INTRODUCTION

Google is an American multinational public corporation invested in Internet search,

cloud computing, and advertising technologies. Google hosts and develops a
number of Internet-based services and products, and generates profit primarily from
advertising through its Ad Words program. The company was founded by Larry
Page and Sergey Brin, often dubbed the "Google Guys", while the two were
attending Stanford University as Ph.D. candidates. It was first incorporated as a
privately held company on September 4, 1998, and its initial public offering followed
on August 19, 2004. At that time Larry Page, Sergey Brin, and Eric Schmidt agreed
to work together at Google for twenty years, until the year 2024. The company's
stated mission from the outset was "to organize the world's information and make
it universally accessible and useful", and the company's unofficial slogan coined by
Google engineer Paul Buchheit is" Don't be evil". In 2006, the company moved to
their current head quarters in Mountain View, California. Google runs over one
million servers in data centers around the world, and processes over one billion
search requests and about twenty-four peta bytes of user-generated data every
day .Google's rapid growth since its incorporation has triggered a chain of
products, acquisitions, and partnerships beyond the company's core web search
engine. The company offers online productivity software, such as its Gmail email
service, and social networking tools, including Orkut and, more recently, Google
Buzz. Google's products extend to the desktop as well, with applications such as
the web browser Google Chrome, the Picasa photo organization and editing
software, and the Google Talk instant messaging application. Notably, Google leads
the development of the Android mobile phone operating system, used on a number
of phones such as the Nexus One and Motorola Droid. Alexa lists the main U.S.focused google.com site as the Internet's most visited website, and numerous
1

international Google sites (google.co.in, google.co.uk etc.) are in the top hundred,
as are several other Google-owned sites such as You Tube, Blogger, and Orkut.
Google is also Brands most powerful brand in the world.
HISTORY OF GOOGLE
"Google History" redirects here. For the feature offered by Google, see Google
Web History.

Google's homepage 19981999

This article covers the history of Google, the most widely used web-based search
engine.

EARLY HISTORY

Larry Page and Sergey Brin in 2003

Google began in March 1996 as a research project by Larry Page and Sergey Brin,
Ph.D. students at Stanford working on the Stanford Digital Library Project
(SDLP). The SDLP's goal was to develop the enabling technologies for a single,
integrated and universal digital library" and was funded through the National
Science Foundation among other federal agencies. In search for a dissertation
theme, Page consideredamong other thingsexploring the mathematical
properties of the World Wide Web, understanding its link structure as a huge graph.
His supervisor Terry Wino grad encouraged him to pick this idea (which Page later
recalled as "the best advice I ever got") and Page focused on the problem of
finding out which web pages link to a given page, considering the number and
nature of such back links to be valuable information about that page (with the role
of citations in academic publishing in mind). In his research project, nicknamed
"Back Rub", he was soon joined by Sergey Brin, a fellow Stanford Ph.D. student
supported by a National Science Foundation Graduate Fellowship. Brin was
already a close friend, whom Page had first met in the summer of 1995 in a group
3

of potential new students which Brin had volunteered to show around the campus.
Page's web crawler began exploring the web in March 1996, setting out from
Page's own Stanford home page as its only starting point. To convert the back link
data that it gathered into a measure of importance for a given web page, Brin and
Page developed the Page Rank algorithm. Analyzing Back Rub's outputwhich,
for a given URL, consisted of a list of back links ranked by importanceit
occurred to them that a search engine based on Page Rank would produce better
results than existing techniques (existing search engines at the time essentially
ranked results according to how many times the search term appeared on a page).
A small search engine called "Rank Dex" from IDD Information Services (a
subsidiary of Dow Jones) designed by Robin Li was, since 1996, already exploring
a similar strategy for site-scoring and page ranking. The technology in Rank Dex
would be patented and used later when Li founded Baidu in China.
Convinced that the pages with the most links to them from other highly relevant
Web pages must be the most relevant pages associated with the search, Page and
Brin tested their thesis as part of their studies, and laid the foundation for their
search engine. By early 1997, the backrub page described the state as follows:
Some Rough Statistics (from August 29th, 1996)
Total indexable HTML urls: 75.2306 Million
Total content downloaded: 207.022 gigabytes
BackRub is written in Java and Python and runs on several Sun Ultras and Intel
Pentiums running Linux. The primary database is kept on an Sun Ultra II with
28GB of disk. Scott Hassan and Alan Steremberg have provided a great deal of
very talented implementation help. Sergey Brin has also been very involved and
deserves many thanks.
4

Originally the search engine used the Stanford website with the domain
google.stanford.edu. The domain google.com was registered on September 15,
1997. They formally incorporated their company, Google Inc., on September 4,
1998 at a friend's garage in Menlo Park, California.
Both Brin and Page had been against using advertising pop-ups in a search engine,
or an "advertising funded search engines" model, and they wrote a research paper
in 1998 on the topic while still students. However, they soon changed their minds
and early on allowed simple text ads.

GOOGLE HOME PAGE SEPTEMBER 1998

By the end of 1998, Google had an index of about 60 million pages. The home
page was still marked "BETA", but an article in Salon.com already argued that
Google's search results were better than those of competitors like Hotbot or
Excite.com, and praised it for being more technologically innovative than the
overloaded portal sites (like Yahoo!, Excite.com, Lycos, Netscape's Netcenter,
AOL.com, Go.com and MSN.com) which at that time, during the growing dot-com
bubble, were seen as "the future of the Web", especially by stock market investors.
In March 1999, the company moved into offices at 165 University Avenue in Palo
Alto, home to several other noted Silicon Valley technology startups. After quickly
outgrowing two other sites, the company leased a complex of buildings in
Mountain View at 1600 Amphitheatre Parkway from Silicon Graphics (SGI) in
2003. The company has remained at this location ever since, and the complex has
since become known as the Google plex (a play on the word googolplex, a number
that is equal to 1 followed by a googol of zeros). In 2006, Google bought the
property from SGI for $319 million.
The Google search engine attracted a loyal following among the growing number
of Internet users, who liked its simple design. In 2000, Google began selling
advertisements associated with search keywords. The ads were text-based to
maintain an uncluttered page design and to maximize page loading
speed.Keywords were sold based on a combination of price bid and click-through,
with bidding starting at $.05 per click.This model of selling keyword advertising
was pioneered by Goto.com (later renamed Overture Services, before being
acquired by Yahoo! and rebranded as Yahoo! Search Marketing).[20][21][22] While
6

