How Google Grew10 Good Moves In 10 Good Years

Angela Hey, PhD

amhey@techviser.comTechviser

Presentation To Penn State University

Fall 2008

Google is a trademark of Google Inc.Google Logos belong to Google

Why Has Google Grown So Fast?

Innovation

Marketing

Customers

2

The Main Campus

3

Picture Source: Google

The Original Business - Search

4Source: Google

2002

2003

2004

2005

2006

2007

2008

e

2009

e0

5

10

15

20

25

30

MS OSBAOLYahooeBayAmazonGoogle$

Billion

s (

US

)Google’s Revenues ($US Billions)

MS OSB – Microsoft Online Systems BusinessAnnual Calendar Year RevenuesSources: Techviser and Annual Reportse - Analyst Estimates from Yahoo! Finance 5

Google Amazon Yahoo! Microsoft eBay0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Past 5 Years Next 5 Years

Average Annual Revenue Growth (%)

6

Source: Yahoo! Finance Oct 2008

Google Amazon Yahoo! Microsoft eBay0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Profit MarginOperating Margin

Profitability (%) Operating Profit/Revenues

7

Source: Yahoo! Finance Oct. 2008Based on trailing 12 months from Sept 08, except Microsoft June 08.

Move 1 – Academic ResearchGoogle’s origins

8

Stanford

Expertise and Reputation

Advisors and Funders

Commercializing Algorithms

9

Move 2 – Creative Culture

10

Don’t Be Evil

Paraphrased fromhttp://www.google.com/intl/en/corporate/tenthings.html

1. Focus On The User

2. Do One Thing Well

3. Fast > Slow

4. Web Democracy

5. Answers Anywhere

6. Can Make Money &Not Be Evil

7. Always More Info

8. Transborder Need

9. Serious, But Suits

10.Great Isn’t Good

Features And Not Products

11

~Apps sometimes in 70%

70%

20%

10%

70 Search and AdvertisingCrawl, Index, Ads

20 Strong Potential ProjectsPicasa, Blogger, News, ~Apps (Gmail, Docs)

10 InnovationsWiFi, Offline Ads, Google Transit, Android

Sergey’s Resource Allocation Rule

12

Move 3 – Hire Good People

Eric Schmidt

Sergey Brin

Larry Page

Schmidt Joins Founders In 2001: March – Chairman, August - CEO

20,123 EmployeesSeptember 2008

Source of Photos: Google13

“Obviously everyone wants to be successful, but I want to be looked back on as being very innovative, very trusted and ethical and ultimately making a big difference in the world.” Sergey Brin (Source: ThinkExist.com)

“We don't just want you to have a great job. We want you to have a great life. We provide you with everything you need to be productive and happy on and off the clock.” Larry Page (Source: Google)

Founders’ Quotes

14

Creativity

Big Visions

High Grades

Unique Achievements

What Does Google Look For?

http://www.topcoder.com/

Why sweat the small stuff when you can change the world, challenge the status quo, impact millions of peoples' lives? Source: Google

http://www.google.com/intl/en/jobs/

Be a winner

15

Move 4 – International 160 Country Domains - .com .uk .de .fr 116 Languages 20 Countries Have Google Offices

61%

39%

3Q04 Revenue Share

49%

51%

3Q08 Revenue Share

Other International 16

Translation

17

http://translate.google.com/translate_tools

35 Languages

Google Earth (and Mars)

18

Source: Google Earth Outreach Conference

Move 5 – Easy To Use

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Easy For All

20

Developers

Searchers

Advertisers

IT Managers

Professionals and

Businesses

Move 6 - Vision

Organize the world's information and make

it universally accessible and useful

21

Google From Cradle To Grave Baby

◦ Google Search For Name - Easily Found Or Anonymous?◦ Photos – Picasa◦ Baby Gifts From Froogle Pay With Google Checkout

Child 1st Website With Google Page Creator Teen Makes YouTube Videos Use Android Mobile Phone Blog On Blogger With AdSense Entrepreneur Creates Business With AdWords Tracks Customers With Google Analytics Finds New Offices Using Google Maps & Earth Small Business Uses Google Applications Large Business Uses Google Search Appliance Keep Health Record on Google Health Obituary On Google News

22

Google’s Wireless Vision

Open Communications Open Phones Open Networks Open Spectrum

Open networks

http://googlepublicpolicy.blogspot.com23

Move 7 - Analytics

http://analytics.blogspot.com/ See demos on YouTube

24

Urchin originally acquired by Google in 2005 Urchin is managed on enterprise servers

and works behind firewalls Urchin is licensed through partners for

$2995 Hosted analytics that enable data

extraction, more drill-down analysis

Urchin

25

Source: Google

Move 8 - Branding

2008 Rank

2007 Rank Brand

2008 Brand Value($ Millions)

2007 Brand Value($ Millions)

Percent Change

(in %)1  1  Coca-Cola 66,667  65,324  2 2  3  IBM 59,031  57,091  3 3  2  Microsoft 59,007  58,709  1 4  4  GE 53,086  51,569  3 5  5  Nokia 35,942  33,696  7 6  6  Toyota 34,050  32,070  6 7  7  Intel 31,261  30,954  1 8  8  McDonald’s 31,049  29,398  6 9  9  Disney 29,251  29,210  0 

10  20  Google 25,590 17,837  43 

Source: Interbrand, Business Week

26

Google’s Logo Reinforces Brand

Source: Logos belong to Google27

Move 9 – LeveragePartners

Acquisitions

Ads, Websites

Open Source Code

Coding Contests

YouTube Videos, Maps, 3D Drawings

Documents, Images, News, Mail, Groups

28

Year Company Result

2001 Deja Usenet Since 1995 Google Groups

2002 Pyra Labs Blogger

2003 Applied Semantics Advertising Technology

2004 Keyhole Google Earth

2004 Picasa Photo Albums

2005 Urchin Software Google Analytics

2005 2Web Technologies Spreadsheet

2006 Upstartle, Writely Docs – Word Processing

2006 YouTube $1.65B Video Sharing

2007 Postini $625 Enterprise Secure Messaging

2007 DoubleClick $3.1B Advertising

2008 Begun $140M Advertising (Russia)

2008 Omnisio $15M Online Video

Acquired Over 50 Companies

29

OpenSocial – Share Friends, Activities, Lifestyle

OpenSocial

/Source: http://code.google.com/apis/opensocial

Move 10 – Environmental Outlook

31

Google’s main campus (Googleplex) system featured 9,212 solar panels with a peak generating capacity of 1.6 megawatts when installed in 2006.

RechargeIT.org

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Understanding transportation savings – reducing CO2

http://www.google.org/recharge/

Investments In Energy

33

BrightSource Energy, Inc. designs and builds large scale solar plants that deliver low-cost solar energy in the form of steam and/or electricity, at prices competitive with fossil fuels, to industrial and utility customers worldwide.

   

eSolar Inc. (PDF) specializes in solar thermal power. Solar thermal technology replaces the fuel in a traditional power plant with heat produced from solar energy, and has great potential to produce utility-scale power that is cheaper than coal.

Clean Energy 2030 – see Knol

1 Academic

2 Culture

3 Hiring

4 International

5 Easy

6 Vision

7 Analytics

8 Branding

9 Leverage

10 Environment

Summary

34

How Big Can Google Grow?