In 1996 two computer knowledge PhD students at Stanford College or university, Sergey Brin and Larry Web page, were wondering the way they could sort through the massive amount of information that was beginning to appear on the net to find specific and useful information on a topic. Although there were several different solutions, or se's, available to search the net for information, do not require seemed particularly beneficial to Brin and Web page because they failed to separate between useful and trivial Sites. Brin and Web page decided to develop a search engine that not only would look at the words on Web pages and then index them as other search engines did, but also would take a look at how and where these words were being used with the number of other Web sites linked to a page. The target was to really have the search engine gain a list of Web pages with the most useful appearing at the very top.
The name "Google" originated from a misspelling of "googol" which identifies the number displayed by a 1 followed by one-hundred zeros. Having found its way ever more into everyday dialect, the verb, "google, " was put into the Oxford English Dictionary in 2006, so this means, "to utilize the Google internet search engine to obtain information on the Internet. "
By December 1998 the beta version of Google's internet search engine had been up and running at the Web for months, responding to over 10, 000 search inquiries a day. From that point on development was exponential. By December 2000 Google's index included more than 1. 3 billion Webpages, and the company was responding to some 60 million search queries per day. By 2004 the number of Webpages indexed by Yahoo exceeded 4 billion, and the search engine was managing more than 300 million concerns every day. Google's technology quickly became pervasive. Soon most major Web portals were using Google's internet search engine technology, including AOL. Yahoo also agreed upon an contract to make Yahoo its default search professional, which helped make Google the largest google search on the net. Estimates suggested that in 2003 some 75 percent of Internet queries were made using Google.
What was most impressive about Yahoo, however, was that unlike many other dot-com businesses of the 1990s, Yahoo found ways to make money. Google generated earnings from only two resources: (1) the licensing fees it priced to provide search functions to corporations, other Internet sites, and wireless cell phone companies, and (2) the advertising fees it recharged for providing highly targeted text-only sponsor links adjacent to its search results.
The Google search engine attracted a devoted following among the growing volume of Internet users, who liked its simple design. In 2000, Yahoo began selling advertisements associated with search keywords, which provided the business with an additional earnings source beyond fees for licensing its search device to other Internet sites. To generate profits Google markets to advertisers the words that people put in when they seek out something on the net. Thus means that whoever bids the most for a specific term, say digital cameras, gets their hyperlink put near the top of a Google-generated list. Google distinguishes between independent search results and those that are paid for by list "sponsored links" on its web page. However, sponsors do not pay Yahoo unless a user clicks to them from a Google-generated hyperlink.
The advertisements were text-based to keep an uncluttered page design and to maximize page launching speed. Keywords were sold based on a blend of price bid and click-throughs, with bidding starting at $. 05 per click. Advertisers don't just pay a place rate, or perhaps a cost per thousand visitors. They bet on the search term. A lot more an advertiser is happy to pay, the bigger its advertisement will be placed. If the advertisement doesn't get clicks, its list will decline as time passes, it doesn't matter how much has been bid. If an advertisement is persistently irrelevant, Google will take it off: It isn't working for the advertiser, it's not serving users, and it's really taking on server capacity. Yahoo understands that its two most significant assets are the attention and trust of its users. If it requires too long to provide results or yet another word of content material on the home site is too distracting, Google risks shedding people's attention. When the serp's are lousy, or if they are compromised by advertising, it perils burning off people's trust. Attention and trust are sacrosanct. Yahoo pursues a apparently gratuitous quest for velocity: Four years back, the average search took about 3 seconds. Now it's down to about 0. 2 seconds. And since 0. 2 is more than zero, it's not quite fast enough.
Page and Brin insisted that the business would only sell discreet wording ads put near serp's and never merge paid keyword-based advertising with legitimate serp's even though the practice was standard among internet search engine companies. Also, Google wouldn't normally place banner advertisings on its Web site, now would it sell pop-up ads.
While a lot of its dot-com rivals failed in the new Internet market place, Google quietly increased in stature while generating earnings. In 2003 the company made $967 million in income and $105 million in world wide web gains. In 2004 profits surged to $3. 19 billion and net gain to $399 million.
