Grgoire LE CHANU de BEAUPUY Victor de MONREDON Vincent LE ROY Florence LE MOUEL Gregory LE GOFF Guillaume LATROMPETTE

Google Inc.
Globalization case study

11/10/2007

200 000 000. 200 million people have access to the World Wide Web. It is more than yesterday (60 million 5 years ago) and far less than tomorrow. Nearly all (92%) of those people know and use web search engines such as Google. But Google is more than a simple web search engine. It provides many tools and global services for the global user, for free. The result is an unanimous success: world leader in web search engines, growing use of diverse services and enthusiast financial markets, only 11 years after the creation of Google Inc. Globalization seems to play a great role in this outstanding growth: Web services at a global scale, growing communications, globalized financial markets are important assets in Googles strategy. How and to what extend does globalization helps Googles success?

Table of contents
Table of contents ..................................................................................................................................... 2 1. Overall macroeconomic presentation ............................................................................................. 3 1.1. 1.2. 2. Mission .................................................................................................................................... 3 Services .................................................................................................................................... 3

Financial aspects: The Google Way to become billionaire ............................................................ 11 2.1. 2.2. Latest results: ........................................................................................................................ 11 Stock Market: Is the sky the limit? ........................................................................................ 11

3.

Business environment: .................................................................................................................. 12 3.1. 3.2. 3.3. PESTEL analysis ...................................................................................................................... 12 The SWOT analysis: ............................................................................................................... 14 The Porters model: ............................................................................................................... 16

4.

Social and political analysis ........................................................................................................... 18 4.1. 4.2. 4.3. Google: Between technology and society ............................................................................. 18 Political aspect ....................................................................................................................... 18 Social evaluation:................................................................................................................... 20

5.

Risk ratings .................................................................................................................................... 23

Sources: ................................................................................................................................................. 26

1. Overall macroeconomic presentation

1.1.Mission
Google has not invented the search engine. That was AltaVista in 1995. But in 1996, two Stanford students, Sergei Brin and Larry Page were working on a project that would change the world for ever. The name: BackRub. The name Google came only a few months later, coming from the word googol, meaning a 1 followed by 100 zeros, evocating the number of piece of information that this new kind of search engine would be able to manage. Google inc. was created in September 1997. It has itself been entitled of an as simple as ambitious mission: Google's mission is to organize the world's information and make it universally accessible and useful (google.com).

Obviously, this leitmotiv is to be followed by and to make profit with it. To achieve this mission of vector of globalization, Google is congregating an army of tools and services, satellites of the search engine core.

1.2.Services
Google is not only a search engine. It also provides many services, tools and other information supports aiming at make users digital life easier and entertaining. But first of all, a focus on the biggest web search engine ever is indispensable.

1.2.1. www.google.com : THE search engine

The success of Google is mostly due to its innovative concept of PageRank: web pages relevance is not only based on the number of key word contained but also on the number of links targeting this page. Results are so more accurate. Allied to design of an innovative sobriety (no flash, no ads, etc), these assets have immediately made Googles success: when Google achieved its beta test phase in September 1999, it was already recording 3 million requests per day. Currently, Google has indexed more than 8 billion pages, 1 billion images and faces 1 billion requests per day. It represents more than 50% of the search engines market shares in the US and near 90% in France. Competitors: Yahoo!, MSN search, AltaVista, and others. Among this last population, some emerging competitors such as Exalead and its new AJAX platform must be watched carefully.

1.2.2. Adwords.google.com: the ultimate cash machine

Basically, Adwords is the advertising system warrant of Googles revenues. It displays sponsored answers to users requests on Google.com. The client is charged per click by an auction process: the more the link is well placed and relevant, the more expensive it is. Adwords has generated more than 61% of the $10.6 million revenue of Google Inc in 2006. The other part is mostly generated by Adsense, payper-click links on sites of the Google partners.

