Google's Business Strategy 2

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GOOGLE'S BUSINESS STRATEGY 2
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AN EMPIRICAL ANALYSIS OF THE STRENGTHS;
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WEAKNESSES; OPPORTUNITIES; AND THREATS
(SWOT) OF GOOGLE INC.
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GOOGLES BUSINESS STRATEGY
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6/1/2010
BY: KWAKU F. DARKWAH
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(MBA; PMConsult; B.ED; CTLLS; ASSOCIATE-CIPD; MInstLM)
CEO/FOUNDER: ADESUA GLOBAL, GHANA
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GOOGLES BUSINESS STRATEGY:

AN EMPIRICAL ANALYSIS OF THE STRENGTHS; WEAKNESSES; OPPORTUNITIES;
AND THREATS (SWOT) OF GOOGLE
BY: KWAKU F. DARKWAH

(MBA; B.ED; CTLLS; ASSOCIATE-CIPD; MInstLM)
CEO/FOUNDER: ADESUA GLOBAL, GHANA
LECTURER-MANAGEMENT DEPARTMENT, LONDON SCHOOL OF MANAGEMENT
EDUCATION (LSME)
JUNE, 2010
ADESUA GLOBAL www.adesuaglobal.com Page 2
FOR COLLABORATION AND RESEARCH CONSULTANCY CONTACT ADESUA GLOBAL

THIS ARTICLE IS DEDICATED TO
ALL ASPIRING
BUSINESS ENTREPRENEURS

Table of Contents
Chapter Title Page
1:1 Introduction...................................................................................................4
1:2 Historical perspective and origins.................................................................4
2:1 Products of Google.........................................................................................5
2:2 Googles financial status to date...................................................................5
3:1 Insights into Googles people and culture.....................................................7
3:2 Business model of Google..............................................................................7
4: 1 Introduction of swot analysis........................................................................9
4:2 Googles markets........................................................................................10
4:3 Key technologies of google.........................................................................12
4:4 Qualities of personnel...................................................................................12
4:5 Board of director operating committee.....................................................12
4:6 Capital base and revenue streams.............................................................15
5:1 Weaknesses of Google................................................................................15
6:1 Opportunities and competitive analysis.....................................................17
6:2 Threats and reactions of yahoo, Microsoft and Amazon...........................19
7:1 Reflections on Googles mission statement................................................20
7:2 Appraisals of the companies acquired by Google.......................................21
7:3 Googles building of a sustainable competitive advantage.........................23
7:4 Googles recruitment strategies and company culture................................24
8:1 Conclusion....................................................................................................25
9:1 References....................................................................................................27

1:1 INTRODUCTION
Arguably, in the last 10 years since the expansion of information technology as a
result of the internet; one astounding firm that has impacted on our lives is Google.
All age groups; different ethnic backgrounds; different religious backgrounds;
different political backgrounds and affiliations all have been influenced by the impact
of this organisation. Debatably, Google is one of the most powerful search engines in
the world. Arguably, it can be said that Google is the most visited website in the
world. It is now worth in excess of $94billion, although its value has more than
halved since December 2007 (Time, 2008). Google attracts about 61.9 per cent of all
internet searches online. According to Clark (2007) Google accounts for 56% of all
searches on the internet according to the online research firm Comscore. In UK,
Google is visited more than any other website or online site with 28.6m unique users
in September, 2007 - reaching 89% of all UK internet users.
This article is aimed at analysing the business strategy of Google in terms of its
historical perspectives; business concept; SWOT analysis; competitors analysis and
critical success factors.
1:2 HISTORICAL PERSPECTIVE AND ORIGINS

Historically, according to Times online (2008) Larry Page and Sergey Brin founded
Google in 1998, backed by $100,000 from Andy Bechtolsheim, the Sun Microsystems
co-founder. These two friends met in Stanford University where they were both
doing a PhD course in 1996. The name Google originated from the word googol
which referred to the number 1 followed by about a hundred zeros. The search
engine initially used the Stanford website to host their domain name google.
stanford. edu. In September 15th, 1997, the domain name google.com was officially
registered and in the following year, precisely September 4th, 2008, the two friends
officially registered their company as Google Incorporated and used their friends
garage in Menlo Park, California as their office.

Googles simplicity in terms of the design of their website attracted a lot of internet
users. The two friends, Page and Brin started the search engine firm with an initial
$100,000 they got from Andy Bechtolsheim, co-founder of Sun Microsystems in
August, 1998. Google has grown over the years to become the most searched engine
in the world, outperforming firms like Yahoo; MSN; AOL; and CNN.
In 2004, it was reported that google handled more than 85% search requests on the
World Wide Web. Google is now one of the most visited search engine in the world.
The total employees of Google as at September, 2009 were almost 20,000 people.
2:1 PRODUCTS OF GOOGLE

The list of products offered by Google are numerous and diversified. It includes
Earth; Chrome; Picasa; Visigami; SketchUp; Talk; Gmail; Google News; Google
Mobilizer; iGoogle; Google Reader; Google Latitude; Google Maps; Google Talk;
Google Sync; Ad Sense; iGoogle; Orkut; Knol; Google Mini; Google Trends; Google
health; Google Mobilizer; Google Double click; Google FeedBurner; Google Gadgets;
and Google Profiles. All the products of Google are very useful and have made a lot
of impact in the way we communicate; access information and locate things easily.
2:2 GOOGLES FINANCIAL STATUS TO DATE

A research on Googles official website revealed that as at end of year 2008, the
revenue of Google have increased by 31.3% to $21.796 billion; the operating income
have also increased by 30.4% to $6.632 billion; net income appreciated by .6% to
$4.227 billion. Total assets of the organisation were up and valued at $31.768 billion;
total equity was also valued at $28.239 billion. Since 2001, Google have made
strategic acquisitions to consolidate its position as the most popular and visited
website. Google acquired a firm called Key Hole Inc. in 2004 and renamed it as
Google Earth. It has also acquired You Tube; Double Click; and Grand Central among
others to strategically sustain its business concept. It has also entered into
partnership with NASA Research Centre to work on research projects that involves a
large-scale data management to help improve space technology.

