CEO: Andrew King
March 22, 2012
Overview
Date:
March 22, 2012
To:
Board of Directors, Google Inc.
From:
Andrew King, CEO
RE:
Creation of a fantasy football website to further diversify Google’s portfolio
Introduction:
Google Inc, a multinational organizational founded in 1998 by Larry Page and Sergey
Brin and now today is one of the largest global technology leaders who main focus is on
improving the ways people connect with their information. With the aspiration to build products
that improve the lives of billions of people globally, Google’s mission is to organize the world’s
information and make it universally accessible and useful to all its users. Our innovations in web
search and advertising has made our website a top internet property and our brand is one of the
most recognized in the world. By making things much simpler for our users and improving the
overall Google experience while continually creating new products with the potential is how we
improve the lives of billions of people. Google owns many different products in technology field
including the operating system, Android which has over 250 million devices globally and
Google+ offering users a whole new way to share online and has 90 million people connected.
Additionally other devices and products including Google Buzz, Google Chrome, Google Labs,
Google Talk and hundreds more contentiously adding to their portfolio and constantly creating a
competitive advantage with their brand. With net income in the billions of dollars over the past
few years, Google Inc has a financial stability and capability to take a financial investment upon
carefully calculated market research in order to gain market share from a competitor.
Ask:
With Google Inc. currently not in the sports industry they are missing out on a large
market share that competitors are present in. Therefore we are asking the board of directors for
their approval and financial support of 448 million dollars to create a fantasy football website
where sports fan can create everything fantasy football in order to take market share away from
competitors and further diversify Google by creating a larger customer basis using Google’s
products
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Justification
Every year millions of people around the world complete in fantasy football leagues with
each individual spending countless of hours competing for the right to win their respectful
leagues. With 27 million people in North America alone in a league last year spending
approximately 110 dollars a year each, Google has the ability to further diversify their portfolio
along with create added revenues from the fantasy football along with attracting and promoting
them to use Google devices.
Currently, fantasy football’s market share is currently controlled by five websites being
Yahoo! Sports (22 percent), ESPN (19 percent), FOX Sports (11 percent), CBS Sports (6
percent) and NFL (5 percent). Therefore, Google has an opportunity to take over the market as
there is no main website dominating the market and on average customers choose their website
based on amount of advertising seen, amount it is costing the users and extra ordinary
characteristics that is specific to the user. Google’s Fantasy football will ensure that they meet
these characteristics which will be defined further in the implementation.
Fantasy football will also have many ways to create additional revenue for Google as
companies will sponsor with us, leagues with extra features which cost money to join and paid
phone applications displaying up to the minute information about your own team or league. All
these forms of revenues further justify why creating a fantasy football portal is excellent way for
Google to further diversify along with a benefit to the net income of Google as a whole. By
being exactly what the customer wants from their fantasy football experience will attract users to
use Google Fantasy Football and choose them from other websites.
Implementation
To begin the implementation the first step that needs to be done is the creating of the
website and making customers aware in time of the next NFL season in September. The website
where the viewers will sign up to join, create and manage their leagues will need to be set up.
The sign in e-mail will require the users to create a G-Mail account (Google’s email) which
encourages users to use more Google services. In creating the website, Google currently already
has the employees and technology in place to create a website and will only have to create a
department transfer within Google for employees who would be interested in working in the
fantasy football department. The website designers will look what customers enjoy from
competitors’ websites and what they do not like and design the website accordingly to attract
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people to the website by offering everything that they need and want from their fantasy football
experience.
Google will have two types of fantasy leagues, the free version which is available to
everyone and there will a paid version which will cost users a yearly fee of ten dollars per year.
In this paid version, the users will have availability to up to date statistics for drafting purposes
along with entering into a contests to win weekly/yearly prizes based on the scoring of your
team. The free versions will however still generate revenues from advertisement revenues which
will discussed later on. The reason why both are created due to the fact competitors are doing
both and Google does not want to miss out on a segment that might turn people away from
Google and choose another website.
Social Media is one of the ways Google will differentiate themselves from other fantasy
football websites. Through collaboration with Google + social media platform, users will be
forced to create a Gmail account and also encouraged to create a Google + social media
homepage to interact with other football fans. The social media experience is something that
fantasy football fans have never seen before and create additionally memberships to the Gmail
and Google+ program which will drive the revenues from them.
