Google Company - Research Paper Example

TABLE OF CONTENTS References 23 Executive Summary Google Company is a leading universal technology-based organization that is focused on improving the ways people get in touch with information and it maintains an index of websites and other content, and makes the information freely obtainable to anyone with an Internet connection. People are able to get instant information online through the automated search technology of the company. Google is one of the most recognized companies in the entire world because its website is a top internet destination, its innovative web search instruments and its advertising. Google’s headquarter is in California in Mountain View and it employs approximately 16800 people. Google Company, which is one of the principal internet search engines globally, specializes in advertising services and internet search engines. The company operates in among other countries, the United States of America and UK. The services and products of Google Company are free of charge and they are mainly offered through Google.com and its one hundred and sixty other international domains, such as Google.dm, Google.ba, Google.co.jp, Google.nr, and Google.ca. The interface of Google is available in more than one hundred and seventeen languages. Considering the strengths, opportunities, threats and weaknesses, it is sure that Google has a bright future. The company has a great potential for serious growth and can achieve unprecedented profits under good leadership. Google’s Business Environment Google’s history dates back to the mid 1990s when Stanford University PhD students Larry Page and Sergey Brin collaborated to develop technology for a search engine. Page and Brin began collaboration on a search engine known as BackRub in 1996. Two years later, Page and Brin raised $1 million in funding from venture firms and private investors to start Google1. Google Company was incorporated in 1998, where at first; it answered 10,000 search queries daily. PC Magazine in 98 named Google one of the top 100 search engines and websites. In the beginning of 1999, Google Company moved its headquarters to University Avenue in, California; Palo Alto. Google grew steadily to a point of covering over 75% of United States web search market by 20042. Though Google is the leading player in internet search market, it has to contend with its rivals in the field where there is no long time entry barrier. In consideration of the company’s remarkable records, economic performance and tremendous growth over the year, it is no doubt that Google faces a myriad of challenges; much like it has numerous opportunities. Yet again, globalization of economies and markets has caused several ripples that has affected or somehow impacted the firm’s performance. This paper seeks to analyze Google’s market condition with specific bias on the company’s strengths, weaknesses, opportunities and threats. Based on the company’s business environment, a number of recommendations will be made. Strengths of Google Company In analyzing a company, business or organization, some of the aspects to consider include its strengths and weaknesses3. Google’s search engine is known to be user friendly, impartial, democratic (bringing all types of information to the web including entire books), and helpful. The company does its best to analyze the entire internet to locate the most relevant information for users, and has an exceptional public image. Users tend to perceive Google’s search engine and other web-based products as empowering; people often trust that the engines are acting in their best interests, and are obliged to have access to them4. Furthermore, since there are many search engines to choose from including Google, Lcos, Yahoo, AOL, MSN, Dogpile, and others, users are empowered with information in considering that in the “democracy” of free enterprise and capitalism, they can ditch one organization and camp in another relevant search engine if the first one’s results are not satisfactory. There is certainly some truth to users’ faith in Google search engines considering the quality of service that it offers to its clients. Google Company has managed to build a reputation on customer service and innovation, thus an advantage Google has over Microsoft is the positive perception of the public. The headquarters of the company - the Googleplex - is also famous for its unique offices and amenities. The position of Google one website currently is unshakable. Google held 76% advertisement market of the search engine in the third quarter of 20085. Gmail, which is Google's Web-based e-mail, grew by 43% between 2007and 2008 according to the company’s official records. Besides its search engine, Google provides consumers online productivity software, photo and video sharing services and mapping applications6. Even though Google supports offline applications through its Google Gears product, it doesn't produce a lot of desktop applications. Google will have an advantage if consumers begin to buy inexpensive machines with limited processing power, because nearly all of its products are Web services. To access Google’s services, the only piece of software you require is a Web browser. Google introduced its own browser in the year 2008 called Google Chrome. Chrome might be the first step towards a Web-based operating system7. The strengths of Google Company that has made it attain its current position in the entire world are quite a number and can be summarized into the following; Google’s reputation and familiarity, Google’s speed and user friendliness, its high relevance ranking based on citation and multi-disciplinarity. The finer details or aspects are as outlined below. It is already the number one search engine; it is fast, dependable and reliable. The company has also established a brand name in which its users trust. These qualities have made many people prefer