many of its dot-com rivals failed in the new Internet marketplace, Google quietly
rose in stature while generating revenue.
Google's declared code of conduct is "Don't be evil", a phrase which they went so
far as to include in their prospectus (aka "S-1") for their 2004 IPO, noting that "We
believe strongly that in the long term, we will be better servedas shareholders
and in all other waysby a company that does good things for the world even if
we forgo some short term gains."
ADVANTAGES AND DISADVANTAGES OF GOOGLE WEBSITE
The advantages of Google Sites:
1.Free
2.Fast and easy to edit
3.No programming or database skills required
4.Ideal for newbie who wants to build a website for the first time
5.No software installation required
6.Integrated with Google apps
7.Creator can access tools anywhere
8.Creator has full control on page access and permission
9.Function as a basic project manager

The disadvantages of Google Sites:

7

1. Limited functionality compared to other website builders

2.

Not

really

good

website

for

business

not

enough

customization
3. Apps only limited to Google apps only. Apps outside Google
apps may be inapplicable
FINANCING AND INITIAL PUBLIC OFFERING
The first funding for Google as a company was secured on August 1998 in the
form of a $100,000USD contribution from Andy Bechtolsheim, co-founder of Sun
Microsystems, given to a corporation which did not yet exist.
On June 7, 1999, a round of equity funding totaling $25 million was announced;
the major investors being rival venture capital firms Kleiner Perkins Caufield &
Byers and Sequoia Capital.
While Google still needed a lot of funding for their further expansion, Brin and
Page were hesitant to take the company public even though that would basically
solve most of their financial issues. They were not ready to give up their control
over Google. After borrowing the $25 million venture capital money from Kleiner
Perkins Caufield & Byers and Sequoia Capital, Sequoia forced Brin and Page to
hire a CEO or else they would take back that borrowed $12.5 million. Finally, Brin
and Page gave in and hired Eric Schmidt as Googles first CEO in March 2001 and
the company went public three years later.
In October 2003, while discussing a possible initial public offering of shares (IPO),
Microsoft approached the company about a possible partnership or merger.
However, no such deal ever materialized. In January 2004, Google announced the
8

hiring of Morgan Stanley and Goldman Sachs Group to arrange an IPO. The IPO
was projected to raise as much as $4 billion.
On April 29, 2004, Google made an S-1 form SEC filing for an IPO to raise as
much as $2,718,281,828. This alludes to Google's corporate culture with a touch of
mathematical humor as e 2.718281828. April 29 was also the 120th day of 2004,
and according to section 12(g) of the Securities Exchange Act of 1934, "a company
must file financial and other information with the SEC 120 days after the close of
the year in which the company reaches $10 million in assets and/or 500
shareholders, including people with stock options." Google has stated in its annual
filing for 2004 that every one of its 3,021 employees "except temporary employees
and contractors, are also equity holders, with significant collective employee
ownership", so Google would have needed to make its financial information public
by filing them with the SEC regardless of whether or not they intended to make a
public offering. As Google stated in the filing, their "growth has reduced some of
the advantages of private ownership. By law, certain private companies must report
as if they were public companies. The deadline imposed by this requirement
accelerated our decision." The SEC filing revealed that Google turned a profit
every year since 2001 and earned a profit of $105.6 million on revenues of $961.8
million during 2003.

GROWTH
9

The first iteration of Google production servers was built with inexpensive
hardware and was designed to be very fault-tolerant
In February 2003, Google acquired Pyra Labs, owner of Blogger, a pioneering and
leading web log hosting website. Some analysts considered the acquisition
inconsistent with Google's business model. However, the acquisition secured the
company's competitive ability to use information gleaned from blog postings to
improve the speed and relevance of articles contained in a companion product to
the search engine Google News.
At its peak in early 2004, Google handled upwards of 84.7% of all search requests
on the World Wide Web through its website and through its partnerships with other
Internet clients like Yahoo!, AOL, and CNN. In February 2004, Yahoo! dropped its
partnership with Google, providing an independent search engine of its own. This
cost Google some market share, yet Yahoo!'s move highlighted Google's own
distinctiveness, and today the verb "to google" has entered a number of languages
(first as a slang verb and now as a standard word), meaning "to perform a web
search" (a possible indication of "Google" becoming a genericized trademark).

10

The Relationship Between Google, Baidu, And Yahoo

After the IPO, Google's stock market capitalization rose greatly and the stock price
more than quadrupled. On August 19, 2004 the number of shares outstanding was
172.85 million while the "free float" was 19.60 million (which makes 89% held by
insiders). In January 2005 the number of shares outstanding was up 100 million to
273.42 million, 53% of that was held by insiders, which made the float 127.70
million (up 110 million shares from the first trading day). The two founders are
said to hold almost 30% of the outstanding shares. The actual voting power of the
insiders is much higher, however, as Google has a dual class stock structure in
which each Class B share gets ten votes compared to each Class A share getting
one. Page says in the prospectus that Google has "a dual class structure that is
biased toward stability and independence and that requires investors to bet on the
team, especially Sergey and me." The company has not reported any treasury stock
holdings as of the Q3 2004 report.
On June 1, 2005, Google shares gained nearly four percent after Credit Suisse First
Boston raised its price target on the stock to $350. On that same day, rumors
circulated in the financial community that Google would soon be included in the
S&P 500. When companies are first listed on the S&P 500 they typically
experience a bump in share price due to the rapid accumulation of the stock within
11