1.2.3. www.gmail.com : webmail service

Created 3 years ago on an AJAX basis, Gmail is the online mail service created by Google. Their main asset is to provide nearly a 3 Go storage for each user. Gmail detained a bit more than 10% of the Global web mail market, before AOL but far behind Yahoo!Mail (that allowed full POP3 email management) and Hotmail (Users of MSN messenger). However, at the opposite of his opponents, Gmail is still in beta test

1.2.4. news.google.com: Global news, live

Created in 2002, Google news is a service collecting pieces of information all over the world from web sources among more than 7000 sources such as press agencies or newspaper. This service is still in beta test out of the US. 1.2.5. www.google.com/analytics : market data and analysis, for free

Thanks to the acquisition of Urchin Software Corporation in March 2005, Google Analytics provides a service of web traffic analysis and market data to any Google user. Main advantage of Google Analytics regarding its competitors like the famous Xiti: its free.

1.2.6. www.google.com/products: Product search engine

In first beta test since April 2007, Google Product Search or Froogle, is a product search engine at a global scale, such as Kelkoo.

1.2.7. www.google.com/notebook : collect information directly from your browser

Via your internet browser such as Internet Explorer or Firefox, a simple click allows you to store information quickly and easily. NoteBook is free and available since May 2006.

1.2.8. Code.google.com : open source for all

Google provides portions of open source code of various tools and services to programmers in order to improve after audit their own services on an empirical way. 1.2.9. Desktop.google.com : the power of Google at home.

From now on, each PCs on the planet can benefit from Googles accuracy and efficiency on his own Work station: For free, Google Desktop is indexing all your data and provides a quick search for your files as an internal search engines, looking for your keywords inside text documents, pdf, spreadsheets or messages. It also comes with a vertical toolbar providing widgets and making your digital life far easier.

Competitors are often embedded in operating software : Live search for Windows Vista or Spotlight for Mac OS X 10.4. Even if they are design to fit perfectly in the configuration, Google desktop remains quicker and less resource-guzzling than the others.

1.2.10. Docs.google.com : an office suite on- line

Created on an AJAX basis, and born from services such as Writely, Google Docs regroups since October 2006 a word processor, a spreadsheet and recently a presentation tools, on line. Even if they still are in beta test, the suite is enough stable and well design for a professional and regular use. More than being compatible with other Google tools like Gmail, those applications support MS Office and Open Office formats such as .xls, .doc, .ppt as well for import as for export. As complete as old

versions of MS Office and free for the common user, Google Docs represents a real competitor of MS Office, Open Office or other office suites.Earth.google.com : Now you know how a satellite feels.

First developed by Keyhole Inc, the concept and the company were taken over by Google in 2004. After downloading a software, it allows the user to fly over the Earth and to zoom to an outstanding maximum resolution of 2.58cm/pixel. The main point is to find locations and businesses and to localize it at a global scale. It also permits to see some buildings in 3D or to pinpoint locations with pictures and share them with all users all around the world. Alternatives are few : World Wind of Nasa, Windows Live Local or Geoportail in France. But the global efficiency of Google Earth keeps him at the first place.

1.2.11. Maps.google.com : the Earth, on-line.

Google Maps is an entirely online service of free geographical map and road map launched in April 2006. As Google Earth, it provides a convenient satellite view, allows the user to find businesses, etc. The point is that Google Maps is accessible from any platform, Workstation, laptop or mobile device.

It also features a new service, Street View, providing picture of each portion of streets, currently only in big American cities, in which you can hang around freely, as if it was in real time. The application of course is designed to show as precisely as possible where spotted businesses are. Competitors are websites as Mappy, Viamichelin or others, even if they provide less services, their itinerary search engines remains more efficient. 7

Google Moon and Google Mars are the same kind of applications, this time applied respectively to our satellite and to the red planet, with obviously reduced possibilities.