the Google Company as opposed to the other companies that offer similar services8. Considering that knowledge is power, Google has hired PhD holders to continuously work hard in order to improve search algorithms and make searching efficient, faster and relevant. Google offers search engine services known as “search by location” where users can get results showing products, vendors and services near their areas of stay or operation. In addition, Google also has made a simple human-machine interface which enable users to use the system without much trouble and hustle. The operation costs incurred by Google are considerably low and this makes it offer similarly affordable services to users. The fact that it provides an interface in 88 languages has made it comfortable to use across the entire globe9. Google uses the art search technology to index pages regularly and hence it gives the most updated results to users; it also ranks its web pages and weighs the votes with its page rank technology to give its users access to the very important pages first. It has also devised solutions for wireless handle devices, personalized toolbars, and catalogues which add essence and strength to its services. Others of its strengths include the following. Google is fair to advertisers since it clearly separates relevant advertisements and real results by giving “Sponsored Links” tag to sponsored outcome when user searches to get information with some keyword. Furthermore, it also ranks sponsored links to keep nearly all relevant sponsored links on the top10; Google also has a wide range of innovative services like groups, images, news and directories. The company has not complicated its site by making itself a portal; but instead keeps tabs for these services on its homepage so users can easily navigate. This and that also keeps the website as simple as it was earlier; Google quickly routes its users to the WebPages and lingers not for ad revenue11. Google Company also enjoys quite a number of other advantages. These are outlined in the following sections. Google’s Competitive Advantages Google's work force is not limited to their PhDs and other talented employees in Mountain View, Dublin and New York. SEOs from all around the world can be regarded a free labor force for Google. SEOs optimize their sites according to the rules of Google by registering their sitemaps and ping Google's services whenever a new page is created in order to get their sites promoted on the world's number one search engine. Hence, Google has a huge advantage over the other search engines, since other engines cannot recieve the same level of feedback. Google also caters for this crowd very well as it offers SEO friendly advice and tools12. The company has customized some of its services including Google Co-op in which customers are able to create search engines while at the same time giving it domain-specific information which is very important for its continued success. In addition, by tagging images on Picas and Image Labeler, people help perfect Google's Image Search. Back in 2004, Google made an extremely smart decision when it bought Urchin and converted it into a free traffic analysis add-on (Google Analytics) for use by website and blog owners. These days many sites use this add-on to get an improved understanding of their traffic. However, the effect of this tool is that it potentially gives Google access to significant data about websites13. Google no longer needs to compute page ranks; if all websites had Urchin installed, the company would enjoy having the most reliable access to site popularity compared to other search engine service providers. Apparently, not all sites use Google Analytics, but still it is not an unimportant amount that do. FeedBurner recently acquired serve the same purpose as well. It is a great advertising channel for Google and another way of measuring site popularity. Google Docs, Gmail, Google Toolbar and others give clues about people’s interests, likes, personality, and dislikes14. As a result, there are more personalized search results, for example: if one is that kind of person who searches for programming info in Googlze Search, visit Freshmeat and Sourceforge all day, discuss KDE's latest bugs on GTalk and Gmail and long with Google Toolbar-powered Firefox, then Google will not consider Tomcat, Python, Apache queries as zoological, but program related. Apart from crawl the blogosphere, Web, press releases and books, Google also crawls the real world with Google Earth. Also, Google Map's Street View lets you drive around big cities like San Francisco and New York from your browser. With Universal Search now, one can reach all of such services with a simple Google search. Google being a commonly discussed subject makes one think that it is indispensable. Psychologically, one feels that they lack it when they try other search engines. For example, if one’s aim is more about researching than finding, then they always want to try their search on Google as well, even if they were already contented with other results elsewhere. If one decides to switch search engines, one will possibly face the following obstacles: If a person uses Gmail, they always have Google on their mind; If one goes to CNN.com, they have Google in the toolbar; so why bother entering a new URL to search for the site If one uses Opera, Firefox or Safari, then Google is remains the default search provider, home page and feed subscriber. Currently, Google's market valuation is more than 150 Billion USD. They have lots of cash reserves and their profit margins are very high. That is to say, Google Company is financially healthy and it has the power to create new and innovative products developed; just as they did with Kaltix, FeedBurner, and Urchin. Weaknesses of Google The first and most interesting threat of Google is with respect to its talent retention level. The company has lost some of its