index funds that track the S&P 500. The rumors, however, were premature and
Google was not added to the S&P 500 until 2006. Nevertheless, on June 7, 2005,
Google was valued at nearly $52 billion, making it one of the world's biggest
media companies by stock market value.
On August 18, 2005 (one year after the initial IPO), Google announced that it
would sell 14,159,265 (another mathematical reference as 3.14159265) more
shares of its stock to raise money. The move would double Google's cash stockpile
to $7 billion. Google said it would use the money for "acquisitions of
complementary businesses, technologies or other assets".
On September 28, 2005, Google announced a long-term research partnership with
NASA which would involve Google building a 1,000,000-square-foot (93,000 m2)
R&D center at NASA's Ames Research Center, and on December 31, 2005 Time
Warner's AOL unit and Google unveiled an expanded partnershipsee
Partnerships below.
Additionally in 2005, Google formed a partnership with Sun Microsystems to help
share and distribute each other's technologies. As part of the partnership Google
will hire employees to help in the open source office program OpenOffice.org.
With Google's increased size came more competition from large mainstream
technology companies. One such example is the rivalry between Microsoft and
Google. Microsoft had been touting its Bing search engine to counter Google's
competitive position. Furthermore, the two companies are increasingly offering
overlapping services, such as webmail (Gmail vs. Hotmail), search (both online
and local desktop searching), and other applications (for example, Microsoft's
Windows Live Local competes with Google Earth). In addition to an Internet
12

Explorer replacement Google designed its own Linux-based operating system

called Chrome OS to directly compete with Microsoft Windows. There were also
rumors of a Google web browser, fueled much by the fact that Google is the owner
of the domain name "gbrowser.com". These were later proven when Google
released Google Chrome. This corporate feud is most directly expressed in hiring
offers and defections. Many Microsoft employees who worked on Internet
Explorer had left to work for Google. This feud boiled over into the courts when
Kai-Fu Lee, a former vice-president of Microsoft, quit Microsoft to work for
Google. Microsoft sued to stop his move by citing Lee's non-compete contract (he
had access to much sensitive information regarding Microsoft's plans in China).
Google and Microsoft reached a settlement out of court on December 22, 2005, the
terms of which are confidential.
Click fraud has also become a growing problem for Google's business strategy.
Google's CFO George Reyes said in a December 2004 investor conference that
"something has to be done about this really, really quickly, because I think,
potentially, it threatens our business model." Some have suggested that Google is
not doing enough to combat click fraud. Jessie Stricchiola, president of Alchemist
Media, called Google "the most stubborn and the least willing to cooperate with
advertisers", when it comes to click fraud.
While the company's primary market is in the web content arena, Google has also
recently began to experiment with other markets, such as radio and print
publications. On January 17, 2006, Google announced that it had purchased the
radio advertising company dMarc, which provides an automated system that allows
companies to advertise on the radio. This will allow Google to combine two
advertising mediathe Internet and radiowith Google's ability to laser-focus on
13

the tastes of consumers. Google has also begun an experiment in selling

advertisements from its advertisers in offline newspapers and magazines, with
select advertisements in the Chicago Sun-Times. They have been filling unsold
space in the newspaper that would have normally been used for in-house
advertisements.
During the third quarter 2005 Google Conference Call, Eric Schmidt said, "We
don't do the same thing as everyone else does. And so if you try to predict our
product strategy by simply saying well so and so has this and Google will do the
same thing, it's almost always the wrong answer. We look at markets as they exist
and we assume they are pretty well served by their existing players. We try to see
new problems and new markets using the technology that others use and we build."
After months of speculation, Google was added to the Standard & Poor's 500 index
(S&P 500) on March 31, 2006. Google replaced Burlington Resources, a major oil
producer based in Houston that had been acquired by ConocoPhillips. The day
after the announcement Google's share price rose by 7%.
Over the course of the past decade, Google has become quite well known for its
corporate culture and innovative, clean products, and has had a major impact on
online culture.

NAME
The name "Google" originated from a misspelling of "googol", which refers to the
number represented by a 1 followed by one-hundred zeros. Page and Brin write in
14

their original paper on PageRank: "We chose our systems name, Google, because it
is a common spelling of googol, or 10100 and fits well with our goal of building
very large-scale search engines."
However, there are uses of the name going back at least as far as the creation of the
comic strip character Barney Google in 1919. Enid Blyton used the phrase "Google
Bun" in The Magic Faraway Tree (published 1941) The Folk of the Faraway Tree
(published 1946), and called a clown character "Google" in Circus Days Again
(published 1942). There is also the Googleplex Star Thinker from Douglas Adams'
The Hitchhiker's Guide to the Galaxy. In March 1996 a business called Groove
Track Productions applied for a United States trademark for "Google" for various
products including several categories of clothing, stuffed toys, board games, and
candy. The firm abandoned its application in July 1997.
Having found its way increasingly into everyday language, the verb "google" was
added to the Merriam Webster Collegiate Dictionary and the Oxford English
Dictionary in 2006, meaning "to use the Google search engine to obtain
information on the Internet." The use of the term itself reflects their mission to
organize a seemingly infinite amount of information on the web. In November
2009, the Global Language Monitor named "Google" No. 7 on its Top Words of the
Decade list. In December 2009 the BBC highlighted Google in their "Portrait of
the Decade (Words)" series. In May 2012, David Elliott filed a complaint against
Google, Inc. claiming that Googles once distinctive mark GOOGLE has become
generic and lacks trademark significance due to its common use as a transitive
verb. After losing to Google in UDRP proceedings involving many Googlerelated domain name registrations that he owns, Elliott now seeks a declaratory
judgment that his domain names are rightfully his, that they do not infringe any
trademark rights Google may own, and that all Googles registered GOOGLE
15

marks should be cancelled since google is now a common generic word

worldwide that means to search the Internet.
PHILANTHROPY
In 2004, Google formed a non-profit philanthropic wing, Google.org, giving it a
starting fund of $1 billion. The express mission of the organization is to help with
the issues of climate change (see also global warming), global public health, and
global poverty. Among its first projects is to develop a viable plug-in hybrid
electric vehicle that can attain 100 mpg.
ACQUISITIONS
Since 2001, Google has acquired several small companies, often consisting of
innovative teams and products. One of the earlier companies that Google bought
was Pyra Labs. They were the creators of Blogger, a weblog publishing platform,
first launched in 1999. This acquisition led to many premium features becoming
free. Pyra Labs was originally formed by Evan Williams, yet he left Google in
2004. In early 2006, Google acquired Upstartle, a company responsible for the
online collaborative word processor, Writely. The technology in this product was
combined with Google Spreadsheets to become Google Docs & Spreadsheets.