1.2.12. Gears.google.com : Tools and services on local

Google Gears is a tool providing an off-line access to services traditionally accessible only on-line. By downloading a database engine, you can use applications such as Google Reader, Remember the Milk or Zoho Writer, which are currently the only applications available, in order to develop offline web applications.

1.2.13. Groups.google.com community

knowledge

Google Groups is chat community, giving access to an encyclopedia of more than a billion of usenet messages, stored since 1981.

1.2.14. Pages.google.com : Do your website yourself

Google Page Creator was launched in beta test via Google Labs in February 2006 and provides the possibility of creating a custom web page, without being an expert in HTML development. Each user can work on 41 various templates, 100Mo disk space and a dedicated URL address. Other sites such as Joomla have already tried this kind of user-friendly service but still without expected success.

1.2.15. Checkout.google.com : The PayPal killer

With Google Checkout, Google is providing an on-line payment solution. If the transaction is as safe as PayPal, running on the same e-money basis, Google Checkout has a considerable advantage on his competitor: it does not take a 3% commission, but 2% for merchants only, from 31st December 2007. Obviously, those merchants benefit from discounted fees if they are AdWords clients.

1.2.16. www.google.com/reader: News dont need to be searched anymore.

Launched in October 2005, Google Reader is a RSS and Atom flow reader. Similar to Gmail in appearance, extremely convenient and user-friendly, it is the most important aggregator with web interface.

1.2.17. Books.google.com: The world wide library digitized

Google Books Search is a project launched in 2004, aiming at scanning all volumes of the biggest libraries in the worlds. Thanks to a robotic scanner working at a rate of 1000 pages per hour, Google has already digitized more 1 million volumes. His opponent in this amazing data race is an alliance between Microsoft and Yahoo!, in Windows Live Book Search. At the finish line, there is nothing more than a free digital Alexandria Library.

1.2.18. www.google.com/talk: Instant messaging

Google Talk is for Gmail what MSN messenger is for Hotmail: a free instant messaging service. Where you can send and receive message immediately with your interlocutor. A voice IP module is also available. Since its launch as a beta version in August 2005, Google Talk has been far behind MSN messenger in terms of market shares.

1.2.19. Google transit: The global bus map

Launched in December 2005, the beta test Google Transit is a free application where the user can find a ride between 2 points only by public transportation, calculating time and costs. First limited to the city of Portland in Oregon, it is now available for several US cities. The extension at a global scale is targeted. 1.2.20. Picasa: picture organizer

Picasa is an American company providing an application of picture visualization and organization. In June 2004 Google buys over the software and open its free downloading. 9

It allows the user to manage and organize his always more numerous pictures, as could do software as Windows Media Gallery, Adobe Photo Bridge or any media center embedded in factory settings. With Picasa Web Album, the user can store pictures on-line and of course, share it with the whole world.

1.2.21. www.sketchup.com : 3D model creator by Google

Sketch Up is a 3D modeling software designed for architecture by the company @last Software. In March 2006, Google takes over this firm and released 2 version of Sketchup for downloading, one is free, the other is for professionals. The free one features simple tools, very user-friendly and a drastically different use from classical 3D tools.

All these services and tools are proposed for free for the final user. They all aim at a global application. They all promote and spread global knowledge at the only condition of being connected to the Internet. Consequently, they all follow the mission of Google and so catalyze the phenomenon of globalization of information and ideas.

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2. Financial aspects: The Google Way to become billionaire

2.1.Latest results:
Main data presented by Google during the last financial report: $3,87 billion of revenues, a 58% increase compared to Q2 2006 and +6% compared to Q1 2007. $925 millions of net profit, it represented $1billion for Q1 2007. $2,49 billion (64% of the overall income were generated by all the Google websites. $1,34 billion was generated through Google partners, which represent 35% of the overall income. $1,84 billion come from International businesses, 48% of Google overall income (42% in Q2 2006 and 47% in Q1 2007). 13.786, is the number of people employed by Google on June, 30th 2007. The company has employed 1.548 additional people during the last 3 months.