highly qualified and talented employees. For example, Tim Armstrong, the company’s former Vice president resigned and joined AOL as CEO for AOL. In addition, there is a close tie between stock options and salaries for the top management employees of Google which is a cause for concern in today’s global market. Google’s App Engine at times suffers from increased data access latency and errors15. The following are some areas where Google has serious weaknesses A) AdWords and AdSense Even though Google's greatest strength and biggest revenue driver which is to the tune of 99% is its advertising scheme, Google’s contextual ads are also the company’s greatest weakness16. Made-for-AdSsense site creators and spammers are continuously gaming Google's system through the practice known as click fraud. Some publishers of AdSense note that the company’s black box algorithms ensure that the company can bilk advertisers for millions. B) Overreaching Although Google managed to score a home run with text-based advertising, its subsequent efforts at monetizing content have short of expectations fallen. The project of Google Company to sell ads in magazines floundered although the company has recently doubled its efforts and is selling ad space in newspapers. The company’s success in these offline efforts depend on its ability to sell to scale, whether across the media or in one medium. The technology, however, is unproven and no guarantee exists that the company will effectively target consumers with ads in offline environments. The organization may also face greater risk as it struggles to cut a niche among established players or companies that specialize in a single medium and/or market. C) Copyright In some cases, Google relies on exploiting content that belong to third parties according to some media companies17. Media companies that enjoy greater attention like HarperCollins, Agent France Presse, Mark Cuban and Howard Stern are expressing their frustration through lawsuits and Google admitted its vulnerability in a recent SEC filing. D) Mobile Carriers Google Company is moving aggressively into the mobile phone market where the company's strategy provides helpful mobile versions of its applications while helping carriers sell bigger data plans and handsets. Google, the advertisers, and carriers will all share the revenue earned from the ad18. But the carriers, who are already dissatisfied with the net neutrality laws, may not assent to being just other channels for Google's wares. E) User Experience Maybe the least of Google's worries, but a worry nevertheless, is how to make applications that lay users comprehend and actually use. Some of the company’s products, like Maps, News, and Gmail, are very successful. Others like Google Reader, Google Video and Google Talk have faced utilization challenges. This ideally means that many of company’s products go unnoticed by the general public who are often targeted by the company. Part of the company’s undoing is its focus on solving engineering problems and not user problems. An example is Google Video's link within a video feature. The feature is useful one knows about it and wants to physically change a URL but it has low accessibility. It also follows that Google is too independent on search-based advertising with 99% of its revenues coming from advertisements that are related to searches. The remaining one percent comes from sales of its enterprise search appliance. Many spammers have managed and still manipulate the Company’s ranking technology by creating dummy sites with numerous links to pages that they wanted the company to rank highly. In addition, the company’s contextual search algorithms are not 100 percent perfect and many a time mistakes are made by them. Yet again, the company’s ranking and Cost Per Click advertising charging policies are confusing and makes it difficult for those interested in marketing their products to predict how much their adverts would cost and their potential positioning. This means that the Company’s link-based ranking seemingly employs no definite traffic analysis. The company’s has a complex business model that depends on both market portal and google.com for its revenue. Other weaknesses are as follows; Google company does not have stickers like Yahoo And MSN have which can attract users; Google’s localized search algorithms sometimes result in errors due to automated indexing; Google company lacks a highly personalized search by which it could charge users with switching cost if they decide to leave Google’s services; Even though Google is a dominating player among search engine websites, only 50 to 65 percent of web search queries are answered correctly by it; Marketers perceived Google’s contextual advertising to be less effective in generating sales for the reason that visitors to web pages showing editorial content were less likely than searchers to be ready to buy. Opportunities for Google Company Google still has a lot of opportunities to exploit according to Richard19. Some of these opportunities include advertising partnership with Yahoo. Google engineers are encouraged to spend 20% of their work time (one day per week) on projects that interest them which means that they have the opportunity to create new and more innovative products. The company may also venture into experimental partnerships with radio and print media if its management and owners so wish given its insurmountable potential. Acquisitions of   businesses (YouTube, DoubleClick); online video increasing; other partnerships (AOL Time Warner, NASA, News. Corp.); increase in online advertising; 1,300 résumés a day; Froogle.com / Google Product Search - endless is the list20. Some opportunities to consider are outlined below; Google company may consider becoming a mass-market portal the same way as MSN and Yahoo, and may heighten slightly its switching costs Google can increase switching costs by tracking