3:1 INSIGHTS INTO GOOGLES PEOPLE AND CULTURE

Google Inc. was started with only 2 classmates who later formed one of the most
powerful search engine companies in the world. At present, the company employs
almost 20,000 people worldwide. The three key people in the company are the two
founders Lawrence E. Page and Sergey M. Brin; the former also plays the role of
Technology President; whilst the latter also plays the role of Products President. The
Chairman and CEO is Eric E. Schmidt.
Google maintains an organisational culture that makes it very attractive; conducive;
convenient; and lovely place to work. It has a homely and serene atmosphere where
all kinds of people from different ethnic backgrounds can work. There is a sense of
we-togetherness amongst the staff. They feel part of a team focusing on achieving
the goals of Google. Google embraces multi-cultural employment opportunities and
most of the people working in the firm come from diverse backgrounds. All the
people who work at Google believe that all their efforts will add value to the
company and as such they are dedicated to their work. They are very committed to
the cause of Google and want the firm to be at the top of the competition at all
times. The people working in Google are encouraged to be innovative and as a
motivation for the staff at Google, the engineers are encouraged to spend 20% of
their work time on any interesting project they think will add value to the firm. This
innovative and motivational policy has enabled the engineers to create interesting
services like Ad Sense; Google News; and Google Mail.
Googles office in California which they have labelled as Googolplex is very much
designed to make the people who work in Google feel at home away from home.
The atmosphere and environment is very much conducive and convenient for all the
staff because all the facilities they need is available for them.
3:2 BUSINESS MODEL OF GOOGLE

Google Inc. has a unique business model that sets it apart from its major
competitors. According to Chaffey (2007) Googles business model is encapsulated in
the SEC filing statement, to organize the worlds information and makes it
universally accessible and useful. Googles major task is to make information easily
accessible to its major stakeholders namely the people who seek for information on
the internet. In support, Chaffey (2007) insists that Googles model is highly geared
to offer the best and quality service to the users so that their experience will lead to
a strong word of mouth promotion and strong traffic growth.
In this regard, Google have acquired or form alliances with You Tube; e-bay; Yahoo
(now abrogated); and Amazon. Google aims to collaborate or merge with the top
online firms and through these innovative collaborations and mergers enable them
to stay on top of its major competitors.
Fig: Google technical architecture
SOURCE: (http://www.davechaffey.com/E-commerce-Internet-marketing-case-
studies/Google-case-study/)
According to Dwivedi (2008) Google have move further from its initial core business
model into different business concepts by expanding into different marketing
offerings to its numerous clients such as Picasa; Blogger; Keyhole; Gmail; and Google
News etc. Dwivedi (2008) claims that Google is primarily advertising firm, because
90% of its revenue and income comes from online advertisement for various other
websites. Google allows any new business to start advertising online without any
need to hire the services of professional graphic designers; or advertisement
consultants. Google is very keen on providing any services online that will enable the
users and patrons to be efficient and save a lot of time in their quest for knowledge

and information. Google aims to redefine the process of e-commerce and e-business
so that it will be more attractive to its users. In a nutshell, Googles business model is
to advertise and provide services to all online users. Google has become the most
identified and recognized brands outperforming Coca Cola and McDonalds because
of its vastly search engine. Any online market or firm that attracts a lot of users is a
business target for Google. That is why Google have either acquired or have some
strategic alliance with firms like You Tube; Amazon; and My Space.
4: 1 INTRODUCTION OF SWOT ANALYSIS

SWOT analysis is a management tool that is used by most corporate organisations in
making decisive strategic decisions that helps the organisation to be stable and
sustainable in the long term. Bono and Heller (2005) and Stettinus et al (2007)
suggest that one of management's trustiest tools is the SWOT analysis. SWOT is an
acronym for Strengths; Weaknesses; Opportunities; and Threats. The Strength and
Weaknesses are within the organization; whilst the Opportunities and Threats are
beyond the organization in the wider external environment. Bono and Heller (2005)
claims that the SWOT is to capitalize on the Strengths, Eliminate the Weaknesses,
seize the best Opportunities and counter the Threats. In terms of the application of
the SWOT analysis, most business organizations including Google can have some
vital strengths; weaknesses which are internal, whilst they are also benefiting from
the opportunities and affected by the threats in the external environment. The
strengths of various business organizations include a high global presence; cost
reduction through economic of scale; strong and famous brand names; easily
location on the internet. The following information below details the strengths and
weaknesses of Google.

Source: (http://www.businessteacher.org.uk/wp-content/swot-analysis-image.png)
4:2 GOOGLES MARKETS

Google is an entrepreneurial and an innovative corporate organisation that has one
of the unique marketing strategies which is unparalleled in the history of online
technology. Google apart from being the leading internet search engine in the world,
also continuously and consistently strive to bring to the market various innovative
products. Google has a marketing strategy that focuses on the youth of the world
who want to seek information; have fun; gain knowledge; and be well acquainted
with all that evolves around the environment they live. Google has a diverse
customer base ranging from young people to the older people.
Google targets all the people who use the internet. Anyone who uses the internet
search engine is a potential market for Google because by using Google search
engine you are making money indirectly for Google. Google has in its portfolio
thousands of corporate organisations; millions of Small Medium Enterprises (SMEs)
who all uses the internet search engine to search, share and visualise their business
information for expansion and promotional purposes.
According to Opendb.net (2006) Google has indexed more than 8 billion web pages
on the web and is the most popular search engine on the web today. It has become a

norm and standard procedure that anyone with an Internet connection can use the
website to look for information that s/he needs.
Any online organisation that attracts a sizable number of visitors is a market target
for Google. Their business strategy is to be ahead of the major competitors and will
leave no stone unturned in its quest to be the leading internet search engine in the
world. Google in recent times have been tactically making in roads into markets
previously not part of their business model. Reuters (2009) reported that Google
have entered the navigation market and have become a direct threat to Garmin Ltd
and TomTom. Google CEO, Eric Schmidt claimed that expanding into a new market
with new competitors was not part of Googles motivation (Reuters, 2009) but
strictly speaking the company is just positioning itself to the public, especially cell
phone users who are now very much accustomed to having maps in 3 Dimension on
their cell phones.
In summarising the market of Google, it can be deduced that majority of internet
users are in one way or another impacted upon by Google and as such the market
for Google can be equated to the number of online or internet users.
4:3 KEY TECHNOLOGIES OF GOOGLE

