TASK-1 ENTREPRENEURSHIP
Google Buys a Major Stake in the Online
Display Ad Business
By the beginning of 2007, Google was making billions as the leading supplier of search-related
advertising. However, the company had made little progress in the other important part of online
advertising: graphical and multimedia display ads. The display ad business was heating up as major
advertisers grew more interested in reaching consumers online. In addition to the option of using
display ads, these advertisers wanted to be able to run entire ad campaigns across carefully selected
websites while targeting viewers based on their online behavior. To compete in this booming market,
Google CEO Eric Schmidt knew his firm needed to boost its resources and capabilities, and fast.
With more money than time on its hands, Google opted to buy rather than build. In April
2007, the company purchased DoubleClick, a pioneer in online advertising. For $3.1 billion in cash,
Google acquired an experienced engineering and sales team and DoubleClick’s extensive ad serving
and tracking technologies. These systems allow advertisers to target ads to specific types of web
surfers, controlling where, when-and to an increasing degree-who sees their ads. The systems also let
advertisers monitor the effectiveness of their ads by tallying click-through rates and other key data.
The acquisition brought more than just talent and technology, however. In the words of one
industry executive, DoubleClick had “relationships with virtually every major online publisher and
more than half of the online ad agencies.” With advertising at the core of its business model and major
advertising capabilities, Google helped secure its future with one swift move.
Speaking of swift moves, competitive urgency also played a significant role in the purchase
decision. The online advertising industry was quickly consolidating during that time frame, with the
three major companies-Google, Yahoo!, and Microsoft-each trying to assemble the most compelling
one-stop solution to entice big-name advertisers. A few months earlier, Yahoo! had purchased a
minority stake in Right Media, a company with capabilities similar to DoubleClick’s, and Microsoft
was competing with Google to buy DoubleClick. Then soon after Google snagged DoubleClick,
Yahoo! bought the rest of Right Media, and Microsoft turned around and shelled out $6 billion in cash
for aQuantive, another major player in display advertising. Within the course of a few months, the
entire industry was reshaped.
Of course, as with all mergers and acquisitions, the deal is only the beginning, not the end.
Google still needs to integrate DoubleClick’s people, technologies, and business relationships into its
existing operations. The company also faces some criticism and government review of the deal.
Privacy advocates weren’t happy that Google could now analyze the search, browsing, and even
buying habits of online consumers (although DoubleClick stressed at the time of the acquisition that
data on web-surfing habits belongs to its clients and was therefore off-limits to Google). The federal
Trade Commission (FTC) also stepped in to review the deal. Although few people expect the FTC to
prohibit Google from finalizing the acquisition, it could eventually require the company to sell off
some parts of its newly combined operations to avoid giving it too much competitive dominance in
the market.
Critical Thinking Questions
1. Why wouldn’t Google take the simpler and cheaper route of creating a strategic alliance with
DoubleClick, rather than purchasing the company outright?
Answer :
Because DoubleClick has "relationships with virtually every major industry online
and more than half of online ad agency." With advertising as the core of the business model
and the abilities of the main ad, Google gained a technique very good sales strategy by using
extensive advertising. DoubleClick serves tracking technology so I can control or acquire the
online industry for companies or people who need online advertising worldwide and help
secure the future of online networking users with one swift movement.
2. The FTC doesn’t have the authority to stop the Google acquisition on the basis of privacy
concerns, but should it? Why or why not?
Answer :
Although some people expect the FTC to prohibit Google from the finalization of the
acquisition, the FTC does not have authority to stop the Google acquisition on the basis of
privacy concerns, as reasoned Google with DoubleClick to help secure the future of online
networking users, but it is also an FTC google will stop a lot of companies that will sell his
business or the operation of the newly shaped in order to avoid giving too much of a loss it
would be very profound and disturbing the world economy because every company there are
many use the online facility.
3. What are the risks of buying a company simply to keep it out of a competitor’s hands? What
is likely to happen to the acquired firm when this happens?
Answer :
The risk =
1. Ignorance of the company's business in the capture In-Depth
2. Not understanding the company's financial statements that have been purchased
3. uncertainty in Income
4. The risk of losing the entire investment
5. High stress levels
6. Quality of life is low because of the perception of suspicion
It may happen that the company acquired when it happens are:
1. Orientation of the uncertain future of the company because of failure to develop
strategic planning Causes of failure in trying
2. Each owner must rely on records and financial statements to determine the
financial condition of the business because of financial statements is a vital control
equipment. but if you do not understand the finance company will not run as it
should. To really know what's going on in the business.
3. The number of victims of layoffs the company employees who resigned from the
company.