users’ search histories with their permission and could remind users through emails for the relevant search updates as per their personal interest; It can also merge with at least one established mass-market portal to lock in huge numbers of users and advertisers; Google can enhance personalized and localized searching and can also add localized paid listings of advertisers; Google can add “stickies” like chat rooms and email systems to attract users and survive in tough competition; Google can start new services such as multimedia, product search, private database, and print media; The company can start giving full fledged services on hand held mobile devices to capture markets beyond the internet; With a Google wave, below are promising opportunities for and around the company. Migration Tools and Services If wave were a better option, a considerable number of users of Notes, SharePoint, and even Outlook Exchange would be wooed to switch, either wholly or partly. Third parties could enable companies to port their emails, existing data and documents into Google wave by providing services and tools. Enterprise Wave Wave being an open source, Google could add task lists, mobile-synchronize and group calendar and sell an enterprise version of wave newly branded. The way to make organization switch to Google wave is to make it adequately full featured for enterprise use. This is a billion-dollar opportunity that Google is yet to exploit. Extensions There are sufficient extensions, plugins, and add-ins to Microsoft Outlook. ClearContext, Xobni, Gwabbit and a number of helpers that one can remove duplicate contacts, schedule emails, and extract attachments. Some of these tools are highly money-spinning paid extensions and it is conceivable that one could build and charge for extensions that add useful features to Google Wave. Threats that Google Faces Google Company is faced with some threats. Some of these include: 1. Existing Search Competitors Some competitors of Google Incorporated such as Ask, Microsoft, and Yahoo have managed to overtake Google's relevance and mindshare through better branding or higher quality results and emotional appeal21. Search competitors like Baidu and Yandex; the market winners in China and Russia, respectively are also potential threats to the as other markets become more important players in the world economy. 2. Web Search Fractures into Verticals It is very possible that with the increase in complexity of the web, there is a likelihood that that web searching and web surfing habits will evolve with users not necessarily turning to Google but to other brands such as Zillow, Expedia and iMedix. 3. Spam Google Company might be affected by irrelevancy because technological manipulation and spam. Indeed, the cat and mouse game Google Company has waged with black hats over the years have produced occasional PR nightmare and a lot of poor search experiences. 4. Startup Companies Startups like Mahalo, Cuill, Powerset and Wikia projects could easily become major market players primarily due to the brave capitalists behind them. With better technology, media loving adoration, and a grasp of what the Internet population wants, Startup companies can give the organization a challenge of a kind. This could even happen when the startups get acquired by other major companies including those traditionally outside of web search like IBM or Nokia and then begin their meteoric rise. 5. Introduction of more compelling information retrieval systems A Proper paradigm shift in the way computer interaction functions might spur a revolution against text-based Google and into the next generation of Internet use, powered by a totally different kind of entity; a person or party who may not be Google's direct or current competitor. Other threats include; Google’s confusing charging policy and Cost Per Click ranking could disappoint its advertisers and company might begin loosing many of them22; The organization could loose considerable revenues if the contracts it signed with other portals, that it partially depends on, like AOL get terminated; Since there is no long time entry barrier in such business, many competitors can emerge in the coming years with same services, better names and interface and can catch up Google’s market23; Competition and rivalry: i. MSN’s new operating system labeled “Longhorn” which is expected to have an implicit query feature. The operating system will be able to search emails, hard drive files, blogs, news sources, attachments and websites from a keyword search without the need for a web browser. A user will be able to search directly from already established Microsoft programs like MS word. Such innovation would handcuff users and it would eventually harm Google’s market; ii. Google would start loosing some of its users its major competitors like Yahoo simply because they provide better services and solutions than Google iii. Overture, Google’s old competitor is a threat. Though Google has acquitted more advertisers than Overture, Google’s share of market revenue lags behind overture by 20percent and there is always competition for getting collaboration with the well known mass-market portals like MSN, AOL and Yahoo. If Google Company decides to go for highly personalized search for which it has to capture user’s personal information, it can get trapped in issues regarding piracy24; Google’s scale may also become a liability in order to cop up with new and enhanced search techniques if the company’s ability to modify its database architecture and algorithms was constrained by its server infrastructure and the size of its index; Google Company will start loosing its well earned brand name if it decides to merge with some already established mass-market portal; Recommendations Google is a major player in the internet industry with a well established ability. Though faced with some challenges and weaknesses, if it addresses