Google uses a perfect search engine that to a large extent understands exactly what
you mean and gives you exactly what you want (Reuters, 2009). Google uses a
software technology that is able to conduct a series of simultaneous calculations
within a fraction of a second and in comparison with other traditional search engines
that relies on how often a word appears on a web page. Google uses more than 200
signals in addition to their patented PageRank algorithm which enables the
examination of an entire link structure of the web to determine which pages are
most important. In addition, Google (2009) uses Page Rank Technology and
Hypertext-Matching Analysis. The Page Rank Technology uses more than 500 million
variables and 2 billion terms to enable the profiling of important pages to receive a
higher page rank and appear at the top of search results. The Hypertext-Matching
Analysis is a search engine of Google which analyzes the full content of a text page

and all the various technicalities such as the fonts and content of neighbouring web
pages to enable the results to suit the information request wanted by the user.
1. The web server sends the query to the

3. The search results index servers. The content inside the index
are returned to the servers is similar to the index in the back of a
user in a fraction of a book - it tells which pages contain the words
second. that match the query.
2. The query travels to the doc

servers, which actually retrieve
the stored documents. Snippets
are generated to describe each
search result.

FIG: THE LIFE SPAN/ CYCLE OF A GOOGLE QUERY

SOURCE: (http://www.google.com/corporate/tech.html)
The life span of a Googles query undergoes a number of different steps that must be
completed before the results are given to the user who typed in the information. The
fascinating fact about this process is that it lasts just over less than half a second for
the results you want to be available for your viewing.
Other key Google technologies include fusion tables; Google moderator; Picasa;
4:4 QUALITY OF PERSONNEL

Google has an astounding profile of men and women with high academic
achievements and experience in various endeavours in information technology and
knowledge management. Most of their top corporate executives have at least an
MBA and PhD in various disciplines which are very relevant to the vision of Google. A
detailed reading of their profile will reveal that they are members and fellows of
reputable associations and councils. For instance, Eric Schmidt, the CEO of Google is
a member of President Obamas Council of Advisors on Science and Technology. He
was also inducted to the America Academy of Arts and Sciences as a fellow in 2007
(Google, 2009). Below is just a few of Googles staff and their designated titles:
4:5 BOARD OF DIRECTORS
Eric Schmidt, Google Inc.

Sergey Brin, Google Inc.
Larry Page, Google Inc.
John Doerr, Kleiner Perkins Caufield & Byers
Ram Shriram, Sherpalo
John Hennessy, Stanford University
Paul Otellini, Intel
Shirley M. Tilghman, Princeton University
Ann Mather
4:6 OPERATING COMMITTEE


Eric Schmidt, Chairman of the Board

Larry Page, Co-Founder & Chief Executive Officer
Sergey Brin, Co-Founder & President, Technology
Nikesh Arora, President, Global Sales Operations and Business Development
Laszlo Bock, Vice President, People Operations
Shona L. Brown, Senior Vice President, Business Operations, Google Inc.
W. M. Coughran, Jr., Senior Vice President, Engineering
David C. Drummond, Senior Vice President, Corporate Development and
Chief Legal Officer
Alan Eustace, Senior Vice President, Engineering & Research
Urs Hlzle, Senior Vice President, Operations & Google Fellow
Jeff Huber, Senior Vice President, Engineering
Omid Kordestani, Senior Advisor, Office of the CEO and Founders
Patrick Pichette, Senior Vice President & Chief Financial Officer
Jonathan Rosenberg, Senior Vice President, Product Management
Rachel Whetstone, Vice President, Public Policy and Communications
Susan Wojcicki, Vice President, Product Management
SOURCE: (http://www.google.com/corporate/execs.html).
Another factor that is key to the quality of the personnel/staff that work in Google is
that Google had $209,624 in profit per employee in 2008, which beats all the other
large tech companies we looked at, including big hitters like Microsoft, Apple, Intel
and IBM (Pingdom, 2009). The data below illustrates the profit per employee in 2008
in US Dollars.

Source: (http://royal.pingdom.com/2009/05/14/congratulations-google-staff-210k-
in-profit-per-head-in-2008/)
This phenomenon is an incentive for any employee of Google to work very hard
because the figures are very motivating enough for gingered performance. Google
has been able to outperform the likes of Microsoft; Apple; and Yahoo who are
lagging far way behind. Googles staffs are intrinsically motivated to give of their best
and they are very much dedicated in the execution of their various assigned duties
and responsibilities.
Pingdom (2008) suggest that it is intriguing to imagine that the larger a company
gets, the more difficult it becomes to minimize overhead and costs. For instance, HP
and IBM, by far the largest companies listed here in terms of sheer size, have a
relatively low profit margin per employee. In that sense Microsoft is doing a very
good job considering that they are close to matching Google in spite of having 4.5
times as many employees. And of course, looking at overall profit for the company,
Microsoft is way ahead of every other company on this list. Below is a detailed data
of how the figure (graph) above was derived. For those interested, here is a table
with some more data, including the actual number of employees and the revenue
per employee. The list is sorted by profit per employee:

