Biz Policy- Google
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Transcript of Biz Policy- Google
8/3/2019 Biz Policy- Google
http://slidepdf.com/reader/full/biz-policy-google 1/25
Poloumi- 27
Ekta - 32
Chandana - 42
Sindura - 156
Business Policy
Strategic Analysisof
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Introduction to Google
Larry Page and Sergey Brin met at Stanford ² 1995.
Larry and Sergey, then Stanford computer science grad
students, begin collaborating on a search engine calledBackRub ² 1996.
They change the name to Google ² 1997.
GOOGOL = 10100
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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 Google·s success is due to its strategic management
or simply to the luck of being at the right place at the right
time.
Bing
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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.
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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.
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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.
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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.
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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 through-
Sunk costs - $12.5 billion Opportunity costs- of other businesses/resources
Time lags- global fight to dominate the market for smart
mobile devices
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Google·s 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 powerproject- The World·s Largest Wind Farm in April
$168 million investment in BrightSource Energy·s 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
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VERTICAL INTEGRATION
& DIVERSIFICATION
(ACQUISITIONS)
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Google·s 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. Competitor·s revenue cutting
c. A little of both
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Google ² Double Click Acquisition
$3.1b purchase deal of DoubleClick
Brilliantly positioned Google to further dominate
Internet advertising. (approx ² 80%)
Default Internet advertising broker/platform for:
keywords, website display ads, and TV, radio,
newspaper/magazine advertising for the average
large advertiser.
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Google ² Double Click Acquisition
(Contd..)
Strategic Implications:
extremely well-positioned to predatorily disrupt
multiple industries and curb competition
Achieve Google·s ultimate goal: to dominate all formsof Internet advertising in the future.
first-mover advantages of offering advertisers the
super efficiencies of cross-media-platform advertising
optimization
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Google ² Youtube Acquisition
Instead of developing its own ´google vediosµ 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 foradvertising on the Internet
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Google ² Youtube Acquisition
(Contd..)
Strategic Implications:
Google could curb the competition in the feild of video
sharing and itself become the market leader.
Google gained access to videos and information that isuploaded to the site.
Since Google has such a large advertising base, they
were able to incorporate this with YouTube·s advertising
as well
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Google ² 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
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Google ² Motorola Acquisition
(Contd..)
Strategic Challenges:
The Illinois-based Motorola Mobility makes mobile
phones, tablet computers and TV set-top boxes ² areas
where Google has no experience other than writing thesoftware to power the devices.
Merger of two entirely different business models, work
culture etc
Google·s complete inexperience in running global hardware business
Possibility of restructuring
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S. No Acquisition
Date
Company Business Used as
1 Feb 12, 2001 Deja Usenet Google groups
2 Sept 20, 2001 Outride Web Search Engine iGoogle
3 Feb, 2003 Pyra Labs Weblog Software Blogger
4 April, 2003 Applied
Semantics
Online Advertizing Adwords, Adsense
5 Sept, 2004 Zip Dash Traffic Analysis Google Maps forMobile
6 Oct 27, 2004 Keyhole, Inc Map Analysis Google Earth
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S. No Acquisition
Date
Company Business Used as
7 May 12, 2005 Dodgeball Social
NetworkingService
Google Latitude
8 Aug 17, 2005 Android Mobile Software Android
9 Dec 27, 2005 Phatbits Widget Engine Google Desktop
10 Mar 9, 2006 Upstartle Word Processor Google Docs
11 Mar 14, 2006 @Last Software 3D ModellingSoftware
Google Sketchup
12 Oct 9, 2006 YouTube Video Sharing YouTube
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S. No Acquisition
Date
Company Business Used as
13 Apr 19, 2007 Marratech Videoconferencin
g
Google Talk
14 May 11, 2007 GreenBorder Computer Secrity Google Crome
15 Sept 16, 2009 reCAPTCHA Security Google Books
16 Dec 3, 2010 Widevine Technologies DRM Google TV
17 Mar 7, 2011 BeatThatQuote.com Price Comparison
Service
Google Advisor
18 July 21, 2011 Fridge Social Groups Google+
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Android Platform
The mobile phoneplatform started by ex-Danger leader AndyRubin
50 million dollars in theyear 2005
Attractiveness: High
Cost of Entry: Low
Better-off: High
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Applied Semantics
Known for its semantictext processingtechnology required forAdSense
April 2003 for 102million dollars
Attractiveness: High
Cost of entry: Medium
Better-off: High
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Google Desktop
Phatbits, started by GeoffreyElliot, had a widget engine
December 27, 2005 forunknown price
September 2011, it isdiscontinued
Attractiveness: Medium
Cost of entry: Undisclosed
Better-off: High
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Discontinue the product ² ´Will fade awayµ
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)
Exit Strategy