them appropriately it will remain a search engine to watch. There is still room for improvement as other players in industry also have opportunity to exploit and outdo Google. It all depends on giving users the best of the best and the portal that will get to that and uphold substance in offering needed services will have the confidence of users. From the analysis conducted in the previous sections, it is beyond doubt that Google has great potential for growth and expansion; both in terms of revenues and global presence. However, on the other hand, it could lose a significant market share if it loses focus and ventures in grounds that are of higher risk; those that have better established players such as print media, radio and television. The following section outlines the possible ventures that the company may invest in order to capture new markets, and make more revenues. As shall be noticed, some of the following recommendations outlined below require collaboration with current (and even future) competitors. However, it must be considered that times have changed and such collaborations should be welcomed as long as they are geared towards achieving specific and combined goals with both or all parties gaining mutually from the contractual relationships. Some of the recommendations that may help align the business towards faster growth are here below outlined. Google Company should start considering offering new, innovative or improved services like instant messaging, print, travel, multimedia, mail in order to contain some its competitors like MSN and Yahoo, without shifting from its simplicity and comprehensiveness. The company can navigate users by putting straightforward links on its homepage and at the same time it would be able to sustain its traditional looks; There is need for the company to try and advance its search engine so as to give as accurate results as possible Google’s core proficiency is its strong search technology which gives exact results to its users and that also at the right place without misleading them. Google should concentrate on making its search engine much more dependable, accurate and relevant which is the most important thing as far as the user’s objective is concerned. Getting more users would also help the Google company in getting more advertisers and eventually earning revenue; Google Company has already started localized search and contextual solutions. It should improve the relevance and quality of results of these services as well as should start gathering revenues from advertisers who are covering certain areas and willing to pay only for the results which are accessed by the users of the area in which they are providing products or services; Google Company should start considering providing personalized search solutions by storing users’ information with their permission and making web search easy for them when they come back. This would enable the company generate long term relationship with the customers; Google Company should also focus in improving its search algorithms and stop spammers from spoofing and getting their pages ranked high; Google should frequently take feedback from its advertisers and should make changes in its ranking policies and charging if it is suitable for both the parties as well as in favor of search engine users; Google could also generate revenue by indexing database of big organization and providing them with private search solutions. Google should consider integrating Goggle docs, Gmail, and news reader so that one can do all like that one likes at the same location. In the Google wave, it should be looked into such that if one wants to have a chart with another through private waves, one can be added when the chatting session is on unless he/she as a creator decides to do so. Google should create an option to empty its email trash folder. Google should invent an ability to bar interference with message and comments by providing locks. The organization should also improve its service by adding video chat conference feature Conclusion Google Company remains the main player in the industry that should not consider emerging with mass-market portal. This would harm the company’s independent growth even though that would help Google in securing advertiser and users. Google has advanced technology and excellent minds behind it and it should use that in providing users with 100percent relevant search results. Although rival portals are devising ways and means to attract and retain users, users would still choose the portal that gives most accurate search results. With regard to profit, locking in maximum market from quality services could automatically help Google attract more advertisers from which it makes more money. Therefore, Google should keep updating its technology and services with the same comprehensiveness and simplicity as it has been providing since its establishment. The company, in general has a bright future as long as it maintains a high level of innovativeness and proper management. References 1. David A. (2009) The Google story, accessed on 3rd March 2010, http://yanko.lib.ru/books/internet/google_story.htm#_Toc180528124 2. Battelle J. (2005) The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture, portfolio Hardcover. 3. Hill, T. & R. Westbrook (1997). "SWOT Analysis: It’s Time for a Product Recall". Long Range Planning 30 (1): 46–52. 4. Krishman, (2010) Google Swot Analysis, accessed on 2nd March 2010, http://krishnan.spaces.live.com/blog/cns!40D9B80F5DA0227B!573.entry 5. Google, (2007) Google operating system, accessed on 3rd March 2010, googlesystem.blogspot.com/2007_10_01_archive.html 6. 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Research and Markets, (2009) Google Inc-Swot Analysis, accessed 4th March, 2010 http://www.researchandmarkets.com/reportinfo.asp?report_id=481703 15. David V. & Mark M. (2005) The Google Story, Delacorte Press. Read More