Revenue and profit per employee in 2008 (in USD)
Company Employees Revenue per employee Profit per employee
Google 20,164 1,080,914 209,624
Microsoft 91,000 663,956 194,297
Baidu 6,397 499,961 163,844
Apple 32,000 1,014,969 151,063
Cisco 66,129 597,922 121,762
Adobe 7,335 488,056 118,856
eBay 16,200 527,238 109,844
Intel 82,500 455,588 64,145
Oracle 86,657 258,837 63,711
Dell 76,500 798,706 32,392
Amazon 20,600 930,388 31,311
Yahoo 13,600 530,037 31,199
IBM 398,455 260,080 30,957
HP 321,000 368,735 25,947
Sun 33,556 413,637 12,010
SOURCE: (http://royal.pingdom.com/2009/05/14/congratulations-google-staff-210k-
in-profit-per-head-in-2008/)
4:6 CAPITAL BASE AND REVENUE STREAMS

Clark (2007) claims that 10 years after the establishment of Google in a Stanford
University hostel, the firm founded by two friends Sergey Brin and Larry Page has a
record capitalization of 105 billion overtaking Procter and Gamble and placing 5 th
on the US stock market. According to Clark (2007) only energy giants Exxon Mobil;
General Electric; Microsoft and the telecoms company AT&T are leading Google in
terms of market capitalization. Business Week (2006) asserted that Googles
innovation in search technology didnt make money until it started auctioning
advertisements that appear alongside the search results by users. Advertising today

accounts for 99% of the revenue of a company whose market capitalization now tops
$100 billion (Business Week, 2006). In a similar development, a research by Anil
Kamath, a technology officer of Efficient Frontier Inc. estimates that Google earns
about 30% more revenue per advertisement impression than Yahoo does (Business
Week, 2006). This has made Google have a comparative advantage over Yahoo and
its other major competitors. Also, Wakabayashi (2007) alleges that financial records
shows that Google derives almost all of its $10.6 billion in annual revenue for 2006
from advertising, while Microsoft's loss-making Internet arm generated $2.3 billion
in sales in 2006. Microsoft makes most of its money from its dominant Windows
operating system and Office software suite.
5:1 WEAKNESSES OF GOOGLE
Google gets at least 1,400 CVs/Resumes everyday and doing a simple calculation it
means that every year they have about approximately over half a million applicants
seeking to work in this prestigious organisation (Shiels, 2004). This is a headache of
the top corporate executives because it is very difficult to shortlist and chooses the
best candidates/applicants for various positions on offer.
More so, loyalty and dedication of their staff is another predicament for Google. In
May, 2008, Elliot Schrage, one of the senior executive at Google, left the
organisation to join the social network Facebook (Shiels, BBC News, 2008). Elliot was
head of global communications and public affairs; his departure was a series of top
executives exodus from Google to Facebook such as Sheryl Sandberg; Ben Ling;
Ethan Beard; and Gideon Yu. This movement of top staff shows a significant failure
of the very top executives to have a proper mechanism and strategy to sort out their
differences with other aggrieved senior staff. The fear is that these staff may reveal
trade secrets of Google to arch rivals in the information technology business and this
is an issue Google must contend with. According to Times Online (2008) Google
failed to give the usual $1000 present for Christmas but instead gave to all its
employees a version of the G1 mobile phone that was released in the same year

(2008). This was a motivational let-down of the employees because they were
expecting the cash.
Quinn (2009) pointed out that Google has developed an algorithm that helps the
management to pinpoint and speak to those who may be on the verge of departing
to be assigned new roles before they decide to leave. This development is ample
evidence to prove that the management of Google are not on top of their game,
therefore some of their staff feel under utilised, a situation that has compelled a
sizable number of them to leave to different firms. Google Inc. has suffered from
some high-profile exits to rivals including Twitter and AOL in recent months,
departures which may prove to be costly in terms of both time and money (Quinn,
2009). This weakness of Google is that there seems to be problems with the top
management in terms of its inability to hire or retain key people.
Also, Google hires a lot of contractors and some of them virtually does nothing
expect to waste the resources of the company. Farrell (2009) wrote that last year
Google said it was giving a large number of its 10,000 contractors their marching
orders to keep all the permanent staff in jobs in place as a result of a restructuring
exercise. Co-founder Sergey Brin was of the view that the 10,000 contractors were
too much and it was better to downsize the number. Thus, this was another proof to
show that planning of staff recruitment; job description; and job evaluation was not
properly and efficiently handled by Googles management.
An interesting comment by Scott (2006) concerns the fact that Google allows a lot of
pornography sites to be included on their search engine database which in his
opinion was a weakness. Scott (2006) again emphasized that Googles huge
weakness is their blind willingness and eagerness to include as many pages in the
index as possible because in actual fact only 2% of indexed pages need to be
indexed, the other 98% are crap and unnecessary.
The CEO of Google Eric Schmidt, hired in 2001 figured out how to monetize Google
by selling unobtrusive advertisements on related links (Economist, 2004). However,
there seems to be no barriers to entry for competitors and that the market for

search engine firms is becoming increasingly competitive with firms like MSN;
Mooter, and Yahoo all joining the search engine market.
6:1 OPPORTUNITIES AND COMPETITIVE ANALYSIS

There are many opportunities in the external environment for Google to exploit and
become more versatile in the market industry they operate. The ability to grasp and
implement the opportunities will place it in a very stable position far ahead of their
major competitors like Yahoo; Microsoft and Amazon. In addition, Wakabayashi
(2007) stated that Microsoft believes new Web services will work in tandem with
software installed on the computer, a vision that differs from "software as a service"
advocates who expect services delivered over the Web to eventually replace
software that resides on local PCs. This is indeed a great opportunity for Google to
expand and assert itself on the market because their new operating system to be
launched in the second half of 2010 is an upgrade of the Google Chrome.
According to the Liedtke (2009) If enough computer manufacturers embrace the