2.2.Stock Market: Is the sky the limit?

Googles quotation has just reached the threshold of $600 last week on New York Stock Exchange. Since it came to market in 2004, at the initial price of $84, the share has been multiplied by 7. According to the AFP, this outstanding growth put Google at the rank of 12th capitalization in the US with $190 billion and generated an investment capacity which has allowed 44 acquisitions. Stock markets have been welcoming companys strategy, which still outrageously dominate online advertising sector. Its new incursions in cell phones, widgets advertising or video are also much welcomed. According to Bear Stearns analysts, this growth is not over, given that the share could reach real quickly the $700.

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3. Business environment:
3.1.PESTEL analysis
3.1.2. The political environment:

Google is worldwide companies so it has to face the constraints impose by different countries. Indeed, although Google is present in more than most countries around the world, it has to cope with internal rules. The most famous case is that of China. Google has accepted to put a filter on its search engine in order to respect the censorship that prevails in China. So, Google has to adapt itself to local habits in order to impose its search engine in a market. On top of that there are sometimes difficulties between Google and antitrust authorities. One can say that this is normal because Google has become such a big company that it is difficult for it to let the market as competitive as before. We can take the example of the repurchase of the company Double click. This company is specialized in the market of web advertising and European and US authorities are investigating because Google could be too important in the field of web advertising.

3.1.3. The economical environment:

-Google has emerged at the end of the nineties when people were very enthusiastic in front of internet. The level of disposal incomes was high and allows them to have an important growth. They began with 100 000 dollars in 1996, then reach to obtain 1 million and then 25 million dollars from business angels in 1999. So, we can say that if the idea was good, the context was also favorable to develop new businesses. Internet was the center of a formidable enthusiastic move and the market became bigger and bigger each day. The particularity of Google was that it had already found its business model. Contrary to a lot of web companies, Google has, from the very beginning, found a solution to make money on the internet. Most of its competitors might have good ideas but no possibility to gain money and have a sustainable development. Google have seen that by using an advertising adapted to requests, it would be profitable very rapidly. Profitability is a key word here. Because of this relevant business model, Google has faced the storm that has destroyed a lot of start up at the beginning on the 21st century. Now, Google evolutes in a very competitive environment and has to compete with the historical companies of the sector that are Microsoft or Yahoo!.

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Sources: Google stories.com

3.1.4. The societal environment:

Google is the leader of a society that is more and more global. Knowledge will become the key factor of human development over the next decades. The attitudes toward this business are very enthusiastic and we are only at the beginning. The goal of the founders is to organize worldwide information and make it accessible and useful for everybody. But, Google is more and more criticizes because it has started to scan books in order to create a universal library. This project is called Google Print. It has begun in January 2005 in partnership with the greatest American universities. The goal is to scan more than 14 million books for a cost of 200 million dollars. To illustrate the societal environment in that case, we can explain the view of the Bibliothque Nationale de France that think that it is an American project, so, it supposes a choice. Now, a choice is not neuter, and a worldwide biography must be neutral. On top of that, the European project Gallica (whose aim is also to scan books) is in competition with the giant Google. So the societal environment (laws, mentalities) is a key success and Google has succeeded to cope with that kind of obstacles, sometimes with difficulties. For example, a research for Tiananmen pictures in China conducts to pictures of monuments or happy families whereas in France for example, we can see a student in front of a tank.

3.1.5. The technological environment:

The leadership of Google is based on its efficiency. In fact, Google has developed a very efficient search engine which is the most powerful of the market. 500 000 requests per day at the beginning of 1999, 3 million at the end of the same year and 300 million in 2006, that represent more than the half of world requests on the internet. Google offers more than 8 billion pages to people.