4. No bankruptcy because the business has the ability to run a continuous losses.
ONLINE
Visit Google’s website at www.google.com and click on “Advertising Programs”. If you were a sole
proprietor, how could you use these services to promote your business? If you were the advertising
manager of a major corporation, how might you use Google’s advertising services?
(For the latest information on Google’s acquisition of DoubleClick and other strategic
mergers, visit www.prenhall.com/bovee and click on “Real-Time Updates.”)
Questions for Review
1. What are the three basic forms of business ownership?
Answer :
1. sole proprietorship, owned by a company that often manage well and have limited liability
2. ownership of a partnership consisting of two or more owners may jointly manage the
company and enable configurable financial support from the owners and have unlimited
liability
3. corporation, a separate legal entity from its owners. corporate owners have limited liability
for the debts
2. What is the difference between a general and a limited partnership?
Answer :
- A general partnership (general partnership) is a partnership where all owners of the company
(employer partners) have unlimited liability company liabilities.
- Partnerships (limited partner) is a company with several partners who are responsible
entrepreneurs limited to capital or property, however they lose business and profits. Income on
each partner businesses will be recognized income individuals and personal income tax.
3. What is a closely held corporation, and why do some companies choose this form of ownership?
Answer :
There are, yes have ownership because the selection of corporate ownership is important, how
companies can operate effectively and efficiently when, less accumulated capital, liabilities
obligations that must be paid by, the absence of control constraints management companies and
many more important things enterprise owners need to be observed, therefore the selection of
important corporate ownership.
4. What is the role of a company’s board of directors?
Answer :
External
- Representing PT on behalf of the company to do business with other companies.
- Represents the PT in the court case.
Internal
- Administer and manage the PT for the benefit of PT in accordance with the intent and
purpose of PT.
- Carry out the management of PT in accordance with appropriate policies (skills,
opportunities, and the predominance of business) specified in the Company Law and the
articles of association of PT.
- Led the company to issue corporate policies
- Select, assign, supervise the duties of the employee and the head (manager)
- Approve the annual budget of the company
- Submit a report to shareholders on the company's performance
5. What is culture clash?
Answer :
Conflict and conflict organizational culture is a critical factor in the failure of mergers and
acquisitions. Cultural issues align with financial factors that make a successful deal. The
Conference Board Study presents a comprehensive analysis of the impact of cultural issues in
mergers and acquisitions.
Questions for Analysis
6. Why is it advisable for partners to enter into a formal partnership agreement?
Answer :
partnership is defined as "the employment relationship is characterized by mutual
participation and mutual interests. to build partnerships to help each other in meeting the mission
and goals, the partnership agreement should clearly define the roles and responsibilities of
relevant mitrayang. primary objective of the agreement is to improve the efficiency service
delivery in specific program areas. this can only be achieved through joint planning, improve
communication, and each partner shows equal commitment. this will lead to greater acceptance of
each other scientifically and analytically sound inspection work. "Partnership Agreement"
formally, in the form of a written document which is intended to clearly define specific
objectives, activities, and responsibilities of each partner.
7. To what extend do shareholders control the activities of a corporation?
Answer :
- Maximizing the value of the Company by way of improving the principles of openness,
accountability, trustworthy, responsible, and equitable that the Company has strong
competitiveness, both nationally and internationally.
- The management of the Company in a professional, transparent and efficient, and
empowering function and increase independence.
- Encourage the Company's management to make decisions and perform actions based on
high moral values and compliance with laws and regulations, as well as awareness of
corporate social responsibility towards stakeholders and the environment around the
company.
- Increasing the Company contribution to the national economy.
- Increase the value of Company's investment and wealth.
8. How might a company benefit from having a diverse board of directors that includes
representatives of several industries, countries, and cultures?
Answer :
Because each board of directors who make decisions on how to manage their business so that
the future orientation of the company to be sure because if it can develop a strategic plan the
company will gain an advantage in causing his company, so it becomes a very risky liability in
making any decision. In addition the company in the form of actors with business ethics, which
represents a series of moral values, the company has a responsibility to produce safe products and
sell their products without misleading customers. In addition to responsibility for the company's
customers also had responsibility for security, fair treatment and equal opportunities for
employees. companies also have a responsibility to satisfy shareholders who provide the funds for
the business. In addition to that described in the company still has a responsibility Protect the
environment clean. so get the image assessment that the company is well and good in its
management.
9. Why do so many mergers fail?
Answer :
A company is technically considered a failure if the company is unable to meet its current
liabilities, such as debt or obligation exceeding company assets.
Besides the many that have been liquidated, but it was bad management is also an the very thing
may reflect the failure of the company.