Chrome operating system, it could weaken Microsoft while opening up new avenues
for Google to persuade consumers and businesses to use its suite of online
applications and other Internet services, generating more opportunities for Google
to sell lucrative Internet ads. This will greatly be a great incentive for Google and a
disincentive for Microsoft because their operating system tagged Windows is quite
expensive due to the fact that it adds an extra cost to the purchase of a PC. If
Googles operating system is successfully launched, it will be a fierce challenge to
Microsoft who has enjoyed some kind of monopoly for more than two decades
without any formidable challenge by any firm. Similarly, Womack (2009) has said
that there was a possibility that the new OS can break the paradigm Microsoft and
Intel created over the past 20 years, This is indeed an ample indication that there is
plenty of business opportunity for Google in the information technology market.
Nevertheless, getting consumers and businesses to switch to computers powered by

a new operating system won't be easy, as Google has learned from the introduction
of Chrome (Liedtke, 2009). Google have been gradually trying its operating system

for Smart Phones and other mobile devices. This operating system is referred to as
Android and is a direct challenge to the ones by Microsoft Inc. and Apples Inc.
According to the Associated Press (2009) Google says about 30 million people are
using Chrome, a small fraction of the Web surfers who rely on Microsoft's market-
leading Internet Explorer. If all their marketing and operation strategies fall in place,
then Google will ultimately capture the market with its proposed operating system
next year. At the moment the worlds third largest PC manufacturer, Acer Inc. have
dropped Windows notebooks and replaced it with Android which in their opinion is
cost saving and at the same time will enable the PCs to run faster (Liedtke, 2009).
At the moment, Microsoft is not lying low with the perceived threat from arch
competitors Google; they have recently launched their new operating system called
Windows 7 to replace the Windows Vista which many analysts described as a failure
because of many defects and technical problems. Also, Associated Press (2009) claim
that Microsoft has been trying to thwart Google by investing billions of dollars to
improve its own Internet search and advertising systems. This fierce challenge and
competition between Google and Microsoft is indeed good news to consumers
because it will in the long term bring the prices of operating systems to an agreeable
level.
Shiels (2009) suggest that Googles Operating system to be tagged Chrome OS will be
a direct challenge to the market leader in operating system, Microsoft and its
Window system. The announcement by Google to launch its own version of the
operating system could dramatically change the market for operating systems,
especially for Microsoft, the biggest player with around 90% share (Shiels, 2009). In a
similar development, Reuters (2009) claimed that as part of its quest to attract users
to its Gmail service, Google has introduced dozens of features, including one that,
after a certain time, makes a user solve a Maths problem before sending an email,
giving them time to rethink it. Google makes money anytime an e-mail user clicks an
advertisement banner in their inbox; by enhancing their e-mail service to increase
their advertising market share, they hope to take away a significant chunk of the
market share away from Yahoo.

6:2 THREATS AND REACTIONS OF YAHOO, MICROSOFT AND AMAZON
Yahoo, Microsoft, and Amazon have all joined in a court suit to block the court
settlement of a 2005 copyright infringement class-action suit that would give Google
the right to digitize, host, and sell ads against millions of published works
(Myslewski, 2009). This is just a tiny bit of the threats faced by Google against their
major competitors. Google agreed to pay $125 million to settle the copyright
lawsuit. Microsoft filed a suit against Google in 2007 to stop the latter from Double
click merging. Yahoo also filed a suit in November, 2008 against Google for the latter
to abandon the attempts to overcome the objections of antitrust regulators. In
February, 2009, Sourcetool a B2B search engine filed an antitrust suit against Google
accusing it of upping it ads rates unfairly. Analysts in the information technology
industry allege that some of these suits are the works of Googles arch competitors
like Yahoo, Microsoft and Amazon. Gather (2004) claim that In January 2008,
Microsoft offered to buy Yahoo for $47.5 billion, but Yahoo demanded more money.
At the present, instead of buying Yahoo, Microsoft decided to partner with the
search engine in order to take on Google. Notwithstanding this agreement, Google
will remain the dominant force with a share of about 65% in the search ad market.
Other threats faced by Google are their inability to motivate their contract
employees spread all over the world. In December 2008, Google could not give cash
bonus to their contract staff members but gave them G1 cell phones. According to
Times Online (2008) the customized G1 devices will be given to all permanent
Google employees in the United States, Western and Central Europe, Canada,
Australia, Singapore and Japan, covering about 85 per cent of its 20,123 global staff.
The loss of the cash bonus is not the first blow for Google staff. The number of
restaurants on its campus open in the evening has already been cut.
Moreover, the credit crunch has generally slowed down the demand for gadgets.
According to Times Online (2008) Google's fellow residents of Silicon Valley have
been badly hit by the credit crunch. With consumer spending down, so, too, are sales
of gadgets. And, with the cost of credit so high, companies are cutting back as far as
they can on IT spending. Times Online (2008) estimated that 140,000 jobs have been

cut this year, according to Challenger, Grey & Christmas, the recruitment
consultancy, with the axe falling at groups such as Hewlett-Packard, Yahoo! and Sun
Microsystems.
In spite of all this gloom economic turbulence, Google is a long way from being in
trouble: it enjoyed turnover in excess of $21 billion (13.6 billion) during 2008.
However, quarter-on-quarter revenue growth, which hit 14 per cent last year, was
only 3 per cent in the three months to September 30, reflecting the slowing growth
rate of internet advertising (Times Online, 2008).
7:1 REFLECTIONS ON GOOGLES MISSION STATEMENT

Googles mission statement is To make the worlds information universally
accessible and useful. The company established more than a decade ago to a
greater extent seems to have achieved their mission statement in a variety of ways.
First, it has been able to dominate the internet as a search engine with more than
60% market share in 2008, outperforming Yahoo, Microsoft, AOL, and Ask.
Googles business strategy is not insane but in my opinion very smart indeed. They
aim to make access to any online and computer technology very accessible and free
so that through this kind gesture a lot of people will be attracted to their site. The
money they make will be the ads placed on their site because of their tremendous
popularity. With increasing competition in the business of information technology,
the best way to actually capture the hearts and minds of the consumers is to offer
them all the useful softwares they need to keep them loyal and that is what Google
have strategically being doing. Steve Ballmer, CEO of Microsoft to choose the alma
mater of the founders of Google, Larry Page and Sergey Brin to make that sweeping
statement that their strategy was insane was in my opinion very ridiculous.
Debatably, Google is currently enjoying a good turnover in excess of $21 billion

(13.6 billion) during 2008. However, quarter-on-quarter revenue growth, which hit
14 per cent last year, was only 3 per cent in the three months to September 30,
reflecting the slowing growth rate of internet advertising (Times Online, 2008). If this
is so, then it means the statement by Steve Ballmer is just a hollow talk with no
substance.