The logo of YouTube, which in late 2006 was acquired by Google.

16

On October 9, 2006, Google announced that it would buy the popular online video
site YouTube for $1.65 billion and maintain YouTube as a separate brand, rather
than merging it with Google Video. Meanwhile, Google Video signed an
agreement with Sony BMG Music Entertainment and the Warner Music Group, for
both companies to deliver music videos to the site. The deal was finalized by
November 13, 2006.
On October 31, 2006, Google announced that it had purchased JotSpot, a company
that helped pioneer the market for collaborative, web-based business software to
bolster its position in the online document arena.
On March 17, 2007, Google announced its acquisition of two more companies. The
first is Gapminder's Trendalyzer software, a company that specializes in
developing information technology for provision of free statistics in new visual and
animated ways On the same day, Google also announced its acquisition of Adscape
Media, a small in-game advertising company based in San Francisco, California.
Google also acquired PeakStream Technologies. On May 22, 2012, Google
acquired Motorola Mobility for $12.5 billion.

PARTNERSHIPS
Google has worked with several corporations, in order to improve production and
services. On September 28, 2005,Google announced a long-term research
partnership with NASA which would involve Google building a 1,000,000-squarefoot (93,000 m2) R&D center at NASA's Ames Research Center. NASA and
17

Google are planning to work together on a variety of areas, including large-scale

data management, massively distributed computing, bio-info-nano convergence,
and encouragement of the entrepreneurial space industry. The new building would
also include labs, offices, and housing for Google engineers. In October 2006,
Google formed a partnership with Sun Microsystems to help share and distribute
each other's technologies. As part of the partnership Google will hire employees to
help the open source office program OpenOffice.org.
Time Warner's AOL unit and Google unveiled an expanded partnership on
December 21, 2005, including an enhanced global advertising partnership and a $1
billion investment by Google for a 5% stake in AOL. As part of the collaboration,
Google plans to work with AOL on video search and offer AOL's premium-video
service within Google Video. This did not allow users of Google Video to search
for AOL's premium-video services. Display advertising throughout the Google
network will also increase.
In August 2006, Google signed a $900 million offer with News Corp.'s Fox
Interactive Media unit to provide search and advertising on MySpace and other
News Corp. websites including IGN, AmericanIdol.com, Fox.com, and Rotten
Tomatoes, although Fox Sports is not included as a deal already exists between
News Corp. and MSN.
On December 6, 2006, British Sky Broadcasting released details of a Sky and
Google alliance. This includes a feature where Gmail will link with Sky and host a
mail service for Sky, incorporating the email domain "@sky.com".
In 2007, Google displaced America Online as a key partner and sponsor of the
NORAD Tracks Santa program. Google Earth was used for the first time to give
18

visitors to the website the impression that they were following Santa Claus'
progress in 3-D. The program also made its presence known on YouTube in 2007
as part of its partnership with Google.
In January 2009, Google announced a partnership with the Pontifical Council for
Social Communications, allowing the Pope to have his own channel on YouTube.
In January 2013, Google announced a partnership with Kia Motors and Hyundai.
The partnership integrates Google Maps and Place into new car models to be
released later in 2013.
GOOGLES SUCCESS
While other companies were busy cramming the most ads possible on their
homepages or squeezing every last hour of productivity out of employees, Google
created an enjoyable experience for every party involved in the company including
users, employees, and investors. Googles success has come as a direct result of
keeping people happy

EXTERNAL ANALYSIS
E X T E R N A L E N V I R O N M E N T GLOBAL
Internet search is applicable to most cultures all over the world freeing Google
from geographic dependence. In fact, the company now has 20 offices in the U.S.
and international locations in over30 countries working on research, sales, and
19

marketing (Google, 2008). Google offers a personalized search engine for more
than 115 countries, and as language support improves, the company is likely to
gain market share. As computers become more affordable, many people in
economically disadvantaged countries are gaining access to the internet for the first
time and Google would like to route them through its search and productivity
products, like Gmail, Docs, and Sites. Googles web applications are now bundled
into the operating system on low-cost Linux-based computers (Blankenhorn,
2008).
DEMOGRAPHICS
Google is well positioned in demographics because it has a relatively young user
base. This means that it will be less affected as the Baby Boomers age in
comparison to other companies that depend on the 50 to 60 year-old demographic
group. Internet search is also not a gender-specific issue, and would not be hurt by
changes in the ratio of female to males. The company will however benefit when
some traditional and paternalistic societies begin using the internet more
frequently.

TECHNOLOGY
Technology is obviously always improving and Google has taken specific
measures to make sure it does not fall behind. Google can use commodity
computer parts (cheap components) knowing they will fail by ensuring that every
component always has a duplicate. The components are attached to the computer
20

with Velcro rather than screws which allows for quick swapping and upgrading
(May,2007).
ECONOMIC
The United States is currently in a period of recession and stocks are trading at 52week lows. However, technology companies like Google are relatively isolated
because search and consequently internet-based advertisements have become a
staple to the world society and economy. In fact, a recent wired magazine article
says that Google looks particularly well-positioned to weather the downturn.
Google's focus on highly targeted, measurable advertising makes it more recessionproof than many other businesses in tech. (Schiffman, 2008) The crucial need to
stay informed and constantly connected keeps such services vibrant despite the
parched surroundings.
POLITICAL AND LEGAL
Formal institutions have not significantly affected Googles operations, although
Google has faced pressure from the Department of Justice to relinquish archived
search terms (Buncombe, 2006) and from the Chinese government to censor search
results (Liedtke, 2005). Googles Dont be evil mantra has been put to the test as
users ask whether cooperation with governments undermines their privacy and
freedoms. In 2008, Google responded to customer concerns when it added a
privacy link to its home page. This link took users to a Privacy Center where they
could learn about Googles policies in regard to political and legal issues (Google,
2008).Google has also faced concern on copyright issues because the company
stores copies of third party web pages and images on their servers. They have
responded to this criticism by releasing a copyright information page. The page
provides the relevant information regarding digital information and provides links
21