10. Ethical Considerations. Your father sits on the board of directors of a large, well-admired public
company. Yesterday, while looking for an envelope in his home office, you stumbled on a
confidential memorandum. Unable to resist the temptation to read the memo, you discovered that
your father’s company about the possibility of a merger, with Dad’s company being the survivor.
Dollar signs flashed in your mind. Should the merger occur, the value of the other company’s
stock is likely to soar. You’re tempted to log onto your E*TRADE account in the morning and
place an order for 1,000 shares of that company’s stock. Better still, maybe you’ll give a hot tip to
your best friend in exchange for the four Cherrybelle tickets your friend has been flashing in
your face all week. Would either of those actions be unethical? Explain your answer.
Answer :
unethical actions that have been done are not able to resist the temptation to read the memo
that, when it was obvious it was a secret enterprise, thus appearing curiosity and engage in the
private stock account so that it can go 100 shares of the company without talking first or talk to
the owner of the company's board, even though it was own father.
Questions for Application
11. Suppose you and some friends want to start a business to take tourist on wilderness backpacking
expeditions. None of you has much extra money, so your plan is to start small. However, if you
are successful, you would like to expand into other types of outdoor tours and perhaps even open
up branches in other locations. What form of ownership should your new enterprise take, and
why?
Answer :
Yes if you want to expand the type of business form of ownership must be changed because if
capital owners who wish to join or to invest it will affect the name of the business entity even
started a small business, but wants to expand then it should be changed and ownership rights also
must be the fox in notary .
12. How This Affect You. Do you own or have you ever considered owning stock? If so, what steps
have you taken to ensure that company management has shareholder interest in mind/
Answer :
I have never been or have not been considered or even feel a stake in a business or company.
13. Integrated. You’ve developed considerable expertise in setting up new manufacturing plants, and
now you’d like to strike out on your own as a consultant who advises other companies. However,
you recognized that manufacturing activity tends to expand and contract at various times during
the business cycle. Do you think a single-consultant sole proprietorship or a small corporation
with a half dozen or more consultants would be better able to ride out tough times at the bottom of
a business cycle?
Answer :
Not necessarily through the tough times because it depends on a person's soul employers if
the strategy in making every decision in a strong company it will be able to get through the tough
times of the business cycle.
Sharpening Your Communication Skill
You have just been informed that your employer is going to merge with a firm in Thailand. Because
you know very little about Thailand culture and business practices, you think it might be a good idea
to do some preliminary research-just in case you have to make a quick trip overseas. Using the
Internet or library sources, find information on Thailand culture and customs and prepare a short
report discussing such cultural differences as social values, decision-making customs, concepts of
time, use of body language, social behavior and manners, and legal and ethical behavior.
Discovering Career Opportunities
Are you best suited to working as a sole proprietor, as a partner in a business, or in a different role
within a corporation? For this exercise, select three businesses with which you are familiar: one run
by a single person, such as a dentist’s practice or a local landscaping firm; and one that operates as a
corporation, such as Target or Wal-Mart.
1. Write down what you think you would like about being the sole proprietor, one of the partners,
and the corporate manager or an employee in the businesses you have selected. For example,
would you like having full responsibility for the sole proprietorship? Would you like being able to
consult with other partners in the partnership before making decisions? Would you like having
limited responsibility when you work for other people in the corporation?
Answer :
I do not want to have the full responsibility of a company is the sole owner of the company
even though my own. I want to communicate with my partner about what decision I would make.
I also want to get a limited liability company when I worked for other people because when an
error occurs and o done by me, then I will not bear these risks
2. Now write down what you might dislike about each form of business. For example, would you
dislike the risk of bearing all legal responsibility in a sole proprietorship? Would you dislike
having to talk with your partners before spending the partnership’s money? Would you dislike
having to write reports for top managers and shareholders of the corporation?
Answer :
I do not like bear all the risks of legal liability in a sole proprietorship. I would like to consult
on all decisions with my partners. I do not like to write a report to anybody, except it was my job
in a company
3. Weight the pluses and minuses you have identified in this exercise. In comparison, which form of
business most appeals to you?
Answer :
Comparative good business in my opinion is the business in partnership as if the loss and the
profit was shared fairly equally so that each partner is not too incriminate.
Follow the Fortunes of the Fortune 500
Quick! Name the largest corporation in the United States, as measured by annual revenues. Give up?
