the information and the material supplied The research is not the expert research Random content. Emergence of other search engines. Employees moving out of Google.
Opportunities
Online books are becoming popular . Focus on the mobile hardware and software sector could give it larger revenue. Google can popularize use of its various softwares like google maps, google earth, google finance etc. Earn revenue through those sponsored ads Other sites like Picasa, YouTube, Android are associated with Google and Google can strengthen its reach and position by using these sites.
Threat
Google's monopoly being challenged by sites like wikipedia , ask,com and search engines like Bing. Users sometimes get confused between the information Unsatisfactory search results. Google is suffering loses due to the recession Expectation of more quality and authentic work Google does not motivate their contract employees.
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Brand
Google has always been conscious about its brand. It has been found that Google is one of the most recognized brands worldwide. It has been the most important word in everybodys life that uses internet. This shows the strength of the brand which Google possesses.
These are some of the most important factors in developing any great technology company. Strong customer-focused technology has resulted in making money which is the formula what Google follows. Even building the brand, which can be excessively expensive to develop involve high amount of customer traction which likely follows product leadership. The Google success is not rocket science rather its a step by step process of company and brand building which has followed the path of discipline. This has led to a development of excellent model which many companies follow.
Competitive Scenario
Product Performance:
Organization Product Performance Google Apps Started out as consumer solution, now focussed on business Considered the King of the Web Equally good Microsoft Exchange Built for business and offers solid security and reliability Reputation on downward slide. Equally Good 12 | P a g e
To conclude, Google Apps has come out with a very strong product against Microsoft and is a strong Competition but Microsoft Exchange remains the industry standard email platform. Overall, Microsoft exchange does the best job of meeting the needs of Small and Medium businesses but at a very high cost.
Market Performance:
Google Chrome is increasing its market share very rapidly. In November 2011 it overtook Firefox and if it continues like this then it could very well overtake IE (Internet Explorer). In the search engine sector Google still has a mammoth market share of 66.2% and growing. Its nearest competitor is Bing which is at 15.2%. Google increased its revenues by 24% to $10.65 billion compared to the first quarter 2011 revenues of $8.58 billon. Google-owned sites generated 69% of total revenues i.e. $7.31 billion in the first quarter of 2012 which is a 24% increase over first quarter 2011 revenues of $5.88 billion. Googles partner sites generated revenue of $2.91 billion in the first quarter of 2012, which represents a 20% increase from first quarter 2011 network revenues of $2.43 billion. Revenues from outside of the United States totaled $5.77 billion an increase compared to the first as well as the fourth quarters of 2011. Aggregate paid clicks increased approximately 39% over the first quarter of 2011 and 7% over the fourth quarter of 2011. Google Apps for Businesss market share is shown to growing. Recently it earned the ISO 27001 certification, one of the most widely recognized and internationally accepted standards for security. Google Apps is taking away more business from Microsoft as an enterprise service provider. In fact one-third to one-half of new, paid-for, cloud-based office system seats are won by Google. 96% of Googles revenues came from advertising related sources. Many companies even giants like AT&T use Google Adwords for improving business.
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Googles report says that Google analytics is currently installed in over 10 million websites but builtwith.com has found 15,447,000 websites with Google Analytics code installed. (Builtwith has around 133millon domains in their index.) In comparison, Omniture has been found on over 198,000 websites, WebTrends on 47,000 sites, and Coremetrics has been found on 9000 websites. But if revenue is to be taken into account Adobe Omniture site catalyst would be the leader due to the paid service and average revenue of $100000 per client.
Ethical Standards
Googlers generally believe that Dont be evil and apply the same to serve its users. They believe that its all about providing unbiased access to information for their users focussing and catering to their needs and giving the best products and services which they can provide. They want to provide all these in a right way- following the law, acting honourably and treating each other with respect. They believe that whatever they do in connection with their work at Google should be measured against the highest possible standards of ethical business conduct. Their commitment to the highest standards helps them to have a pool of great people, come up with new innovative products and attract the customers who are loyal to them. The key foundation of Googles success is the trust and mutual respect among the employees and the users. Its expected that the ethical stands and code of conduct should be followed by its employees and Board members. Failure to do so can result in disciplinary action, including termination of employment. Its also expected that the consultants, Google contractors and others who are
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CSR
Google is creating a better web that's better for the environment. They are using resources efficiently and supporting renewable power and thus greening their company. That means every time we use Google products, we are being better to the environment. Google has worked hard to minimize the environmental impact of their services. The face is when a Google product is provided or used for a month, their servers use energy per user than leaving a light on for 3 hours. If we add in the renewable energy and offsets, the footprint is zero. They have been working hard to find reduce the impact even further so that they can serve the society in a better way.
Data Centers
The Data centers used by Google are one of the most efficient in the world. They use only 50% of the energy of most other data centers which has saved billions of dollars in energy costs and reduced the impact on the environment.
Renewable Energy
Currently, very little of the worlds power is from renewables like wind and solar. Google is working on changing that by buying electricity directly from wind farms near their data centers. They get clean energy at competitive prices, the wind farm owners get the money they need to finance new clean energy facilities and together they make the grid a little bit greener.
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Footprint
Googles efforts in efficiency, buying clean energy, and purchasing offsets have brought their carbon footprint down to zero. Now they are going beyond carbon neutral by investing huge money in renewable energy projects that will create far more renewable energy for the world than they consume as a company.
Apart from the above initiatives Google is actively involved in philanthropy and to addressing the global challenges of climate change, education and poverty alleviation. Since 2007 Google has also taken a step ahead to start social initiatives in China. They believe that by leveraging their strengths and resources in-country, they will create awareness of the importance of corporate philanthropy and encourage people and society to participate and contribute towards social responsibility. Highlights of few initiatives taken by Google: Google China Social Innovation Cup for College Students Supporting earthquake relief efforts Google Grants Other Charitable Endeavours 16 | P a g e
Conclusion
Even though we know Google as the search engine major, it has got solutions for business as well which come with different pricing structures depending on the usage criteria. Google keeps on introducing new products every year wherever there it sees an opportunity. It also shuts down products which fail to gain a market share even after being in the market for a couple of years. In the last financial year, Google derived 96% of its revenues from advertising which can be a major risk. Microsoft is known for its office applications on the desktop but it has not been able to make a major impact on the web in spite of launching several apps. Google rules the roost in the web arena but this might change in the coming years with the recent launches of Windows 8 OS and Microsoft Office 365. Google also chooses to pursue an inorganic growth strategy acquiring several successful start-ups every year. In fact it acquires and develops these start-ups into successful products. Some of the products like Google Docs and Google Analytics came from the acquisitions made by Google. Google also does not have much of a stronghold in the enterprise. Microsofts latest offering Office 365 looks poised to gain a good market share in the collaborative documents editing area and Google Docs feature set pales in comparison to Office 365.
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