Google (HBR 9-910-036)

1. Case Study:  Google Inc.  
1. HBR:  9-910-036 
2. Case Revised April 11th 2011
3. Related Case:  9-804-141
4. Authors Ben Edelman, and Thomas Eisenmann
5. See Also this Google Case.
2. 1992:  First Web Browsers become available 
3. 1994:  Yahoo Launched by Filo and Yang of Stanford
1. human edited link list by category
4. 1995:  Monier from DEC develops index
1. technology replaces human editors of web links
2. becomes Alta Vista
3. Yahoo starts to use Alta Vista search
5. 1998:  Yahoo switches from Alta Vista algorithm to Inkomi
1. Inktomi uses parallel processsing
6. 1999: Google develops CTR (click through rate)
1. weighing factor for cost per click (CPC)
2. allowed more clicked on ads to be ranked
3. revenue maximization
   
7. 2001:  Google the 9th largest US website
1. 24.5 million unique hits/month
8. 2002:  AOL switches to Google search, ads
9. 2003:  Yahoo acquires Overture
1. ads shown in search results
2. per click payment model
3. search predicted customer interest
4. 70% of online transactions estimated from search
5. 40% of searches were for products/services
10. 2003:  Google launches "contextual" ads called AdSense
11. Google based in Mountain View, California USA
1. 1998 Brin, Page start search research
2. Creation of PageRank algorithm
1. based on page inbound link count
2. weighing factors of referring page's importance
3. page author's choice to link implies importance
3. Founded in 1999
1. Venture Capital
2. Sequoia
3. Kleiner Perkins
4. IPO 2004 at $85/share
5. 2 classes of shares 1:1 and 10:1 voting rights
6. insulated Brin, Page and Schmidt
7. enabled strategic control to remain with original core management
8. limit new shareholders say
12. 2004:  Google launches personalized search
13. Incentivation for Advertisers Joining Google:
1. free software tools to optimize ads
2. Google Analytics- sales yielding keyword identification
3. better ad ranking
4. price performance (0.01 vs 0.05 CPC for Overture) (Page 4 bottom)
14. Fall 2008:  Google releases Android operating system
1. Gross Revenue $21.2B
2. Operating Income $5.5B
3. Cash $8.7B
4. 20,164 employees
   
15. November 2009:  Google "search" share 65%
1. Yahoo 17.5%
2. Outside US, Google "search share" in excess of 90%
16. January 2010:  Google releases a new mobile phone
1. Nexus One
2. touch screen
3. voice recognition
4. Google's share price tops $600/share
5. Google's market value $189B
17. Google's Product Offerings after company launch
1. Gmail- email service 
1. hotmail threat
2. Google Maps- map creation service
1. mapquest threat
3. Google Books- archival and reference service
1. bookstore threat
4. Google Docs- word processing, spreadsheet 
1. Microsoft threat
5. Google Calendar- schedule service 
1. Yahoo threat
6. Google Finance- stock information organization
7. Google Checkout- web payment service
1. e-commerce like service
8. In aggregate- one stop web shop
9. "personalization features"
18. Google's acquisitions
1. 2006 Youtube- video on demand
2. 2007 Doubleclick- banner ads
19. Advertising Revenue (Page 3 )
1. coverage rate- how many searches are covered by ad?
2. CTR- increased over time as targeting improved
3. CPC- depended on bidding
4. Revenue Split- bargaining based
20. Innovation Management (Page 6 bottom)
1. small teams (3-5 people)
2. minimize middle management
3. 70-20-10 rule
1. 70% core work (Ads)
2. 20% extend core (Apps)
3. 10% new business (Innovation)
21. Google Criticisms
1. improper charging due to hacking
2. "click fraud"
3. "typosquatting"
4. use of competitors ads in search results (Ex. Geico)
5. news reuse- bypassing news portals
6. storage of user search history
7. email key word based advertising
22. Google's competition
1. 2009 Bing (Microsoft)-  better data presentation in some cases
2. Yahoo
3. Ebay-  Google checkout
4. Apple-  Google android and Nexus
5. Amazon-  Google Books