Google company overview and business strategy analysis

Google

This report is an overview of a case study on the internet web search engine company called Google. There is no doubt that Google has moved into the limelight as one of the fastest growing mid-sized companies in the nation and can only be compared in regard to growth to the likes of companies like TiVo and the Sharper Image. In the eyes of marketing executives, investors and potential employees, the potential of Google seems unlimited. "Some analysts speculated that the Mountain View, California-based company's valuation may reach $15-25 billion, and expected Google to raise as much as $2 billion in new equity." (Eisenmann, et al.) This report summarizes the analysis of Google by Thomas Eisenmann, et al. The report will consider the problems or concerns addressed throughout the review as well as focus in on some of the insights regarding the company's resources, both tangible and intangible, and their potential future trends and capabilities.

The internet search industry is getting more interesting due to the fact that many of the ISP leaders like Microsoft and Yahoo are diligently working to create or expand their own internal capabilities in order to compete directly against Google. The report looks at the company's competitive advantages and if those advantages are sustainable. Other crucial insights reported here regarding Google will be a review of the company's business strategy and how that strategy is currently performing and the forecasts of that strategy into the future. In closing, the report will make recommendations about some of Google's problem and concerns.

Google Inc. is a technology company that began as a global Internet search provider and has since moved in to the targeted advertising solutions business. Google is famous for maintaining an online index of billions of websites and other content and making that information available at no charge to anyone that can get on to the Internet. Google Inc. has been generating revenue by moving into cost per click, banner and other forms of web site advertising. In addition, Google has maintained a revenue sharing relationship with many other firms but the big contract is with the ISP provider America Online. Google has historically partnered with many companies and has even provided search capabilities with the likes of its direct competitor Yahoo. Prior to the recent Google Initial Public Offering (IPO), market insiders and potential investors could not wait to push the company up into the financial stratosphere. Now that the stock is available, Google Inc. is officially and suddenly worth billions. Since opening around $100 per share in August, the stock price has now climbed near $140 per share with no limit in sight.

Although the recent successful IPO makes it seem like Google's future is all gravy, the company has some concerns that supporters should take into consideration. Concerns range from intense competition, fragile partnerships, new technologies and even the whims of the internet community. Even the way Google does business is a concern for future investors. For example, the search engine business is currently being driven by advertising called pay-per-click because advertising is calculated as consumers click on specific links on the Internet and Google affiliate sites. The advertising system works because it provides a measurable link connection for the companies interested in making direct sales to consumers. However, this type of revenue stream is actually detrimental to Google because it basically goes against the tenet of the company's original desires and objectives.

The competition is fierce. Companies like Microsoft, Yahoo and other search engine providers are all working feverishly to steal market share from Google. "Yahoo and Microsoft had committed to strengthen their in-house search capabilities." (Eisenmann, et al.) In 2006, the beta Longhorn operating system from Microsoft has been rumored to already have features similar to Google's incorporated into it and Yahoo has been trying to internalize their search capabilities. "Microsoft managers had hinted at plans to integrate search capabilities tightly into Longhorn, and emphasized the value of tools that could quickly and flexibly search both the internet and the content of a PC user's hard drive, using spidering and indexing technologies." (Eisenmann, et al.) Although currently a direct partner with Google, the likes of ISP giant America Online are also a potential competitor for Google. At any time, AOL could pull out of the agreement that hires out search functions to Google in order to create their own internal search capabilities. Not to mention that new technology helped create Google but future new technologies could just as easily eliminate Google. New startups are out there right now thinking of ways to change the future.

Google was founded with a business strategy of providing search results that are untainted by advertising dollars. In the beginning the goal of Google was to bring back search results of whatever page (s) was hit the most or the best possible returned web site. As the revenue stream becomes more crucial to company growth, that business strategy may become hazardous to Google's profit margin. As the company has the new motivator of investor profit pressure, the company will have to expand its search result strategy to include the pay per click and other internet business revenue options.