Google - Founded by Geeks and Run by Geeks
Google can be an company founded by geeks and run by geeks. Regarding to Stephen Arnold, Google's developers are 50%-100% more beneficial compared to programmers working for their rivals. He established this theory on Google's competitors needing to spend up to four times the maximum amount of just to continue.
It is a assortment of 650 really smart folks who are almost frighteningly single-minded. "They are people who think they are creating something that is the best in the earth, " says Peter Norvig, a Google anatomist director. "And that product is changing people's lives. "
Geeks are different from the rest of us, so it's no real surprise that they've created a different sort of company. Google is, in fact, their wish house. In addition, it happens to be among the list of best-run companies in the technology sector. At a moment when a lot of business has resigned itself to the pursuit of sameness and safe practices, Google proposes an almost joyous antidote to mediocrity, a model for smart invention in challenging times.
Google spends more time on hiring than on anything else. It does know this because, like any bunch of obsessive designers, it keeps keep track of. It says it gets 1, 500 rtotals a day from wanna-be Googlers. Between verification, interviewing, and assessing, it spent 87 Yahoo people-hours in each one of the 300 or so individuals who it chosen in 2002.
Google hires two sorts of engineers, both aimed at encouraging the art of fast failing. First, it searches for young risk takers. "We look for smart, " says Wayne Rosing, who minds Google's engineering rates. "Smart just as, do they do something weird outside of work, something off of the beaten avenue? That translates into people who have no fear of trying difficult projects and going beyond your bounds of what they know. "
But Google also hires actors, PhDs from top computer-science programs and research labs. "They have continually managed to hire 90% of the best search-engine people in the world, " says Brian Davison, a Lehigh University assistant professor and a top search expert himself. The PhDs are Google's id. They are the people who know enough to blast slots in ideas before each goes too far -- to make the failures happen faster.
Google developed a decentralized management schema where employees report directly to multiple professionals and team job leaders. This enables for the duty of the technology department to be shared amongst multiple senior level technical engineers and removes the need for a singular department head to oversee the activities of the section. This is a unique strategy from the standard management style.
The challenge is negotiating the strain between risk and extreme caution. When Rosing began at Yahoo in 2001, "we'd management in executive. And the framework was tending to notify people, No, you can't do this. " So Yahoo got rid of the managers. Now most technicians work in groups of three, with task leadership revolving among team members. If something isn't right, even if it's in a product that has already gone public, clubs correct it without asking anyone.
"For a while, " Rosing says, "I had developed 160 direct reports. No professionals. It worked because the teams knew what they had to do. That arranged a cultural bit in people's mind: You are the boss. Don't wait to take the hill. Don't wait around to be managed. " If you fail, fine. To the next idea. "There's faith here in the power of smart, well-motivated visitors to do the right thing, " Rosing says.
Google doesn't market itself in the original sense. Instead, it observes, and it listens. It obsesses over search-traffic information, and it reads its email. Actually, 10 full-time employees do nothing but read messages from users, distributing these to the appropriate colleagues or giving an answer to them themselves. "Nearly everyone has usage of user reviews, " says Monika Henzinger, Google's director of research. "Most of us know what the situation areas are, where users are complaining. "
Google concentrates relentlessly on the grade of the knowledge. Make it easy. Make it fast. Make it happen. And attack exactly what gets in the form of perfection.
How does Google keep innovating?
Google also is aware of the capability of the net to leverage expertise. Its product-engineering work is more like an ongoing, all-hands discussion. The website features about 10 technologies in development, a lot of which might never be products by itself. They is there because Google would like to see how people behave. It wants feedback and ideas. Having people in on the overall game who know a lot of stuff tells you earlier whether guidelines are guidelines that will in actuality work.
One big factor is the business's willingness to fail. Google technical engineers are absolve to experiment with new features and new services and free to do so in public areas. The company frequently posts early on variants of new features on the webpage and waits for its users to behave. "We can not predict just what may happen, " says older engineer Nelson Minar.
Frequently, new Yahoo enhancements or products come in its inventory. Google Labs, the experimental portion of Google. com, helps Google maximize its interactions using its users by including them in the beta development, design and screening stages of new products and enhancements of already existing ones.
