Business Policy

Strategic Analysis
of

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Introduction to Google
Larry Page and Sergey Brin met at Stanford 1995. Larry and Sergey, then Stanford computer science grad students, begin collaborating on a search engine called BackRub 1996. They change the name to Google 1997.

GOOGOL = 10100

Sustainability Analysis (Added Value) - Imitation

Not easily imitated because of the large infrastructure requirements to serve the relevant pages quickly. Path dependency Time to collect the data to provide results and even more time to analyze both the content and users reactions to the results. Causal ambiguity Some of Googles success is due to its strategic management or simply to the luck of being at the right place at the right time. Bing

Sustainability Analysis (Added Value) Substitution

For Googlers: Switching costs are negligible. No perfect substitutes exist online. Libraries Time consuming Difficult to be exhaustive. For Advertisers: Facebook, Twitter.

Sustainability Analysis (Appropriated Value) Holdup

No single customer i.e. ad-making partner/ad-receiving individual has a controlling interest.

No single account contributes more than 3% to net revenue and less than 5% of the revenue is generated by any given network partner site.

Sustainability Analysis (Appropriated Value) Slack

Productive slack: Enables engineers to spend one day a week working on projects that aren't necessarily part of job descriptions.

can be used the time to develop something new, can be used the time to fix something that's broken.

Sources of Irreversibility

Sunk costs(irreversibility through lock-in): Infrastructure investments. Brand build and the skills of the employees. Opportunity costs (irreversibility through lock-out): Google is a synonym of "SUCCESS" and "INNOVATION. Google uses a cost-benefit approach to manage its business.

Strategic Commitments
Android platform- Acquisition of Motorola Mobility Superior capabilities
Acquired patents( atleast 17,000) -> easing way for innovation  Tight software integration  Can boost the roll out of phones supporting NFC and the Google Wallet- for mobile payments


Irreversible commitment to Android ecosystem throughSunk costs - $12.5 billion  Opportunity costs- of other businesses/resources  Time lags- global fight to dominate the market for smart mobile devices


Googles Commitment to Renewable Energy

Google has invested about US$1 billion in renewable energy in 7 projects$280M toward residential solar power with SolarCity in June Spent $100 million for a majority stake in the a wind power project- The Worlds Largest Wind Farm in April $168 million investment in BrightSource Energys Solar Electric Generating System

Can be used for its huge database and infrastructure Google has hinted that the creation of Google Energy, its wholesale electricity purchasing subsidiary, makes it more feasible to procure clean energy for its own operations

VERTICAL INTEGRATION & DIVERSIFICATION (ACQUISITIONS)

Googles Acquisition Strategy

Small but very talented development team Interesting and innovative products and/or technology/IP Private start-up with a relatively cheap price tag Target company should be either of the three: a. Revenue generating b. Competitors revenue cutting c. A little of both

Google Double Click Acquisition

$3.1b purchase deal of DoubleClick Brilliantly positioned Google to further dominate Internet advertising. (approx 80%) Default Internet advertising broker/platform for: keywords, website display ads, and TV, radio, newspaper/magazine advertising for the average large advertiser.

Google Double Click Acquisition (Contd..)

Strategic Implications:
extremely

well-positioned to predatorily disrupt multiple industries and curb competition Achieve Googles ultimate goal: to dominate all forms of Internet advertising in the future. first-mover advantages of offering advertisers the super efficiencies of cross-media-platform advertising optimization

Google Youtube Acquisition

Instead of developing its own google vedios into a competitive brand, google acquired you-tube. Acquired youtube for $1.65 billion shares in stock The acquisition combines one of the largest and fastest growing online video entertainment communities with Google's expertise in organizing information and creating new models for advertising on the Internet

Google Youtube Acquisition (Contd..)

Strategic Implications:
could curb the competition in the feild of video sharing and itself become the market leader. Google gained access to videos and information that is uploaded to the site. Since Google has such a large advertising base, they were able to incorporate this with YouTubes advertising as well
Google

Google Motorola Acquisition

Entered hardware business by announcing $12.5 billion acquisition of Motorola on 15th Aug Motorola Mobility purchase gives Google the opportunity to pursue their pure vision of Android Motorola has a reserve of around 1700 patents

Google Motorola Acquisition (Contd..)

Strategic Challenges:
Illinois-based Motorola Mobility makes mobile phones, tablet computers and TV set-top boxes areas where Google has no experience other than writing the software to power the devices. Merger of two entirely different business models, work culture etc Googles complete inexperience in running global hardware business Possibility of restructuring
The

S. No Acquisition Date 1 2 Feb 12, 2001

Company

Business

Used as

Deja

Usenet Web Search Engine

Google groups iGoogle

Sept 20, 2001 Outride

3 4

Feb, 2003 April, 2003

Pyra Labs Applied Semantics Zip Dash

Weblog Software Online Advertizing

Blogger Adwords, Adsense

Sept, 2004

Traffic Analysis

Google Maps for Mobile Google Earth

Oct 27, 2004

Keyhole, Inc

Map Analysis

S. No

Acquisition Date May 12, 2005

Company

Business

Used as

Dodgeball

Social Networking Service

Google Latitude

Aug 17, 2005

Android

Mobile Software Android

9 10 11

Dec 27, 2005 Mar 9, 2006 Mar 14, 2006

Phatbits Upstartle @Last Software

Widget Engine Word Processor 3D Modelling Software Video Sharing

Google Desktop Google Docs Google Sketchup

12

Oct 9, 2006

YouTube

YouTube

S. No

Acquisition Date Apr 19, 2007

Company

Business

Used as

13

Marratech

Videoconferencin g Computer Secrity Security

Google Talk

14 15 16 17

May 11, 2007 Sept 16, 2009 Dec 3, 2010 Mar 7, 2011

GreenBorder reCAPTCHA

Google Crome Google Books Google TV Google Advisor

Widevine Technologies DRM BeatThatQuote.com Price Comparison Service Social Groups

18

July 21, 2011

Fridge

Google+

Android Platform
The mobile phone platform started by exDanger leader Andy Rubin 50 million dollars in the year 2005 Attractiveness:

High Low High

Cost of Entry:

Better-off:

Applied Semantics
Known for its semantic text processing technology required for AdSense April 2003 for 102 million dollars Attractiveness:

High Medium High

Cost of entry:

Better-off:

Google Desktop
Phatbits, started by Geoffrey Elliot, had a widget engine December 27, 2005 for unknown price September 2011, it is discontinued Attractiveness:

Medium Undisclosed High

Cost of entry:

Better-off:

Exit Strategy
Discontinue the product Will fade away
Google

Desktop, Google Notebook

Remove the stand-alone status and merge them into existing products
Google

Web Security (acquired from Postini), Google Local (Google Maps), Personalized Search (iGoogle)