to notify both Google and the U.S. Copyright Office of suspected infringement
(Google, 2008).
SOCIO-CULTURAL
The world is increasingly becoming more connected due to the means of
communication available through the internet. And, for many people, the search
giants like Google make the internet navigable. As internet use increases among all
age groups and across all cultures, we will become increasingly more dependent on
internet search. In addition, most new cell phones are internet capable devices.
People will use these devices for driving directions, to locate restaurants, check
sports scores, download music, and even quick research. Google stands to benefit
from this with an increased number of search queries. To enable more people to
access Googles services from their mobile devices, the company has released its
Android Mobile Phone Platform and Operating System as well as the Google
Mobile App that can be downloaded on other platforms such as the Apple iPhone.
Android Mobile Phone Platform and Operating System as well as the Google
Mobile App that can bedownloaded on other platforms such as the Apple iPhone.

STAKEHOLDERS
Stakeholder Importance Google has a responsibility to manage its operations for
the benefit of its stakeholders. Stakeholders include not only the shareholders of
the companys stock, but also the employees, customers, suppliers, trade
22

associations, and community. Google decisions may be influenced by the

government, activist groups, and the media, all who have their own agendas and
responsibilities to the people they serve. Each stakeholder has a relationship with
Google and this relationship is the source of the stakeholders power to affect
Googles decisions. Googles distributed business model ensures that no
stakeholder has a level of importance that could singly change the direction of the
company, but the way that the mass of web users, media, and governments
interpret their activity could influence the companys objectives. It is Googles
managements job to ensure the survival of the firm and the long-term benefits of
the stakeholders. Litigation and politics often have an effect on both the short-term
and long-term results and that is why it is important to be vigilant of the external
environment. Some stakeholders have conflicting claims, such as the users right to
information and the governments responsibility to protect information or
consequently, the users right to privacy and the governments right to access
records. Management is tasked to weigh the seriousness of each claim and decide
which outcome will best benefit the majority of their stakeholders.

P O RTE R S 5 F O R C E S AN A LYS I S
Porters 5 Forces analysis is a framework for industry analysis and business
strategy development relative to the competitors of the firm (QuickMBA, 2007).

23

POTENTIAL NEW ENTRANTS

The barriers to entry in the internet search market are high. The current competitors
have thousands of servers deployed in locations all over the world and have
accumulated many years worth of data about user habits. A new entrant would
need to provide better search results at very fast speeds to compete in this highly
competitive market. With that in mind, it must be recognized that when Google
was founded in 1998, Yahoo, Excite, and Altavista dominated the search
market and Google has since eclipsed them all (Viney, 2007). The market now,
however, is more mature with a necessary path dependency to gather data on both
the content of web pages and the search history of users. Therefore, the threat of
new entrants in the internet search market is relatively low.
SUPPLIERS
Googles ad system is a reliable source of income because both the ad-making
partner and ad-receiving individual are both customers of Googles. So as long as
Google maintains its market dominance with the search product, supplier
bargaining power will remain low. Googles cost of revenue as a percentage of
sales in 2007 was 40% (Google, 2007). This number is the same for Yahoo
(Google, 2007) suggesting that both companies are equally efficient at maintaining
supplier-seller collaboration.

CURRENT COMPETITORS
Googles stated goal is to organize the worlds information (Google, 2008), and
to merit they have created many complimentary products to their main internet
search service. Targeted advertisements based on the information they collect with
their products are Googles primary source of revenue. In 2007, Google had
24

revenues of $16.6 billion which grew an average of 115%annually in the preceding

five years (Google, 2008)
CUSTOMERS
As of 2007, 99% of Googles revenues are derived from advertising (Google,
2008). However, 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 (Google
Inc., 2007). This means that no single buyer has a controlling interest. In Googles
system many advertisers bid on keywords. Popular key words like Dallas Texas
are sold for much higher value-per-click through than obscure topics
(Google,2008). This distributed approach allows Google to attract both large
companies and small mom-and-pop shops keeping buyer power low.

INTERNAL ANALYSIS
M I S S I O N S TATE M E N T
Googles mission, to organize the worlds information and make it universally
accessible and useful (Google, 2008), speaks to their goals, but does not reflect
the way they earn a profit. The statement definitely gives the company a future to
25

strive towards, as it will be quite some time before all of the worlds information is
easily accessible even though they have made great strides. The mission statement
sets the company up as a resource that would be used by anyone who was doing
research whether as part of a thesis or just a question out of curiosity. The mission
statement doesnt give a timeline, it only states the end result. The mission
statement is broad enough that it allows for Google to use any means possible to
organize information. This means that they are neither limited to search nor are
they limited to using the internet in its current form. The mission statement is
graphic because it gives a sense of the scale of the endeavor in its bold declaration
to organize the worlds information and become universally accessible. This
definite goal with a strong focus gives the statement direction and flexibility as it
does not specify the means, leaving lenient room in the respect of the physical
products the company will produce. All the worlds information could never be
made searchable or categorized because some data is private and other data is not
defined in a computer readable form. However, even though the mission statement
isnt strictly feasible, it is desirable, motivational, and long-lasting. Googles
mission statement is quite distinctive and original because the scope of the project
is much larger and more long-term than most other companies would aspire
towards. It is complete in the sense that the goal is not just to organize information,
but also to make it accessible and useful.

26

The statement is forthright in understanding the boon and the banes of

advertisements to search engine users in its suggestions that advertisements
should not be an annoying interruption(Google Inc., 2007) Figure 4 displays the
difference between the homepage of the top competitors in the search industry.
Google has long held a very human-centric point-of-view, and their mission
statement reflects their dedication to user experience in their promise to provide
the most relevant and useful search resultsindependent of financial incentives
(Google Inc., 2007). Google is quick to recognize that customer faith will provide
the basis for increased traffic and strong word-of-mouth promotion (Google Inc.,
2007).
The mission statement will probably not change either through the actions of
competitors or through a changing external environment. Information retrieval is
likely to only become more important in the future and therefore Google has set
itself up well with the long-term vision of their mission statement.