Google's Competitive Position and Strategy to Sustain Growth
Google's ability to support its strong position among Search on the internet companies was a function of its capacity maintains strong romantic relationships with Internet users, advertisers, and Internet sites. Google has a distinctive technology benefit over Microsoft, eBay, Amazon, Yahoo. Yahoo utilizes custom high-performance systems which can be cost efficient because they can scale to extreme workloads. This hardware permits a huge cost edge over its competitors.
In 2005, Internet users searching for information visited Google more often than to any other site with search capacities. There was little or nothing that would prevent Internet users from abandoning Google to use a better search technology. However, the introduction of a better search engine by a competitor may lead to swift erosion of advertising revenues for Google. Google management presumed its primary competition were Yahoo! and Microsoft.
In August 2004 Google went public, bringing up over $1. 5 billion. Without credit debt and flush with cash, the company looked established to build on its lead in the internet search engine business. However, rivals were not sitting on the sidelines. In 2003 Yahoo! purchased a rival internet search engine company. Overture Services and replaced Yahoo as the search engine on its site with a proprietary search engoine based on Overture's technology. Microsoft too seems to have its sights placed on Google. Microsoft is reportedly working on its own search engine technology, which it projects to integrate with its software.
In Feb 2003, Google acquired Pyra Labs, owner of Blogger, a pioneering and leading blog hosting website. Some analysts considered the acquisition inconsistent with Google's business model. However, the acquisition guaranteed the company's capability to use information gleaned from blog postings to improve the acceleration and relevance of articles contained in a companion product to the search engine, Google News. Yahoo also purchased YouTube, JotSpot (a corporation that helped pioneer the marketplace for collaborative, web-based business software), Gapminder's Trendalyzer software (an organization that specializes in developing it for provision of free statistics in new aesthetic and animated), Adscape Media (a little in-game advertising company). In 2007, Google also bought PeakStream Technology.
In 2004, Google became more involved in the Chinese language market when it attained a 2. 6 percent stake in Baidu - the main search engine in China. Google believed it was necessary to develop a local occurrence in China if it were to aggressively pursue search-based advertising customers for the reason that market because the Chinese language was so complicated. In late 2005, Google was continue with its strategy in China by recruiting employees for an office positioned in China, creating a separate brand name for the Chinese market, and introducing a Chinese ". cn" site. Google management also exposed an operation centre in Brazil and Mexico in late 2005 to boost sales and services to Latin American advertisers.
While the business's major market is in the web content arena, Yahoo has also recently began to experiment with other marketplaces, such as radio and print publications. On January 17, 2006, Google announced that it got purchased the radio advertising company dMarc, which gives an robotic system that allows companies to advertise on the radio. This will allow Google to incorporate two advertising media-the Internet and radio-with Google's potential to laser-focus on the likes of consumers. Google has also begun an test in selling advertisements from its advertisers in offline papers and newspapers, with select advertisements in the Chicago Sun-Times. They have been filling up unsold space in the newspapers that would have normally been used for in-house advertisements.
Over the span of the past ten years, Google has become quite nicely known for its commercial culture and innovative, clean products, and has had a major impact on online culture.
What will be the sources of Google's competitive advantage? (Inside your answer identify and make clear Google's distinctive competencies)
What value will Google create for customers and marketers?
Apply the four building blocks of competitive edge to Google. Analyse each factor by providing detailed instances from the situation.
What business-level strategy is Google chasing? (Identify the strategy and justify your answer).
What corporate-level strategy and international strategy has Google applied? (Identify the relevant strategies and justify your answer).
1. What are the resources of Google's competitive benefit? (Within your answer identify and describe Google's distinctive competencies)
Ans-First we need to explain what competitive benefit is. Competitive advantage
Can be thought as the advantage a firm has over other organizations with respect to product offerings, Cost composition, distribution and customer care. This allows the firm to create high revenues or margins as well as larger customer base than it's rivals.
Competitive advantages are mainly of two types. 1) Comparative gain 2) Differential gain.
1) Comparative advantage- Comparative benefits is also called as cost benefit. This is the organization's capacity to produce goods or services at a lower cost than its competitor's price. 2) Differential benefit- Differential gain is the firm's ability to differ from products or services from it's competitors and are perceived as better than it's competitors.
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