Googles ability to offer services which Microsoft charges quite a substantial amount
of money is indeed a reflection of how they have been able to position their
organisation to the needs of the masses. The launching of the Google Operating
System next year will be a direct and fierce challenge to the might of Microsoft in the
control of the operating system market.
Googles ability to provide a huge suite of internet services such as Google Maps;
Google Earth; Google Videos; Google Images; Google Calendar; Google Groups; and
Google Books have made them to be the leading corporate firm in the information
technology ahead of the likes of Yahoo and Microsoft.
7:2 APPRAISALS OF THE COMPANIES ACQUIRED BY GOOGLE

Google has made a couple of acquisitions in the more than ten years of their
existence. Since making their first acquisition of Deja Usenet in 2001 for strategic
purpose of getting data of about 500 million discussions of group postings, Google
have gone to acquire a lot of other companies. In 2006, Google made a high profile
purchase of the You Tube website for $1.65 billion, this was a strategic purchase
because You Tube was not actually making any profit, nevertheless the site was
visited by more than 100 million users and on average they watched about 55 videos
(Reuters, 2009). The acquisition of You Tube was to have access to the 100 million
users and strategically position Google. Google have also acquired companies such
as dMarc. In January 2006; followed by Upstartle a company which helped to
spearhead what is now referred to as Google Docs & Spreadsheets. By end of 2007,
Google had acquired four more companies namely Gapminder's Trendalyzer
software, Adscape Media, Picasa; Endoxon; Dodgeball; PeakStream Technologies
and DoubleClick - potentially their most lucrative acquisition to date (Meettheboss,
2009).

FIG: Some Logo of Companies acquired by Google

SOURCE: http://blogoscoped.com/archive/2008-02-25-n19.html
Chan (2007) suggest that Google executives mingle with other industry leaders and
insiders. This helps to keep them well-informed of their competition as well as
potential purchases. This therefore shows that there is no basis for the Microsoft
CEO, Steve Ballmer to suggest that Googles business strategy is insane. If not for
anything, it is innovative and has been able to win a lot of human traffic to their site.
Meettheboss (2009) asserted that In February 2003, Google acquired Pyra Labs,
owner of Blogger. This acquisition by Google secured the company's competitive
capability and ability to use information gleaned from blog postings to improve the
speed and significance of articles contained in a companion product to the search
engine. It was a strategic acquisition which helped Google to improve tremendously
on their search engine capabilities and prowess. Chan (2007) claims that Google to
determine the value of a company and whether it is a potential, acquisition
candidate. To estimate the value of a company Google can determine several
factors, among others, from their data:
size of the audience

growth rate of the company
current and potential competitors
potential investors
related technologies
Market potential.

It must be emphasised that from the above, that Googles business strategy is
not insane but rather they utilize an enhanced technological strategy to
undertake a massive data mining resource to ascertain the viability and
competitive advantage they may be derive from a targeted company before
making any investment decision.
7:3 GOOGLES BUILDING OF A SUSTAINABLE COMPETITIVE ADVANTAGE THROUGH

INNOVATIVE PROJECTS
Googles main agenda is that by undertaking innovative projects they are indirectly
advancing their strategic intent. Googles acquisition of companies is just to add
more value in terms of quality staff, more users, and more profits.
Lenssen (2009) suggest that the end goal of acquiring a company may be aligned
with Googles overall mission. Lenssen (2009) claimed that there is a link of their
mission statement and business strategy. He summarises as
grab all the worlds data,
make that data useful and accessible in order to direct user attention
towards it,
profit from ads displayed with the data.
Google by undertaking projects with other IT firms is tactically grabbing all the
worlds data and having it in their database for more accessibility. They in turn make
their profits by displaying the data with customised advertisements. The more users
click on the adverts: the more Google are making profits. Lenssen (2009) contends
that some companies sole reason of existence seems to be doing all they can to be
acquired by Google. He referred to these companies as trying to create Googlebait
wanting to be snapped up by Google.
7:4 GOOGLES RECRUITMENT STRATEGIES AND COMPANY CULTURE

Google maintains a recruitment strategy that makes it very attractive; conducive;
convenient; and lovely place to work. According to Hobson (2008) Liane Hornsey of
Google's human resources department told the website that the company is 'built on
trust.' Google endeavours to find the right calibre of people who can fit into the

companys culture. According to Hornsey, 'We try very hard to find the right people,
people who will fit in with the Google culture, because we believe that if you can
hire the right people, then everything else just flows from that,' Getting the right
people is very paramount to the success of any viable organisation including Google.
Google spend huge sums of money in getting the right calibre of people who can fit
into their organisational culture. Google gets at least 1,400 CVs/Resumes everyday
and doing a simple calculation it means that every year they have about
approximately over half a million applicants seeking to work in this prestigious
organisation (Shiels, 2004). Out of this 1,400 CVs and Resumes Googles HR have to
go through a lot of processes to choose the best people for the vacant positions in
the organisation. They need to ensure that those they select are loyal and dedicated
to the vision and ideals of the organisation because of the fear that these staff may
reveal trade secrets of Google to arch rivals in the information technology business
and this is an issue Google must contend with.
The cultural atmosphere at Google is very homely and serene where all kinds of
people from different ethnic backgrounds can work. They feel part of a team
focusing on achieving the goals of Google. Google embraces multi-cultural
employment opportunities and most of the people working in the firm come from
diverse ethnic backgrounds. All the staffs totalling more than 20,000 working at
Google believes that their efforts will add value to Google and they are very focused
and dedicated to their work. The people working in Google are encouraged to be
pioneering; innovative and be ingenious. Google have a policy that encourages their
engineers and other technicians to spend 20% of their work time on any interesting
project they think will add value to the firm. This innovative and creative policy has
enabled the engineers/technicians to create interesting services like Ad Sense;
Google News; and Google Mail. Googles head office in California, USA has been
labelled as Googolplex. This architectural masterpiece has been designed to make
the people who work in Google feel at home away from home. The atmosphere and
environment is very much conducive and convenient for all the staff because all the
facilities they need is available for them.

