Transcript slide

Danny Tran, CSUCI
Company Background
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Co-founded by Larry Page
and Sergey Brin while they
were Ph.D students at
Stanford University. Started
out as a research project.
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Founded 1998. Went public
in 2004.
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Headquartered in Mountain
View, CA.
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Company is focused on
innovations.
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$59.82 billion company.
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49,829 employees
Search Market Share, Year End 2008, and Change in Market
Share ’07-’08 (Data Source: Hitwise)
Products
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Web-base Products
– Search tools
– Advertising services (money
maker)
– Communication and
publishing tools
– Development tools
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Operating systems
– Android, Chrome OS
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Desktop applications
– Google Chrome, Picasa
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Mobile applications
– Youtube
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Hardware
– Google Glass, Google Phone
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Services
– Google Ideas (think tank)
http://sumtips.com/2011/02/googles-periodic-table-apis-products.html
Article 1: Searching for Value
• Google is well
known for
providing a unique
work environment
for employees that
provides plenty of
benefits.
http://commons.wikimedia.org/wiki/File:Googleplex_solar_power.jpg
• These benefits are
expensive. Are they
worth?
Article 1: Cost of Employee Benefits
• Costs:
– Google’s operating costs exceed $1.5 billion per quarter (Kafka 2009).
Payroll-related benefits account for about 50% of revenue
– Food expenses alone exceed $63 million just for Us operation (Sridharan,
2008).
– Spent $37,000 per child for day care service(Young, 2008).
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Benefits:
– Satisfied employees equates to satisfied customers which enhance firm
profitability and market share
– Google had $209,624 in profit per employee in 2008, beating all other
large tech companies in the sector like Microsoft, Apple, Intel and IBM,
and competitor Yahoo! (at $31K per employee) (Pingdom 2009).
Article 2: Google’s Business
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UNDERSTANDING THE INCREASE IN ONLINE AD SPENDING
SEARCH ADVERTISING
How Much Do Advertisers Pay Per Click?
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AD NETWORKS – DISTRIBUTION BEYOND SEARCH
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IP Addresses and Geotargeting
Ad Networks and Competitive Advantage
MORE AD FORMATS AND PAYMENT SCHEMES
CUSTOMER PROFILING AND BEHAVIORAL TARGETING
PROFILING AND PRIVACY
SEARCH ENGINES, AD NETWORKS, AND FRAUD
THE BATTLE UNFOLDS
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Strategic Issues
More Ads, More Places, More Formats
YouTube
Apps and Innovation
Google’s Search Engine Technology
• Web crawling: Uses a software called web
crawler to navigate the web. Sorting the
pages by content and other factors
• Indexing the documents: keeping track
• Algorithms: gets to work looking for clues
to better understand what you mean and
based on these clues they pull the
relevant documents from the index
• Ranking the results
High Level Google Architecture
http://infolab.stanford.edu/~backrub/google.html
Understanding Search Advertising
http://faculty.csuci.edu/minder.chen/mba550/
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Is an online advertising service that
places advertising copy at the top or
bottom of, or beside, the list of
results Google displays for a
particular search query.
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The choice and placement of the ads
is based in part on a proprietary
determination of the relevance of
the search query to the advertising
copy.
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Is Google's main source of revenue.
Google's total advertising revenues
were USD $42.5 billion in 2012.
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Offers cost-per-click (CPC), cost-perthousand-impressions
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Allows publishers in the Google
Network of content sites to serve
automatic text, image, video, or
interactive media advertisements
that are targeted to site content and
audience.
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$9.71 billion annual revenues
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These advertisements are
administered, sorted, and
maintained by Google.
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They can generate revenue on either
a cost per-click or cost perimpression basis.
Google Business Model
http://bmimatters.com/2012/03/29/understanding-google-business-model/
Google’s Competitive Edge
• Company has developed an strong
infrastructure base that guarantees
a fast and efficient search engine.
• Because of the incredible speed, a
user is less inclined to switch to a
competitor.
• Spent around $7 billion on their
infrastructure in 2013.
• Strong brand
• Financially stable
http://www.datacenterknowledge.com/archives/2014/02/03/google-spent7-3-billion-data-centers-2013/
Challenge for The Future
• In the next few years, paid search is expected to grow by only
13% annually, whereas mobile advertising is expected to grow
by more than 200% in total by 2016. Social network
advertising is expected to grow by nearly 30% annually.
• Lack of real engagement with the Google+ network.
• Lack of product integration.
Google’s Strategy for the Future
• Earn: Focus on search
advertising business.
• Entice & Defend:
Enticing people to use
services that can either
deliver ads or collect data to
improve targeting.
• Expand The Pie: Seek to
increase internet usage
among people.
• Experiment: letting
employees experiment with
new projects.
Quiz
1. Which product is Google’s biggest source of Revenues?
A. AdWords
B. AdSense
C. Doubleclick
2. Identify the correct order on how search engine works:
A. Web crawling->Indexing->page ranking
B. Indexing->page ranking->web crawling
C. Page ranking->web crawling-> indexing
3. Who are Google’s main competitors in the search engine business?
A. Facebook and Twitter
B. Yahoo and Microsoft
C. Intel and Dell
Reference
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http://edgar.secdatabase.com/1404/119312513028362/filing-main.htm
Kafka, P. (2009, April 16). Google revenue slumps but cost cutting pays off. The Wall Street Journal Digital Network:
http://mediamemo.allthingsd.com/20090416/googles-revenueslumps- but-cost-cutting-pays-off/
Sridharan, V. (2008, April 23). Google's Ginormous Free Food Budget: $7,530 Per Googler, $72 Million A Year*. The Business
Insider: http://www.businessinsider.com/2008/4/googles-ginormous-food-budget-7530-pergoogler
Young, C. (2008, July 30). Are Killer Benefits Poised to Kill Employee Morale and Your Bottom Line? Retrieved from HR
Resource: http://www.hrresource.com/blog/view.php?blog_id=448
http://www.linkedin.com/today/post/article/20130628195308-4802093-google-s-strategy-explained
http://infolab.stanford.edu/~backrub/google.html
http://www.forbes.com/sites/tomiogeron/2013/03/10/googles-4-biggest-technical-challenges-according-to-search-guruamit-singhal-sxsw/
http://www.fool.com/investing/general/2014/04/19/3-threats-to-googles-future.aspx