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In order to remain the best in the field of technology, Google has bought a great number of start-up that allows it to benefit from the dynamism and creativity of such kind of little business: security, advertising, video

3.1.6. The environmental framework:

Google do not have to cope directly from ecological problems but, faithful to its spirit, Google has decided to be involved in ecological actions. For example, the company has made a donation of 10 million dollars in order support the development of non polluting technologies. Recently, Google has launched a campaign baptized International cleanup weekend that proposes to people to clean a place which is located near the town they live by using Google Earth. To sum up, one can say that Google wants to be integrated in an ecological move in order to be considered as a citizen company, which is very important for its brand image.

3.1.7. The legacy environment:

Legacy is probably the biggest challenge that Google will have to face in the next ten years. Why? Because Google is based on a knowledge economy which means that it will have to develop a new business model that take into account the respect of intellectual property. Indeed, Google benefits nowadays from the work of a large number of people who produces reports, data, videos, pictures And the majority of them are not pay for this information The most famous case is that of Youtube that Google repurchase this year. Many companies have lodged a complaint against this website because some videos have been placed on YouTube without their authors agreement.

3.2. The SWOT analysis:

3.2.1. What are the strengths of Google?

R&D is the first strength of Google. The search engine that they developed is the key success factor of Google. This is this search engine efficiency that allows Google to develop its business model based on a targeted publicity. People are not attracting by a simple ad on a search engine because this ad has often nothing to do with the desire of an internet user. So, the R&D is very important and the most efficient the search engine will be, the most powerful the advertising will be. In order to remain competitive, Google registers a lot of patents per year. It has created new research centre over the world. But, one have to know that Google is nowadays involve in internet of course but also in other industry that have no direct links with internet such as genetic or space.

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But, we all know that it is very difficult for a big company to be as imaginative as a start up. So, Google repurchase a lot of companies like double click to benefit from the expertise of these companies. Another strength is the marketing that Google have succeeded to profit from and also to develop. Financial power is also a great strength for Google. Google has realized in 2006 an annual net benefit of 3.07 billion dollars against 1.46 in 2005, with a turnover of 10.6 billion dollars. This allows Google to repurchase a lot of firm, to develop itself in other sector, to develop its infrastructure Human resources are also primordial for Google because they need high skilled workers. To sum up, we can say that Google strengths are: a great market share on the web a great brand value tradition of innovation material infrastructures (reactivity)

3.2.2. Weaknesses of Google:

Depth and freshness of information: Google was developed at the end of the nineties and some information are not updated. A lack of innovation on the search engine: the search engine, in the view of specialists of the sector, could be more efficient. For example, an internet user could create its profile in Google website in order to obtain researches adapted to him. A problem of security: Google is more and more victim of hackers. One can say that Google is victim of its success, and hackers want t Google will have problems to integrate all the companies it repurchased

3.2.3. Opportunities:

Strategic alliances: With companies of the internet sector: AOL, eBay With mobile companies: mobile phones

3.2.4. Threats:

legal threat: to be condemned by antitrust authorities to be considered as an unethical companies

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3.3. The Porters model:

3.3.1. Threat of new entrants:

Google is now the leader on the search engine market. But, we can see that in the United States, its market share is not so high than in France for example. In order to fight against Yahoo! For example, Google has to continue its strategy based on technology. The key success factor is indeed technology because the first criterion for search engine is efficiency and performance.

3.3.2. Threat of substitutes:

It is difficult to imagine how Google could suffer from a substitution. Nowadays, the concept of search engine cannot be victim of this phenomenon.

3.3.3. Bargaining power of suppliers:

In this kind of business model, the number of suppliers is very important. Indeed, the suppliers are the websites or blogs that are referenced by Google. They can be sometimes in a good position to bargain with Google because the latest needs these websites to exist. Its a win win mechanism. But sometimes, Google has to face problems such as propertys rights It is the case with YouTube and the video that internet users broadcast. The claims for being paid your work will increase. A lot of people put videos on websites like YouTube and do not pay property rights for that. So, Google could face expensive fine if it continues to broadcast such kind of content (movies)

3.3.4. Bargaining power of buyers:

The fidelity of internet users is not so high. If Yahoo becomes more efficient, they will forget Google. On top of that, if Google becomes too intrusive, it exposes itself too boycott organized by communities who want to defend ethic and liberty on the internet.