8:1 CONCLUSION
There is ample evidence to show that Googles business strategy is indeed realistic,
rationale, and viable and not as insane as claimed by Microsoft CEO, Steve Ballmer.
The company have shown that they are capable of dominating all the associated
businesses and activities on the internet. They have so far being aggressive in the
search engine industry and for now there is no formidable challenger. They have also
added more value to their brand name with all the strategic acquisitions they
embarked upon since 2001. Truly speaking, unless something dramatic occurs in the
realm of information technology; there is least probability that Google will collapse
or fail. Even if they were to fail, it will create a big catastrophe in the information
technology industry market which will be difficult to fulfil by any company. Googles
business strategy has been accepted worldwide by the masses through the
patronage of their services. The top management of the company headed by CEO
Eric Schmidt needs to be more proactive in their recruitment and retention
strategies so that expertise staff do not leave the firm to other arch rivals such as
Yahoo, Microsoft, and AOL. Gather (2009) sums up that Microsoft and Yahoo can try
everything, but the large majority of people around the world will always "google"
things, not "yahoo" or "bing" them, as Google has become a part of the language
and culture more than any other internet search engine. And this will always give
Google an upper hand in business because its strategy is indeed not insane.

REFERENCE

1. Associated Press (2009) Googles operating system escalates Microsoft duel

Available from: (http://www.physorg.com/news166247881.html) Accessed
on 12-11-2009
2. Bono, E. and Heller, R. (2005) SWOT: Assess the strengths, weaknesses,
opportunities and threats of your business with SWOT analysis. Available
from: (http://www.thinkingmanagers.com/management/strengths-
weaknesses.php) Accessed on 13-11-2009.
3. Business Week (2006) The Secret to Googles Success. Available from:
(http://www.businessweek.com/magazine/content/06_10/b3974071.htm)
Accessed on 12-11-2009.
4. Chaffey, D. (2007) Google case study-covering Google business strategy and
technology case. Available from: (http://www.davechaffey.com/E-
commerce-Internet-marketing-case-studies/Google-case-study/) Accessed on
12-11-2009.
5. Chan, J. (2007) Googles Acquisition Strategy Available from:
(http://fishtrain.com/2007/09/13/googles-acquisition-strategy/) Accessed on
12-11-2009
6. Clark, A. (2007) Google hits $219bn in success search. Available from:
(http://www.guardian.co.uk/technology/2007/nov/01/news.google)
Accessed on 12-11-2009
7. Dwivedi, J. (2008) Googles robust strategy and business model. Available
from: (http://www.iproceed.com/blog/2005/02/googles-robust-strategy-
business-model.html) Accessed on 12-11-2009.
8. Gather (2009) Microsoft and Yahoo in a war against Google. Available from:
(http://www.gather.com/viewArticle.action?articleId=281474977755129)
9. Google (2009) Technology Overview. Available from:
(http://www.google.com/corporate/tech.html) Accessed on 12-11-2009.
10. Hobson (2008) Googles recruitment strategy revealed Available from:
(http://www.get.hobsons.co.uk/news/Working/607) Accessed on 12-11-2009

11. Lenssen, P. (2009) Why Google Buys Companies. Available from:

(http://blogoscoped.com/archive/2008-02-25-n19.html) Accessed on 12-11-
2009.
12. Liedtke, M. (2009) Googles operating system escalates Microsoft duel
Available from: (http://www.physorg.com/news166247881.html) Accessed
on 12-11-2009
13. Meettheboss (2009) Google Acquisitions and Investments Available from:
(http://www.meettheboss.com/google-acquisitions-and-investments.html)
Available on 12-11-2009
14. Myslewski, R. (2009) Microsoft, Amazon, Yahoo! To join anti-Googlebook
war Available from:
(http://www.theregister.co.uk/2009/08/21/google_book_fight_heats_up/)
15. Nick, F. (2009) Google cuts staff. Available from:
(http://www.theinquirer.net/inquirer/news/1050285/google-cuts-staff)
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2009.
17. Pingdom (2009) Congratulations, Google staff: $210k in profit per head in
2008. Available from:
(http://royal.pingdom.com/2009/05/14/congratulations-google-staff-210k-
in-profit-per-head-in-2008/) Accessed on 12-11-2009.
18. Quinn, J. (2009) Google searches out unhappy staff. Available from:
(http://www.telegraph.co.uk/finance/5352086/Google-searches-out-
unhappy-staff.html) Accessed on 13-11-2009.
19. Reuters (2009) Google drives into navigation market. Available from:
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drives-into-navigation-market-1811289.html) Accessed on 13-11-2009

20. Reuters (2009) Google quietly declares email war on Yahoo. Available from:
(http://www.reuters.com/article/topNews/idUSTRE5130H920090204)
21. Scott, J. (2006) Googles weaknesses. Available from:
(http://www.v7n.com/forums/google-forum/30746-googles-
weaknesses.html) Accessed on 13-11-2009
22. Shiels, M. (2008) Google denies staff brain drain. BBC News, Thursday, 8th
May, 2008. Available from: (http://news.bbc.co.uk/1/hi/7389179.stm)
23. Shiels, M. (2009) Google to launch operating system. BBC News,
Wednesday, 8th July, 2009. Available from:
(http://news.bbc.co.uk/1/hi/technology/8139711.stm) Accessed on 12-11-
2009.
24. Stettinus, W., Robley Wood, D., Doyle, L., and Colley, Jnr. (2007) How to Plan
and Execute Strategy. McGraw-Hill., Maidenhead.
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(http://www.economist.com/printedition/displayStory.cfm?story_id=263042
2&source=login_payBarrier) Accessed on 13-11-2009.
26. Times Online (2008) Google cancels staff Christmas cash bonus. Available
from:
(http://technology.timesonline.co.uk/tol/news/tech_and_web/article539166
0.ece) Accessed on 13-11-2009.
27. Wakabayashi, D. (2007) Microsoft says Google success a wake-up call.
Available from:
(http://www.reuters.com/article/technologyNews/idUSN2738483020070227
) Accessed on 12-11-2009
28. Womack, B. (2009) Google to challenge Microsoft with Operating System.
Available from: (http://www.bloomberg.com/apps/news?pid=20601087)

