Tim Chenier
Joe Elko
Brandon Eudy
Jason Harris
Question 1
Introduction
 Google was started by two Stanford graduate students
Sergey Brin and Larry Page in 1998 with initial funding
from two venture capital firms, Sequoia and Kleiner
Perkins
 Eric Schmidt joined Google in 2001 as CEO
Question 1
Introduction - Protagonist
 The protagonist of this case study is Eric Schmidt
 CEO of Google March 2001 (former CTO of Sun
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Microsystems and CEO of Novell)
Sold the IPO at $85 – August 2004
Stock peaked December 2007 at $714 and still currently
above $300
Implements the IPO with dual-class equity structure
Allowed unconventional approaches for managing
innovation
Created the “Google Ten Golden Rules” with Hal Varian
Question 1
Introduction - Objectives
 Sell the IPO with plans for a dual-class equity structure
 To keep the trio in charge
 Grow the company and profits
 Stay focused on the core business (search engines)
 Allow and encourage growth into new domains /
markets
 Create an atmosphere that pushes the limits of
technology and innovation
Question 1
Introduction – Key Decisions
 Assemble and execute the IPO to finance the potential
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growth of Google
Agree with Brin and Page on the radical dual class stock
equity structure
Keep the trio in harmony and in power to make decisions
Allow the creative side of the company to create and allow
high risk high reward projects to be funded (invest in long
shots)
Focus product development and accelerate the pace of
these efforts
Implement and live by Google’s Statement of Philosophy
Question 2
Key Issues – Problems/Risks
 Generating revenue
 How to generate revenue
 Attracting advertisers
 How to lure advertisers to Google
 Attracting users (searchers)
 How to entice people to use Google
Question 2
Key Issues – Opportunities
 Expand services to current users (searchers)
 Current users are more willing to try new services
 Differentiate services from competitors
 Yahoo, MSN, Lycos, etc.
 Offer prime ad space to advertisers
 Ability to reach more consumers
Question 2
Key Issues – Alternative Actions
 1. Stay focused on core competencies – web searches &
advertising
 Continue to fine-tune search capability
 2. Expand services into existing realms
 Continue to develop products in existing arenas (i.e.
Google Earth, Maps, Picasa, Desktop)
 3. Branch out into new areas
 OS, OpenOffice, Mobile technology
Question 2
Key Issues – Evidence
 Search engine market share between Google & Yahoo is
36% & 30% respectively
 Google must force perceived differentiation in order to
increase market share
 US paid-listings spendings estimated to be approaching $12
billion by 2010
 Focus on increasing advertising capability
 Over 50% of web users prefer Google as search engine
 Better positioned to expand services and increase switching
costs
Question 2
Key Issues – Criteria
 Which provides the greatest good for users
 Which provides the largest return on
investment
 Which better matches market trend forecast
Question 3
If I Were The CEO… - Actions
Continue to emphasize Google’s
web search capabilities through
strategies and applications
aimed at cell phone web use
Question 3
If I Were The CEO… - Why
 As the costs for internet data usage over cell phones
decreases, more individuals will be attracted to cell phone
web tools that are useful and user friendly.
 Google currently leads the market in:
 “Most Relevant Results”
 “Speed of Website”
 “Best Features”,
 “Presentation of Search”.
 Google needs to capitalize on this momentum to avoid
falling behind as technology evolves past personal PCs and
towards various mobile portable devices.
Question 3
If I Were The CEO… How
 The primary strategy for Google should be in developing cell phone software that totally
integrates all current technology.
 Develop software that provides a mobile internet experience to be virtually the same as
a PC internet experience. Some software is a viable substitute, however, few if any
would be considered a 1:1 comparison.
 Technology that links Google Maps to GPS features, Google Directory, and Google
Latitude. Will be very helpful for travelers who are in unfamiliar surroundings. Help
find gas stations, hotels, restaurants, etc with reduced anxiety.
 The previous data will enable suggestions to be made as to where to meet friends based
on Google Surveys (determines preferences) and Google Latitude (relative locations of
party members). This creates a useful application as well as a profit center for ad
revenue.
 Allow for seamless syncing between a Google phone and a home computer. This will
include everything from emails, contacts, music, movies, photos, misc. documents, etc.