3.3.5. Rivalry among existing competitors:

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The competition is very intense between competitors. They fight in the field of technology, marketing and finance.

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4.
4.1.

Social and political analysis

Google: Between technology and society

Google is a media because it allows to search and to find information about any topics. Moreover, Google develops concepts such as Google News. Here Google turns into a real newspaper. People have access to information, they can read news. However, a paper is supposed to be objective, not to influence readers. There is a problem concerning information displayed by Google. Actually, adverts play an important role in Google. For example, when we search for information and read results, we notice that the first links are adverts. Advertising men use Google to promote their web sites or products. Therefore, Google encountered many criticisms concerning objectivity of its service. The phenomenon of globalization has a great impact on Google technology because the company has to consider demands from economical lobbies.

So, it is a hard situation for Google because on one hand, economical lobbies influence the company, and on the other hand, Google has to be as objective as possible. In this context of globalization and world competition, Google has to adapt its strategy, which has consequences on the political and social fields. Can we trust the firm when Google managers explain that the advantage of Google is that the mix of information is only made by technological tools such as informatics algorithms? They assert that there is no human intervention in the gathering of information. But, how can we be confident when we see the importance of adverts in Google and when we know that firms become more and more powerful?

How does globalization allow Google to grow and become important in the political field? We will see the reasons why we can say that Google transforms political and social boundaries.

4.2.

Political aspect

4.2.1. Google Earth and national laws in the world:

Google is a tool controlled by each states because, with it, appear new issues. 18

Actually, this is a mean to have access to information whatever it is. The most obvious fact is the creation of Google Earth in 2005 which allows people to find photos of any places in the world. This new technology gives people access to a new knowledge. Google encountered an important success: people are more and more interested in travelling, living abroad. Sociologically, frontiers dont represent real barriers anymore between lands. Google, through this innovation make this evolution more concrete.

However, some governments do not see this innovation as a good thing. This can represent a threat for them because they think it can be a tool useful for terrorists. For example, we can mention the Indian government which asked Google to mask some parts on the map. In fact, the Indian Space Research Organization thought some views were too detailed. Therefore, this could create risks for some sensitive areas. More generally, Google Earth is sometimes seen as a dangerous tool by states where there is political instability.

4.2.2. Researches with Google: when politics prevent from technology innovation

Besides, there is another hot spot concerning Google: the search results. Do search results have to be checked by governments? Is Google totally free from governments? In China, Chinese people cant search some words with Google because the government asked the company to censure some phrases. The example of China also proves political lobbies play an important role. New technology still remains under political forces, even if the will of Google is to be a universal tool. We can suppose that this is due to the gap between different governments. For example, in countries where there are democracy and liberalism, such as in France, there is no censorship. But there are other countries where governments have the takeover on all medias because they want to control information. Google has to consider national laws of each country to develop its technology.

With globalization, firms are more and more powerful, which is a good point for the development of Google. But some laws still stop the development of Google especially with the right of censorship which is still present in many countries.

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When we think about the relation between globalization and Google, we learn that this is more evident in the social field.

4.3.

Social evaluation:

4.3.1. Google in the world: a way to create new communities?

In everyday life, all kinds of relations have increased. Nowadays, it is easier to travel, to have access to information etc. Google plays a fundamental role in this expansion. We can compare the development of globalization and Google. Actually, Google creates new services such as accesses to blogs, websites where you can meet people. Etc. The creation of Gmail is the best example of the strategy of Google to take part in the development of exchange between people in the world. According to market studies, Gmail appears as one of the best mail boxes proposed. With Google, people from different continents can meet and discuss on hobbies or ideas they share. We can say that Google tends to clear cultural and social frontiers between people. Contrary to others means, Google is easy to use. With just one word, anyone can find blogs and forums. Google is also interesting when you search for jobs. Thanks to Google, you can have access to offers to work abroad, you can apply for jobs on different web sites etc.