APPENDIX
The history of Google
Back in January 1996 Google began as a research project for Larry Page, a PHD
student at Stanford, who was working on the Stanford Digital Library Project (SDLP).
It was his aim "to develop the enabling technologies for a single, integrated and
universal digital library." In his search for a dissertation theme, Page considered
exploring the mathematical properties of the web, understanding its link structure as
huge graph. His supervisor at the time, Terry Winograd encouraged him to pick up
this idea, and Page was later quoted as saying this was "the best advice I ever got."
With his research project, which was nicknamed 'BackRub', Page was soon joined by
close friend Sergey Brin, a fellow Stanford PHD student. Page's web crawler began
exploring the web in March 1996, setting out from Page's own Stanford home page
as a starting point. To convert the backlink data that it gathered into a measure of
importance for a given web page, Brin and Page developed the PageRank algorithm.
Analyzing BackRub's output - which, for a given URL, consisted of a list of backlinks
ranked by importance - it occurred to them that a search engine based on PageRank
would produce better results than existing techniques.
Originally, the search engine used the Stanford website, with the domain
google.stanford.edu. The domain of google.com was registered on 15 September
1997, and the company was formally incorporated on 4 September 1998. The name
of 'Google' originated from a mis-spelling of 'googol', which refers to the number
represented by a one followed by one-hundred zeros. August 1998 saw the first
funding for Google as a company when it received a US$100,000 contribution from
Andy Bechtolsheim, the co-founder of Sun Microsystems.
By the end of 1998, Google had an index of about 60 million pages. The homepage

may have still been marked 'BETA', but an article in Salon.com argued that Google's
search results were better than competitors such as Hotbot and Excite.com
In 1999, Google moved into their Mountain View headquarters, where they still
remain today. The Google search engine started to build a loyal following from those
that liked its simple design. By June 1999, a round of equity funding, which totaled
US$25 million had been announced.
2000 saw Google begin to sell advertisements based on keywords, which is known as
Google AdWords. The ads were text-based to maintain an uncluttered page design
and to maximize page loading speed. Keywords were sold based on a combination of
price bid and click-throughs, with bidding starting at $.05 per click. It wasn't until
Google started to offer AdWords, that it started to make any money.
As Google increased in size, it developed a long-term and well-documented rivalry
with software giant Microsoft. Great competition between both company's search
engines and applications soon arose and many Microsoft employees, recognizing the
innovation and cutting edge style of Google's operations, left Microsoft to join the
California-based company.
None of these were more notable than Kai-Fu Lee, a former vice-president of
Microsoft, who quit to join Google's operations in China back in 2005. Microsoft
tried to sue Lee, but the case was settled out of court in December of that year.
Google's growth and presence as a giant conglomerate continued with a further

acquisition in January 2006, following the purchase of the radio advertising
company, dMarc. In the same year, Google acquired Upstartle, a company
responsible for the online collaborative work processor, Writely and the technology
in this was combined with Google Spreadsheets to become what we now know
Google Docs & Spreadsheets.
In October 2006, the company announced that it had bought YouTube for US$1.65
billion. By the end of 2007 the company had acquired four more companies,
Gapminder's Trendalyzer software, Adscape Media, PeakStream Technologies and
DoubleClick - potentially their most lucrative acquisition to date.

Page and Brin are currently ranked 26th on the Forbes list of the world's billionaires.
They are the 6th richest people in America. Not bad for something that started out a
side project. Meanwhile, as a company, Google simply continues to grow, expand,
develop and dominate
SOURCE: ( http://www.meettheboss.com/google-acquisitions-and-
investments.html)
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GOOGLE'S BUSINESS STRATEGY 2

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BY: KWAKU F. DARKWAH

GOOGLES BUSINESS STRATEGY:

BY: KWAKU F. DARKWAH

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THIS ARTICLE IS DEDICATED TO

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Chapter Title Page

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1:2 HISTORICAL PERSPECTIVE AND ORIGINS

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2:1 PRODUCTS OF GOOGLE

2:2 GOOGLES FINANCIAL STATUS TO DATE

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3:1 INSIGHTS INTO GOOGLES PEOPLE AND CULTURE

3:2 BUSINESS MODEL OF GOOGLE

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Fig: Google technical architecture

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4: 1 INTRODUCTION OF SWOT ANALYSIS

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4:2 GOOGLES MARKETS

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4:3 KEY TECHNOLOGIES OF GOOGLE

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1. The web server sends the query to the

2. The query travels to the doc

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FIG: THE LIFE SPAN/ CYCLE OF A GOOGLE QUERY

4:4 QUALITY OF PERSONNEL

4:5 BOARD OF DIRECTORS

Eric Schmidt, Google Inc.

4:6 OPERATING COMMITTEE

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Eric Schmidt, Chairman of the Board

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Revenue and profit per employee in 2008 (in USD)

Company Employees Revenue per employee Profit per employee

Google 20,164 1,080,914 209,624

Microsoft 91,000 663,956 194,297

Baidu 6,397 499,961 163,844

Apple 32,000 1,014,969 151,063

Cisco 66,129 597,922 121,762

Adobe 7,335 488,056 118,856

eBay 16,200 527,238 109,844

Intel 82,500 455,588 64,145

Oracle 86,657 258,837 63,711

Dell 76,500 798,706 32,392

Amazon 20,600 930,388 31,311

Google's Business Strategy 2

Google's Business Strategy 2