This will allow a photo snapshot on a cell phone to be instantly transferred onto a PC.
Music and/or video on an internet PC will be able to stream content directly to your
phone. These features will eliminate the sense of loss associated with losing or
damaging a cell phone. Ad revenue may be positively impacted through more
customized advertising.
Question 3
If I Were The CEO… - Impact
 The impact from this suite of applications will provide Google
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users with the next logical step in mobile technology.
Business partners will hopefully be impacted by the increased
revenues they received based on Google users choosing their
goods or services instantly on a cell phone.
Shareholders will be impacted through increase dividends
through increased profits.
Employees will be impacted through the motivation this
renewed focus on integration. They will need to not only think
about their individual projects, but also how their projects link
to the other entities of the overall “spider web”
Competitors will be impacted by having to compete the next
generation of cell phone software and the increased customer
expectations.
Question 3
If I Were The CEO… - Respond
 Customers – Will initially be excited about the new technology,
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but will eventually accept it as a part of everyday life. They will
find it hard to remember a time before a fully integrated cell
phone.
Business Partners – More business will provide Google with
their business info and locations. This will allow a more
comprehensive directory for Google users.
Stockholders – Will react positively and stock prices will rise.
Employees – Will create more multifunctional and meaningful
applications. Total output will be more than the sum of the
applications. Cross calibrations will create software that was
initially non-existent.
Competition – Will attempt to piggy-back off our software or
create imitations. Google must maintain a forward-looking
attitude to avoid the imitations from becoming a viable threat.
Question 4
Follow Up Research
 Where Google is today:
2005
Today
$414 stock price
$335.34 stock price
5,680 employees
20,123 employees
8.0 billion in cash
8.6 billion in cash
123 billion in market equity
105.11 billion in market equity
35% share of US searches
63% share of US searches
68% share outside US
75.5% share worldwide
http://www.comscore.com/press/release.asp?press=2729
http://www.comscore.com/press/data/top_worldwide_properties.asp
http://investor.google.com/faq.html#employees
http://finance.yahoo.com/q/bs?s=GOOG&annual
http://finance.yahoo.com/q/ks?s=GOOG
Question 4
Follow Up Research
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Web search initiatives
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New search domains
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Image search
Video search
News Search
Product Search
Life Magazine photography search
Enhancements to advertising services
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Acquisitions of Orion to help pull in pages with content that is strongly related to keywords
SearchWiki – customize searches
dMarc - Radio advertising
DoubleClick technology - Behavioral technology – March 09 – using user profiles – previous searches
Google Analytics
Google AdSense for domains
AdSense for Mobile
Search & Advertising for Myspace
Software tools & services
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Browser – Chrome
Phone OS – Android – T-Mobile G1
iGoogle – portal
YouTube
Google Documents
Google Spreadsheets
Google Voice – voip
Google Reader – RSS feed reader
SketchUp – 3d Modeling program
Google Translate – site translation
Custom Search Business Edition / Google Site Search – ad-free window into Google
Google Apps – SaaS – messaging, collaboration & security
Google Security Services
Google Health – medical records online
Google Checkout – shopping cart system
Google Latitude
Google Toolbar
http://en.wikipedia.org/wiki/Google
Question 4
Follow Up Research
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Google has shown dedication to its core values and initiatives by continuing to improve search
capability. Acquiring the Orion search engine algorithm, Google has a better ability to return results
that are related to keywords. Google has also added the ability for users to customize their results by
creating SearchWiki. In dealing with new search domains, Google has added a multitude of areas that
are now searchable, including: Images, Videos, News, Products and Life Magazine photographs.
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Google continues to update its advertising ability by acquiring companies and creating new
opportunities. dMarc enters into radio advertising and DoubleClick implements behavioral
advertising. Google has also expanded its Adsense capability to include mobile marketing.
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Google has dramatically increased it’s software tools and services by offering a vast array of products
for consumers and businesses. One prime example of Google’s commitment to information
organization is Google Health which was created to organize medical records. Further examples of
Google’s expansion into new arenas includes: Google’s OS for mobile phones Android, the “wallet”
system Checkout, the browser Chrome, and the user portal iGoogle.
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Google continues to strive to be a driving force for technology, introducing new capabilities and web
services that allow consumers and marketers to come together within the marketplace to both obtain
desired results.