27

F I N A N C I A L AN A LYS I S
Google is a relatively young company that has been public since August 2004. At
that time, a share of the stock sold for a paltry $85. By late 2007, the stock had
reached a high of around $750, a whopping 882% return in 3 years (Google, 2008).
The shares have now dropped down to the high$300 range (Google, 2008) due to
the recession the United States is currently experiencing. Google derives
approximately 99% of its revenue from advertising (Google, 2008). Most of its
online products are free to use and are supported by text ads that are displayed
within the interface (Google Inc., 2007). This begs the question of whether Google
has a sustainable business model if in the future people begin to ignore internetbased advertisements. Financially Google is in much better shape than its main
competitor, Yahoo. Google has about 2.4times the revenue of Yahoo (Appendix B),
but common size ratios allow comparison of the two. Google has a much higher
Income from Continuing Operations/Sales ratio (Appendix B), which indicates that
Google is more profitable than Yahoo. The two companies have a roughly
equivalent Cost of Goods Sold/Revenue ratio at 40%, but Googles Liabilities
/Total Assets ratio is half of Yahoos indicating that Google is managing their debt
better. Googles Return on Assets shines as well at 23.2% versus Yahoo!s 5.9%
(Appendix B).Keeping in mind the facts mentioned in the previous paragraph,
Google slowed down by the end of the 2007 fiscal year. The growth ratios such as
Sales Growth, Income Growth, Asset Growth were all down from 2006 (Appendix
A). In addition the Activity ratios of Receivable Turnover and Fixed Asset
Turnover were also down slightly (Appendix A). Profit margin and Return on
Assets were also down, but still at healthy levels. These numbers do not mean that
Google is in trouble; after all, they are still much higher than Yahoo!s ratios. What
they mean is that Google is moving out of its explosive, exponential growth and it
will eventually settle at a more steady growth rate if their business model remains
28

successful. No company can sustain a greater than 50% growth rate for too many
years in a row. Googles spectacular growth is shown in the charts in Appendix C.
In the past 5 years revenue has grown from $1.47 billion to $16.59 billion. In the
Net Income Trend Graph, the revenue growth is pleasantly tracked by the net
income. Google is not a seasonal or a cyclical company, because its services are
constantly desired. Appendix D shows that Google has not yet had a quarter where
income or revenue was below the previous quarters reported numbers. Since the
fourth quarter has not yet been reported for 2008, the Current Year Quarterly Stock
Prices table in Appendix D shows fiscal year 2007 numbers. As stated earlier,
Googles stock performed remarkably through the end of 2007 and the Quarterly
Stock Highs and Lows graph showcases that continued growth (Appendix D).

Figure 5. Googles Value Chain

Googles primary activities in its value chain are heavily dependent on the support
activities of administration and human resources (Figure 5). Google has always
tried to hire the most qualified and competent individuals to ensure that it excels at
the research and development of its technology and systems. In fact the company
29

often gives aptitude challenges and tests to help recruiters sift through the massive
amounts of resumes they receive (Kopytoff, 2005).Next to the employees, a large
percentage of the cost structure is the infrastructure and systems. Googles servers
and internal software allow it to conduct operations, distribution, sales, and service.
Each activity contributes to the value chain by increasing the profit of the firm.
Google has locations all over the world (Google, 2008) to localize distribution,
marketing, and service which in turn ensures maximum profit on a global scale.
Profit is maximized by the companys cultural awareness and social competence to
tailor products to the regional needs of its users. By shifting activities
geographically, Google can also take advantage of diversity from a human
resources perspective and also perhaps lower salaries in countries other than the
United States. Google has even begun outsourcing some of its copywriting to firms
in India (Baker, 2006).Google uses advanced analytics to measure the efficiency of
its supply chain (the web users). This data about the history of its users is important
because it helps Google improve its search algorithms and advertising interface.
New technology and word-of-mouth promotion by its loyal users can bring in new
customers and thereby increase the profit margin.
C O M P E T I T I V E AD VAN TAG E S
Google has sustainable competitive advantages because the remarkable scores
accrued in measures of value, rarity, immutability, and substitutability.
VALUE
Googles search products bring value to their customers because they provide
relevant web sites promptly. Google has achieved the top market share in the
search industry precisely because their product is rare. They are able to provide
excellent links in the first few results for both well-known subjects such as Dallas
30

Cowboys and uncommon, long-tail searches like cerebrospinal fluid. As

mentioned in the Value Chain section, Google excels at directing a large quantity
of visitors to websites using its Ad Sense program. Many business are dependent
upon the traffic Ad Sense brings to their website to generate income. For the
advertisers this increased traffic translates into increased sales and directly helps
the bottom line.
RARITY
Googles search offerings are rare because of the relevancy of the results.
Microsoft and Yahoo, Googles main competitors, simply do not provide links that
are as useful as Googles. Googles website features a minimalistic design, which
is uncommon. Most websites feature some sort of banner advertising and are
littered with hundreds of words. The Google home page can only contain 28 words
as a policy established Sergey Brin and Larry Page, the companys founders. This
keeps the clutter to a minimum which is a stark contrast to Yahoo and Microsofts
search homepages. Google faithfully adheres to the provision in the mission
statement which recognizes that advertisements should not be an annoying
interruption (Google Inc., 2007). This rare service is testimony to their charge to
never compromiseuser focus for short-term economic gain (GoogleInc.,
2007).
IMITABILITY
Googles results are not easily imitated because of the large infrastructure
requirements to serve the relevant pages quickly. Google has servers all over the
world all synced up and all running on a very large quantity of RAM, fast
computer memory. With each search Google refines its results so that the search
engine gets smarter and caters to peoples individual preferences. Since Google
31

has the largest market share, their search engine can effectively learn more quickly
than competitors products. Googles operations exhibit path dependency because it
takes time to collect the data to provide results and even more time to analyze both
the content and users reactions to the results. Without going through a process
of refinement over a significant period of time, a competitor could not replicate
Googles search results. Google has used its analytics tools to help understand the
social complexity of the meaning

GOOGLE THE SEARCH GIANT

Rather The Google wasnt the first search engine in 1996 .
(Before Google YAHOO & GO.com)
There was Googles great Innovation that makes it the giant as a search crawler,
but what was that innovative technology that makes Googles search very accurate
& Instant than others That was Pigeon Computing..

