Alternative Solutions to Change of Google Corporation - Essay Example

Alternative Solutions to Change of Google Corporation Google Corporation was founded in 1996 by Larry Page and Sergey Bin as research project develop by these two entrepreneurs out of their college dorm room. They created a new approach to online searching that combined rank system and web crawler technology to create the most effective search engine the World Wide Web has seen so far in its short history. Google was an instant success due to its user friendly qualities and its ability to offer great relevant search engine results for its users. The company began to sell advertisings in 2000 to capitalize on the systems capabilities and to achieve a long income stream for the firm. In 2004 a company that was already million of dollars in revenue decided to go public to spur the company long term growth potential. The Google IPO on April 30, 2004 raised $2.7 billion dollars (Monica, 2004). Today Google is the market leader in search engine industry with a 50% market share and also controls 70% of all internet based advertising revenue. During the 3rd quarter of 2008 Google generated $5.54 billion dollars in revenues (Google, 2008). Google handle half the traffic over the internet today. Its information system has access to nearly 25 billion web pages. The information technology (IT) infrastructure the company utilizes is composed of 450,000 inexpensive servers spread around 25 nations worldwide. The system is very cost effective because not only is the company achieving cost savings in hardware, the software utilized to program the servers is a customized version of the freeware Linux operating system. Google’s superior MIS design provides the company a 3 to 1 cost advantage in comparison with its competitor in order to achieve a comparable computing power. There are three key software applications that optimize the efficiency of the system. The MapReduce software system provides a programming model that simplifies processing. The WorkQueue system allows grouping of queries and schedules to perform distributed processing, while the Google File System serves the function of safe proofing the data by keeping copies of the data in several place to prevent loss of information in case part of the system crashes. Google has excelled in the online advertisement industry. Google has a technology that creates a correlation between the contents of a page and the potential advertisers. The technology creates online ad campaigns that are more relevant than the competitors can provide. For example a Google ad campaign can achieve twice as many click page views than a Yahoo campaign. Google dominance in the search engine game is being threaten to a certain extend by a new player in search industry, Microsoft Corporation. Microsoft is the leading software company in the world which diversified into the search engine industry and by 2004 had a 13% market share. The release of Microsoft new Vista operation system has the potential of doubling the company market share because the operating system will integrate the company search technology. Microsoft has superior “content-aware” and “deep Web” searching capabilities that Google. These advantages are important because it allows search results that are better aligned with the users needs. Along with Microsoft penetration in the marketplace Google also faces other problems that are hurting the company. The firm has been accused of being susceptible to internet click fraud which undermines the quality of the advertisement campaigns. In essence click fraud could result in a click-through campaign in which the views have cero intention in purchasing the product or service being advertisement making online advertising campaign worthless. Another problem the company is facing has to do with integrity of its email system Gmail. Gmail utilizes the same technology as its Adsense program, thus the there are security concerns regarding the private massages of its email system because all the content inside the email is being scanned by the system to create ads within the emails. A problem statement that can summarize Google position is “Google needs to diversify its product offering and restructure its functionality in order to offset its weaknesses.” The company needs alternative solutions to change its current path in order to improve its public perception of the services it is offering. The entrance of Microsoft into the search business brought a new competitor that may take business away from Google. The company must develop new income streams in order to compete directly with Microsoft software business. There are good initiatives underway such as the development of web based productivity software to compete with Microsoft Word and Excel. The web-based productivity offering should be expanded to have a comparable product to Microsoft line of products which means adding products to compete with PowerPoint, MS Project, Access, and Publisher among others. The software development division of Google must also create other original products utilizing the web based platform which allows the firm to take advantage of its online presence for distribution purposes. The company’s public relations can be improved by elimination the use of Adsense within the functionality of its G-mail platform. Privacy is very sensitive topic for online users worldwide and protecting the integrity of Google email system is far more valuable than the added Adsense advertising derived revenue coming from the emails. The company should also launch a marketing campaign to invalidate the claims that click fraud is a common occurrence within their ad campaigns. Google has a secret anti-fraud system in place to prevent click fraud. It is time for Google to open its information vault and reveal the functionality of its anti-fraud system in order to increase public confidence in the effectiveness of its advertising offerings. Another solution for the company is to spread its business model outside the traditional web model. We are currently living in an economic age known as the broadband age where technology is being integrated into one single channel. The greatest growth opportunity for technological firms is to take advantage of mobile technology. By the year 2012 there will be 4.9 cellular users worldwide (Plunkett Research, 2008). The new smart phones are capable of connecting users to the internet and provide great multimedia functionality. Google already developed an operating system for cellular phones called Android. This move gave the company a great competitive advantage which can be used to exploit the virgin mobile advertising industry. In 2007 the mobile adverting industry was worth $3 billion, but by the year 2011 it is expected to grow to $19 billion (Viscusi, 2007). Penetration into this marketplace will help Google revived its public image as well as achieve a great new source of income. References Google.com (2008). Google Announces Third Quarter 2008 Results. Retrieved November 2, 2008 from http://investor.google.com/releases/2008Q3_google_earnings.html Monica, P. (2004). Google sets $2.7 Billion IPO. CNN Money. Retrieved November 1, 2008 from http://money.cnn.com/2004/04/29/technology/google/ Plunkett Research (2008). Wireless, Celullar and RFID Industry. Retrieved November 1, 2008 from Plunkett Research database. Viscusi, S. (2007). Mobile Advertising Industry Growing in Response to Changing Consumer Behavior. Retrieved November 2, 2008 from http://www.tmcnet.com/voip/ip-communications/articles/14800-mobile-advertising-industry-growing-response-changing-consumer-behaviors.htm Read More