International management

Summary for the Case study of Googles country experiences

Case study
Googles country experiences: France, Germany, Japan
1) About the Google Inc. Google Inc. was formed in September, 1998 by Stanford graduates Sergey Brin and Larry Page. By June 2000 it became the worlds largest search engine with its introduction of a billion page indexer. The web search business was used to find products and services. In August 2007 alone, there were more than 61 billion individual searches worldwide. Google based in the U.S. became widely popular because it could provide simple fast and relevant search results. Over the years, Google has perfected its technology to display results that were more accurate and relevant. Question 1: How does a search engine work and make money? What is the exportability of a search engines technology and business model? Google didnt follow the practice of paid inclusion, i.e. one couldnt buy their way into the search results. Paid results were shown outside the regular search results. The companys business was split between advertising on its website and selling its technology to the other sites. The business model of AdWords (when a user searches on Google, ads for relevant words are shown as "sponsored links" on the right side of the screen, and sometimes above the main search results) allowed companies to purchase keywords for advertising purposes. An internet user searching on that keyword would get the unsponsored results as well as the advertisements (sponsored links). Google's total advertising revenues reached the $28 billion in 2010. A key component in Googles strategy was to expand its search to new international markets. By 2007 internet users could use Google in 120 languages and it was available in almost 160 local domains. If a query was raised outside the U.S. the location of the surfer was determined and google .com automatically assumed the local domain. Eg. if a user in the UK made a google search the result would be served by google.co.uk.

Our Groups opinion: Clients of Google are paying for the advertisements. It is a win-win situation for each parties. Many companies would pay for Google to advertise its services or goods outside the U.S. as well, so the technology is exportable easily through Outsourcing. However internet grew bigger, Google got better. The companys rapid rise and its dominance in search and other web areas prompted concerns in a number of countries. There were demands that Google censor its search results according to government regulations. For instance in France and Germany removed links to pro-Nazi, anti Semitic and other controversial sites. 2) Google in France In 2000 Google launched a webpage with a French domain namely google.fr. Google shortly became the dominant search engine in France and offered services in regional French dialects. To challenge Google, the French and German governments reacted with plans to develop their country specific search engines. To many French companies, Googles business model of displaying sponsored links amounted to trademark counterfeiting. Many advertisers sued Google and the French courts ruled mostly in favor of copyright holders. Google should have found the means to block advertisements by third parties who have no right to these trademarks. Google paid $ 75,000 in damages and costs to different companies. French law is just very protective of trademarks said Myriam Boublil spokeswoman of Google. Further uproar came when Google announces its plans to digitize books and documents from a handful of US and British university libraries. It caused alarm, and it was felt that the initiative would further strengthen US power to set a global cultural agenda. In response in March 2005 the French president Jacques Chirac announced that the country would start its own digital book project. In April 2005, President Chirac and the German chancellor Schrder endorsed a plan to build a new multimedia search engine namely Quaero. The process was an image mining where the software would recognize shapes and colors and then retrieve still images and video clips quiet similar to the query image. Quaeros main aims were being cultural and political rather than commercial. Analysts said Europe wants to secure access that does not have to be channeled through American technology.

3) Google in Germany In 2000 Google launched the google.de domain also the Googles free e-mail (Gmail) came under the court scanner. Daniel Giersch a German born venture capitalist insisted remarked that Googles behavior is very threatening, aggressive and unfaithful and to him its very evil. Google was asked to remove all Gmail references from its German service and cease handing out gmail.com aliases to users within the geographic area. So Google has stopped to use Gmail in Germany and instead adopted Google mail. Under the new government in Germany they didnt officially commit to the Quaero project. In 2007 Germany set up the alternative development project named Thesus. The German and French projects were only remotely connected. Germans wanted to develop multimedia search and develop text search. European Union gave a confirmation to Germany to go ahead and spend EUR 120 million on Thesus. With this project they wanted to improve Germany and Europes ability to compete and search a top position in IT and communication technology. 4) Google in Japan The Asia Pacific was another important region on Googles global expansion list and built additional search services for Asian character-based languages like Japanese, Korean and Chinese. Googles Japanese subsiding established in 2002, was its fourth business venture outside the US. In 2005 the Japans Ministry of Economy, Trade and Industry organized a study group consisting of about 20 Japanese electronics companies and universities. The search engine technology would be developed to compete with search companies like AJ Japan, Google Japan and Yahoo Japan and others. The government wanted a Japan centric search engine that would likely wrest back some of the domestic market share and advertising revenue that the large search firms were getting. In 2007 Japan launched its project to counter Googles and Yahoos dominance of searching. The state led project involved 10 partnerships, each tasked with a specific next generation search function. Toshihide Yahiro (director of the Ministry of Economy organization) said The key to Japans competitiveness has been our core technology but we need to create a new value added service that is personalized.

Question 2: Why did many governments appear threatened by Google? How did they counter this threat? Analyze earch country separately. Our Groups opinion: Earch governments just wanted to protect its own market and avoid U.S. control and dominance (eg. Google censor its search results according to government regulations). Also they wanted to build up a country centric search engine. Therefore in order to counter the threat they have implemented country-based projects. Namely Quero in France, Thesus in Germany and another one in Japan. This way Googles sovereignty could be reduced and the revenues stayed within the state border. 5) Understanding the competition All the above countries were stressed on search not only because it was crutial, but also they were wary of US dominance in information business. Google as it expands to emerging economies in the Asia Pacific, has to tackle competition from the local search engines. China with one of the highest and fastest growing internet population, it is an important market for the companies, but nobody can compete with the local search engine Baidu. In its international growth Google is in the unenviable position of decidiong who poses a bigger threat to its dominance Yahoo and Microsoft or the local search engines as Baidu or the government-backed country search engines. Question 3: Is the threat from the government sponsored search engines real of imagined? What can Google do to secure its dominance? What can Google learn from those experiences to guide its entry strategy for other countries? Our Groups opinion: Without aggressive appearance Google was not able to gain revenues. The threat was real from the government sponsored search engines side. To secure the dominance renewal of the programs and using new web face would be important. Google might pay more attention to the local needs and should be more country-focused, and well-prepared before start operating on foreign markets.