PIGEON COMPUTING
The heart of Google's search technology is Pigeo a system for ranking web pages
developed by Google founders Larry Page and Sergey Brin at Stanford University.
Building upon the breakthrough work of B. F. Skinner, Page and Brin reasoned that
low cost pigeon clusters (PCs) could be used to compute the relative value of web
pages faster than human editors or machine-based algorithms. And while Google

32

has dozens of engineers working to improve every aspect of our service on a daily
basis, Pigeon Rank continues to provide the basis for all of our web search tools.

Why Google's patented Pigeon Rank works so well..?

Pigeon Rank's success relies primarily on the superior trainability of the domestic
pigeon (Columba livia) and its unique capacity to recognize objects regardless
of spatial orientation. The common gray pigeon can easily distinguish among items
displaying only the minutest differences, an ability that enables it to select relevant
web sites from among thousands of similar pages. By collecting flocks of pigeons
in dense clusters, Google is able to process search queries at speeds superior to
traditional search engines, which typically rely on birds of prey, brooding hens or
slow-moving waterfowl to do their relevance rankings. When a search query is
submitted to Google, it is routed to a data coop where monitors flash result pages
at blazing speeds. When a relevant result is observed by one of the pigeons in the
cluster, it strikes a rubber-coated steel bar with its beak, which assigns the page a
Pigeon Rank value of one. For each peck, the Pigeon Rank increases. Those pages
33

receiving the most pecks, are returned at the top of the user's results page with the
other results displayed in pecking order.
HOW WAS PIGEON RANK DEVELOPED?
The ease of training pigeons was documented early in the annals of science and
fully explored by noted psychologist B.F. Skinner, who demonstrated that with
only minor incentives, pigeons could be trained to execute complex tasks such as
playing ping pong, piloting bombs or revising the Abatements, Credits and
Refunds section of the national tax code. Brin and Page were the first to recognize
that this adaptability could be harnessed through massively parallel pecking to
solve complex problems, such as ordering large data sets or ordering pizza for large groups of
engineers. Page and Brin experimented with numerous avian motivators before settling on a
combination of linseed and flax (lin/ax) that not only offered superior performance,
but could be gathered at no cost from nearby open space preserves. This open
space lin/ax powers Google's operations to this day, and a visit to the data coop
reveals pigeons happily pecking away at lin/axkernels and seeds.
Ok than that was about Googles Search but there are yet much more great policies
&great products that makes Google globally multinational enterprise as follow

SECRET BEHIND GOOGLES SUCCESS.

This

unique

Advertisement

system

makes

Googles

market

capitalization top $100 billion.

Google succeeds through innovation. Its ad system, called Ad Words Select, is only
now starting to be matched by rival companies. Although Google keeps the details
of their advertising sales system a secret, scholars have been able to crack a lot of it
through diligence and observations.
34

Googles allocates the best spots for advertisements to those who are estimated to
pay the highest total amount. This means that it takes the price per click other
companies are willing to pay and multiplies it by Googles estimated number of
clicks that advertisement will receive and it ranks based on those numbers who will
get which spots. An independent study by a search-engine marketing firm named
Efficient Frontier Inc. showed that Google earns about 30% more revenue per ad
impression than Yahoo! does. Further, they say that Yahoo! will soon follow in
Googles footsteps.
While economics suggests that bidders will always bid their true value in a sealedbid second price auction (Google has a modified version of this for ad selling), in
real life the smart bidders bid slightly less than their true value. The naive bidders
who bid their true value often overbid.
However, Googles system also has advantages for its advertisers. It is easier for
advertisers to understand how the system works than the economic theory and has
already been proven to work on a large scale. This secret on Google links directly
to our discussion about second-price auctions (in economic theory). It compares
economic theory, which is much more complex when there are literally millions of
unique searches performed using Google daily. Although the logic is correct, the
smart advertisers bid slightly less than their true value in order to try to secure a
spot in a slightly lower position on the search page but for a lot less money. The
incentive for a good deal on advertising (with only small sacrifices) drives bidders
away from the perfect true-value bid. Another related topic discussed in this article
is the appearance of click through rates in advertising sales at Google. As I
described earlier, when Google decides who gets the top advertising slots for a
given search, it sells based on estimated total sales, not click through rates as many
of the other search engines currently use. This new system will soon be widespread
35

among the search engine industry. Mathematical rigor makes this approach as
effective as it is today. Accurate representations of estimated numbers ensure that
Google maximizes its profits for every sale it makes AdSense
AdSense is a contextual advertising program where publishers simply add a piece
of code to their blogs that helps Google analyze what your page is about so they
can serve ads on that topic. This increases the chances of your readers clicking the
ad which increases the chances that youll learn something from them.
AdSense also provide a variety of other income streams to bloggers including a site
search tool(you make money by people searching your site) and referral tools
(where you can make money by recommending Google products).

HISTORY
Oingo, Inc., a privately held company located in Los Angeles, was started in 1998
by GiladElbaz and Adam Weissman. Oingo developed a proprietary search
algorithm that was based on word meanings and built upon an underlying lexicon
called Word Net, which was developed over the previous 15 years by researchers at Princeton
University, led by George Miller. Oingo changed its name to Applied Semantics
(company)in 2001, which was later acquired by Google in April 2003 for US$102
million. In 2009, Google AdSense announced that it would now be offering new
features, including the ability to "enable multiple networks to display ads".