Just check Fortune magazine’s yearly ranking of the 500 largest U.S. companies. The Fortune 500
not only ranks corporations by size but also offers brief company descriptions along with industry
statistics and additional measures or corporate performance. You can search the list by ranking, by
industry, by company name, or by CEO. And to help you identify the largest international
corporations, there’s a special Global 500 list as well. www.fortune.com
well here is the identification of the top 50 according to fortune
Rank ▾ Company
Job growth
U.S. employees
1 Google
33%
18,500
2 Boston Consulting Group
10%
1,958
3 SAS Institute
8%
6,046
4 Wegmans Food Markets
5%
41,717
5 Edward Jones
1%
36,937
6 NetApp
30%
6,887
7 Camden Property Trust
-2%
1,678
8 Recreational Equipment (REI)
12%
10,466
9 CHG Healthcare Services
17%
1,312
10 Quicken Loans
20%
3,808
11 Zappos.com
70%
3,003
12 Mercedes-Benz USA
2%
1,680
13 DPR Construction
18%
1,265
14 DreamWorks Animation
8%
2,151
15 NuStar Energy
6%
1,512
16 Kimpton Hotels & Restaurants
4%
6,996
17 JM Family Enterprises
-1%
3,685
18 Chesapeake Energy
23%
10,502
19 Intuit
9%
7,102
20 USAA
7%
23,211
21 Robert W. Baird
5%
2,509
22 The Container Store
11%
3,495
23 Qualcomm
6%
13,353
24Alston & Bird
3%
1,645
25 Ultimate Software
15%
1,209
26 Burns & McDonnel
5%
3,165
27 Salesforce.com
39%
3,802
28 Devon Energy
-6%
3,286
29 PCL Construction
-5%
1,262
30 Bingham McCutchen
-7%
1,489
31 Scottrade
9%
3,139
32 Whole Foods Market
6%
60,213
33 Goldman Sachs
N.A.
N.A.
34 Nugget Market
8%
1,135
35 Millennium: The Takeda Oncology Co.
3%
1,311
36 Southern Ohio Medical Center
18%
2,276
37 Plante Moran
1%
1,476
38 W. L. Gore & Associates
2%
5,852
39 St. Jude Children's Research Hospital
1%
3,580
40 SVB Financial Group
9%
1,349
41 Adobe
11%
5,296
42 Baptist Health South Florida
10%
13,302
43 Novo Nordisk
N.A.
3,961
44 Balfour Beatty Construction
-2%
2,041
45National Instruments
7%
2,708
46 Intel
4%
44,209
47 American Fidelity Assurance
0%
1,490
48 PricewaterhouseCoopers
9%
30,569
49 Children's Healthcare of Atlanta
-1%
6,616
50 World Wide Technology
23%
1,470
ONLINE EXPLORATION
Find out what is required to incorporate a business in your state. You might begin by searching the
CCH Business Owner’s Toolkit site at www.toolkit.cch.com. If you were going to start a small
business, would you choose to incorporate or choose a different form of legal organization? List the
pros and cons that incorporation presents for the type of business you would consider.
Answer :
Businesses should focus in the search for large profits for the survival of the business. The
business has several reasons to support the pros and cons of doing business:
1. Some opinions were pro that in a perfectly competitive free market, profit-seeking itself
emphasizing that members of the public function in a way - the most socially beneficial. To be lucky,
each company must produce only what is desired by community members and must do so in the most
efficient available. Members of the public will be very lucky if the manager does not impose value the value of the business, but devoted himself to the profit-focused.
Cons:
However, a number of assumptions which may arise cons:
First, most of the industry is not perfectly competitive, and as far as the company does not have to
compete, they can maximize profits even if production is inefficient.
Second, assume that any measures taken to improve profitability, profitable social needs, though in
reality there are several ways to increase profits actually hurt the company: let pollution, advertising
imitate, hide defects, bribery.
Third, assuming that the public wants to produce any buyers, the company produced what is desired
by all members of society, when the reality desire most members of society (the poor and
disadvantaged) need not be met because they can not participate in the market
Fourth, essentially making a normative judgment.
Besides the ethical pros and cons berbisnispun should also be noted, such as:
- Business managers should focus their corporate profits and ignore ethical considerations, commonly
known as "argument from a loyal agent." Loyal agent argument is wrong, because in determining
whether the client orders to agents makes sense or not. Business or professional ethics must be
considered and in any event stated that the agency does not have an obligation to carry out actions that
are illegal or unethical. Thus, the duty manager to serve the employer, limited by boundaries boundaries of morality.
- Being a company / individual that ethical in business simply by obeying laws. Business ethics has
basically means "Obey the Law." Entrepreneurs much wrong define or interpret the laws and ethics
that looks identical. It is true that certain law requires the same behavior also demanded our moral
standards. However, the legal and moral are not always similar. It is clear that ethics does not just
follow the law. But by no means has no connection with the ethics law. Moral standards we
sometimes put into law when most of us feel that moral standards should be enforced by the power of
the legal system, on the contrary, the law has been criticized and eliminated when clearly violated
moral standards.