4.3.1.1.Limits of Google in the social field: Google and Private policy.

At last, the globalization of transfer of information has an important impact on societies concerning protection of private data. Actually, Google is highly criticized by associations because they are accused to harm to privacy. In 2007, Privacy International, a NGO created in 1990, studies many companies concerning their confidentiality policy. The result is that Google got the worst mark for many reasons: IP address are not considered as personal information by the firm Confidentiality policy remains vague Google doesnt consider complaints of its customers.

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Google memorizes all the data you enter when you search a word, when you log to enter in a website. Google keeps personal information during 18-24 months. The problem with globalization is that it creates exchanges between firms which cant always be checked by associations. Besides, Google creates a new tool named Google trends allowing to see statistics concerning researches of people. For example you can know in what town some words have been searched the most. This statistics shows that Google keeps lots of information concerning researches made with its research motor.

4.3.1.2.Google and the development of culture and knowledge

Today, there is a new social and cultural issue which is the treatment of cultural information; Google becomes a new way to have access to culture. Before, people can only have access to culture in places such as libraries, museums etc. Now, with the Internet and the implantation of Google, people can have access to culture more easily because they can stay at home and see pictures they want for example. This can be a way to use Google Image: If you want to see pieces which are in a museum in a foreign country, you can see it with Google image. So, the fact that with globalization, people wants more to learn and to have access rapidly to information is an advantage for Google. Its technology allows answering to new demand of consumers in terms of knowledge.

Nowadays, there are two main trends concerning the relations between globalization, culture and the development of Internet. First, there is a positive aspect because we see that sometimes, governments may ask help from Google to promote culture. Governments are conscious that Google is used by anyone in the world so it can be a very interesting tool to promote a project. For example, in France, the government realises that Google is a real universal media. The Minister of culture, Christine Albanel asked in 2007, October, the 4th, to make suggestions to develop the promotion of the French cultural heritage on the Internet. Google turns to have the role of a consulting agency. To develop this partnership, Christine Albanel met the president of Google France, Mats Carduner. However, many criticisms are opposed to this new access to culture: actually, some explains that this new access is a threat to culture. Free access to culture should not only be displayed by Google. For example, Jean-Nol Jeanneney wrote a book named Quand Google dfie lEurope, plaidoyer pour un 21

sursaut in which he explains that Google is a threat to the protection of cultural heritage. In this book, the author critics the commercial value of culture developed by technology tool like Google. He remains suspicious concerning the will of some firms to give free access to culture for everyone. Therefore we can wonder whether it is possible to globalize access to culture throughout a technology like Google. If we can find quantity of information and references, how can we make the distinction between good and bad sources?

To conclude, globalization doesnt only help Google to succeed. This new technology helps people to create community, to have an access to information and culture. However, the globalization is first of all an economical fact. Politically, Google stills remains under control of national governments. Google makes concrete the fact that with globalization, information exchanges are increasing rapidly. Google is a good social and technological example of globalization; With this technology, boundaries tend to disappear in order to create new groups. Google, in a way, creates a new geography of the world.

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5. Risk ratings
Being a major actor of the internet business makes competitors jealous of your success and you are obviously their first target. Google strategy is studied and analyzed carefully because to its obvious dominant position on the market. Moreover Google is present on many sectors, thanks to its strategy of diversification. So Google has to compete with Yahoo, MSN and AOL on web mail market, with Kelkoo on the products search engine market, with Microsoft Office and also with Paypal. And having all these competitors is a real threat because most of these companies are specialists of these markets. As a result, they have stronger investments and more resources dedicated to R&D in order to protect their core business. And Google is attacking these companies on their market. (One can remark that on the other hand Google does not put all its eggs in the same basket!)