Types of AdSense
AdSense for Feeds
36

AdSense for search

AdSense for mobile content
AdSense for domains
AdSense for video
How AdSense works
The webmaster inserts the AdSense JavaScript code into a
webpage.
Each time this page is visited, the JavaScript code uses in lined JSON to
display content fetched from Google's servers.
For contextual advertisements, Google's servers use a cache of the page to
determine a set of high-value keywords. If keywords have been cached already,
advertisements are served for those keywords based on the AdWords bidding
system.(More details are described in the AdSense patent.)
For site-targeted advertisements, the advertiser chooses the page(s) on which
to display advertisements, and pays based on cost per mille(CPM), or the
price advertisers choose to pay for every thousand advertisements displayed.
For referrals, Google adds money to the advertiser's account when visitors
either download the referred software or subscribe to the referred service.
The referral program was retired in August 2008.
Search advertisements are added to the list of results after the visitor performs a
search.
Because the JavaScript is sent to the Web browser when the page is
requested, it is possible for other website owners to copy the JavaScript code
into their own web pages. To protect against this type of fraud, AdSense
customers can specify the pages on which advertisements should be shown.
AdSense then ignores clicks from pages other than those specified.
37

After the marketing strategy of Google, There are some of the Products by Google
that makes the enterprise Giant in software development.. as follow
THE INNOVATIVE PRODUCTS BY GOOGLE :

A downloadable application for viewing YouTube videos on selected devices.

Online video definitely existed before YouTube came into vogue. However,
uploading videos, sharing and watching them was quite cumbersome. (...) Video
files were too large to be e-mailed. (...) Viewers would typically need to wait for
the entire video to download before they could start watching it. This was a
problem not limited to just peer-to-peer video sharing. Most professional websites
with video content had the same issue. Downloading the video was justhalf the
battle. Users needed to install the appropriate video player, the free versions of
which often behaved like "spyware". (...)
Distributing popular and hard-to-find video clips was clearly a success factor. Clips
of the popular, long-running television show, Saturday Night Live was a
particularly significant example. (...)
YouTube allowed users to easily embed any hosted videos on web pages or blogs.
This turned out to be particularly popular with social-networking websites,
especially MySpace. (...) While the technology platform used by YouTube was not
particularly remarkable, it was designed to solve the problem at hand. The
technology concept was to encode videos in the Macromedia Flash format and take
advantage of the millions of computers which already had the Flash player
38

installed on it. YouTube was launched when social networks started to become
popular, when the band width became cheaper and people wanted an interactive
alternative to TV. But other sites did similar things, but couldn't get YouTube's
success.
GOOGLE SEARCH CODE

Mostly of interest only to programmers, Google Code Search is a pretty incredible

mechanism for finding and browsing the innards of countless open source projects.
Use the Lang: operator to limit your results to a certain language, and search by
developer name, file name, or comments.

GOOGLE ALERTS

39

Make your web search results come to you with Google Alerts ,email notifications
that list the new web pages your search terms pop up on, real-time. To get results
for several term searches in one alert, separate them with a pipe (|) or combine
terms with AND, like wildfire AND "San Diego".

GOOGLE BOOK SEARCH

Remember those rectangular objects that you used to read by turning a page from
one side to the other? Ah, those were the days. You can still get your books online
at Google Book Search, whose book-scanning elves add to the digital library all the
time. Flip through pages of the books scanned into Book Search, and add books to
your personal virtual library as well. Along those same lines, academics won't want
to forget about Google Scholar for searching papers, theses, abstracts and articles,
from academic publishers, professional societies, preprint repositories, universities
and other scholarly organizations.
40

SKETCHUP
Free 3-D modeling program Google Sketch Up lets anyone virtually architect their
dream house, remodeled kitchen, office, spaceship or sky scraper. Download
Google SketchUp for free, for Mac or PC.
GOOGLE APPS ENGINE

Google App Engine lets you run your web applications on Google's infrastructure.
AppEngine applications are easy to build, easy to maintain, and easy to scale as
your traffic and data storage needs grow. With App Engine, there are no servers to
maintain: You just upload your application, and it's ready to serve your users.
THE APPLICATION ENVIRONMENT
Google App Engine makes it easy to build an application that runs reliably, even
under heavy load and with large amounts of data. App Engine includes the
following features:
D y n a m i c w e b s e r v i n g , w i t h f u l l s u p p o r t f o r c o m mo n w e b
technologies
Persistent storage with queries, sorting and transactions
Automatic scaling and load balancing
APs for authenticating users and sending email using Google Accounts
41

fully

featured

local

d e v e l o p me n t

e n v i r o n me n t

that

s i m u l a t e s G o o g l e Ap p E n g i n e o n y our computer
Tas k q u e u e s f o r p e r f o r m i n g w or k o u t s i d e o f t h e s c o p e o f a
web request
S c h e d u l e d t a s k s for triggering events at specified times and regular
intervals
I'M FEELING LUCKY
The "I'm Feeling Lucky" button takes you directly to the first web page Google
returned for your query. You will not see the other search results at all. An "I'm
Feeling Lucky"search means you spend less time searching for web pages and
more time looking at them.For example, to find the homepage for IIT, simply enter
IIT into the search field and click onthe "I'm Feeling Lucky" button. Google takes
you directly to "www.IIT.edu", the officialhomepage of
SPELL CHECKER
Google's spell checking software automatically looks at your query and checks to
see if youare using the most common version of a word's spelling. If it calculates
that you're likely togenerate more relevant search results with an alternative
spelling, it will ask "Did youmean: (more common spelling)?". Clicking on the
suggested spelling will launch a Googlesearch for that term. Because Google's
spell check is based on occurrences of all words on.
CONCLUSION
If I could give you one word of advice for success on Google's, it would be this:
community. Leverage the developer community for all its worth because this is
one of the most active developer communities I have ever seen. People will
42

constantly give you feedback, and they also will alert you to errors and to other
developers bad practices. Make sure that you keep up-to-date with all the changes
taking place on the platform. Google's platform is constantly changing and
evolving. Every day Google's Administrator identifies new problem and developers
fix a bug and put forward another way for doing same thing more securely this puts
you always on a bleein edge. On the same hand Google's is increasing very fast at a
rate of more than 100% a year in India and has already a reach of more than
13million active users in India and more than 500 million world wide. This gives
an immense amount of opportunity for companies and new business entrepreneurs
to reach to very large customer and in very effective and efficient way.

43