Creating a cell phone applications is also an additionally way Google will be differentiate
themselves from competitors as none of them has an application with the ability to receive up to
date statistics about your respective team. With people doing everything on their cell phones and
Google having the application capabilities allows them to take on this type of feature that other
competitors cannot do. The application will be available on any Android phone in the
marketplace for a one type fee of two dollars which will provide the users with up to date
information which is excellent for people who wants to check on their team and not near a
computer. The combination of the cell phone along with the social media is something that
competitors are likely to develop within in the upcoming years so Google being the first to
introduce will bring the innovators along with the people who require more out their fantasy
football experience. Please see software program for further information. (Appendix 5)
The marketing plan will take place through all of Google’s available media. The Internet
campaign will be set up through Google’s own social media along with other ones including
Facebook, Twitter and sports forums. The advertising on these websites will consist of the
information essential for the potential customers to know including: what it is, the advantages the
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website has, cost, and why it’s better than competitors. Next commercials will be made
beginning in August, a month away from the season are available throughout the United States
and Canada and will do the same as the internet marketing focusing on raising awareness and
educating the potential customers on the advantages of using the new website. Google will create
print advertisements in NFL magazines where the highlights and advantages of the new websites.
Advertisements can be placed on the Google mobile app; this can be the same as the social
media advertisement. Billboards will be situated all around the cities that we are going into, these
billboards will be linked to a website that will be set up to explain the channels. See marketing
program (Appendix 4)
Expected Results
Over the next five years, (Appendix 6) Google can expect results of three different
possibilities of a worst, mediocre and best case scenarios. The worst case scenario is stating that
customers are not overly attracted to the
website and is just viewed as an ordinary fantasy
football website. Therefore they will only receive ten percent of the market share and be ranked
fourth overall. The mediocre case scenario states that Google will receive 20 percent of the
market which will tie them with the top fantasy football websites. The best case scenario is that
in which Google takes over the fantasy football market share mostly due to the advertisements
and the extra features. Due to the large marketing per year, market share is expected to grow at
one percent each year due to this. On average every user who has a fantasy football team spends
on average of 110 dollars per season and what revenues are based on. The expenses are then
based on percent of revenues with marketing increased due to the need that Google Fantasy
Sports need extended further exposure. Google will be able to pay off the initial investment by
the first year and will make over a billion dollars in the worst case scenario. Last year there were
27 million people who had fantasy football team and that is number is growing at a number of 18
percent per year which is respected in the market share per year.
Evaluation and Control
To evaluate that Google Inc is being successful in creating a fantasy football website,
revenue streams will need to be examined in order that the website is being profitable and which
stream is actually the most profitable. The most profitable streams will be examined to see how
they can be more profitable. The number of viewers and the market share will be examined
regularly to ensure that the projections are matching that of the future. If the number of fantasy
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footballers does not grow at 18 percent then the financials will be adjusted again to account for
the changes. The number of users choosing the free leagues over the paying ones will be
examined to ensure if there is enough of a profit to keep them both around. The cell phone
application will be examined and if enough users are not paying for the application then Google
would consider offering it for no cost to the users which would affect net income. Additionally,
net income and the number of users for our Gmail accounts and Google+ accounts will be
monitored to ensure they are increasing in members. Finally, if the advertising and marketing
budget is not sufficiently attracting more users to the website then more of a budget will be
available to market more and to attract more users.
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Works Cited
Fantasy football. (2011). Retrieved from http://visual.ly/fantasy-football-fun-facts-and-statistics
Fantasy football growth continues at rapid pace. (2007, November 14). Retrieved from
http://www.portfolio.com/views/blogs/playbook/2007/11/14/fantasy-football-growth-continuesat-rapid-pace/
Google,inc. (2011, December 31). Retrieved from http://quote.morningstar.com/stockfiling/Annual-Report/2011/12/31/t.aspx?t=XNAS:GOOG&ft=10K&d=504f323b5bd8f0cbdd9375637f378045
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Appendices
Appendix 1 – Strategic Factor Analysis Summary
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Appendix 2 – Porter’s Analysis
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Appendix 3 – PEST Analysis
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Appendix 4– Marketing Program
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Appendix 5 – Software Program
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Appendix 6 – Five Year Forecast
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