The image of the company is rather good for the moment but as many services are based on advertisement, customers perception of Google could change. For example, we can remark that your emails on Gmail are scanned in order to provide you with personalized advert. Other confidentiality issues could come up with iGoogle that makes you personally recognized by Google when surfing on the web. A link is created between your email address, your web researches, the news you read, your personal calendar online and all the Google services. In fact, to sum up, the problematic is quite simple, the better Google knows you, the better it is for adverts, and so the worse it is for your confidentiality! That is the reason why a scandal regarding confidentiality issues could strongly hurt Googles image and business in the same time. And Google is going quite far to know better its users. To illustrate this, have a look to the picture below that show that Google is studying where your eyes are going when using their search engine.

Google philosophy, described on the corporate information page explained that Google is a company 23

which is doing business but Do No Evil. They underlines that money will never make them forget their core values such as ethics. But it seems hard to agree with this if you take the example of the Chinese massacre of Tiananmen: if you are looking for pictures from the Chinese version of Google, you will find these pictures:

But if you are doing this research with the US version, you will find pictures of the massacre:

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This illustrates the difficulties Google has to face to keep their business, because they could be tempted to do concessions regarding their philosophy for business reasons (confidentiality on the advertising market for example) but they should absolutely not yield to temptation because in the same time Google services are based on users confidence into them. So we all understand that Googles image is a force today but it is also a big risk. They are very dependent of their image.

Not so far from this risk, Google recognize in its last quarterly financial report released on June 30th that they could be subject to intellectual property rights claims, which are costly to defend, could require [them] to pay damages and could limit [their] ability to use certain technologies in the future. Indeed certain entities have also filed copyright claims against [them]; alleging that features of certain of [their] products and services, including Google Web Search, Google News, Google Video, Google Image Search, and Google Book Search, infringe their rights. For example, Viacom, which own US TV channels such as MTV or Comedy Channel, is suing Google to obtain $1 billion fine because of piracy on YouTube (recently acquired by Google). 150,000 videos were illegal, and they have been watched by 1.5 billion people all around the world at this time.

As Google also admits in its last quarterly report, the company results may fluctuate because they rely on a number of factors, many outside of their control. For example, as Google business is largely generated by advertisings on their web sites, they depend on the advertising market. If the prices of advertisements are decreasing for any reason, Google would not have so much power to limit this tendency. Moreover, Google results also depend on results of companies that are spending on advertising. If some of these companies are starting to lose money, one the first cost cut will be the advertising budget, affecting Google business in the same time.

Other issues Google could have to face are the poor results of their investments in risky projects. Google has the image of a dynamic and original company; this is due to its investment on risky projects. We mean here Google Book Search, Google Moon and Google Mars (services, equivalent of Google Earth but for the 25

Moon and Mars!) are good example of these risky projects in which Google is investing. This business model has some similarities with Richard Bransons firm, Virgin, which has launched a huge number of activities, on very different markets. We only remember the great successes, but there are also some losses. Googles problematic has some similarities with Virgin because these companies invest on risky projects and they need to have a good ratio of successes versus failures.

To conclude, risk is inherent to Google business because it is settled in a rapidly evolving industry, as a result, the company is concerned about keeping up with rapid technological change to remain competitive. Google increasingly needs systems that are less likely to fail than those it uses for its search engine in order to handle important information, like e-mail and payments in its new Google Checkout service. Building out its infrastructure is one of the challenges Google has to face to maintain its competitive advantage. Internet businesses are moving so quickly.

Sources:
www.google.com (corporate info and investors relations) Journal du Net www.zdnet.fr www.xiti.com Google annual report 2006 AFP http://www.dossiersdunet.com/article614.html Numro de Politique dat d'octobre 2006. http://www.google-stories.com/ http://searchenginewatch.com/showPage.html?page=3302741 Google Quarterly financial report, release on June 30th http://www.theregister.co.uk/ New York Times www.cetic.be

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