“A Study on the Business Model of  Google “  2010 

A Study

On

The Business Model of Google

MANAGEMENT RESEARCH PROJECT

Submitted to: Submitted by:

Professor Surajit Ghosh Dastidar India Mohanty

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ACKNOWLEDGEMENT

It gives immense gratification to place on records my profound gratitude and sincere

appreciation to each and every one of those who have helped me in this Endeavour. I am
ineffably indebted to my Faculty Guide Professor Surajit Ghosh Dastidar for his conscientious
guidance and encouragement to initiate this study that helped me to accomplish this assignment.
I extend my sincere thanks for his cooperation and valuable suggestions from time to time that
made my study more meaningful.Any omission in this brief acknowledgement does not mean
lack of gratitude.

Indira Mohanty

(08BSHYD0304)

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1 Contents 
1.  Methodology ......................................................................................................................................... 6 
2.  Introduction .......................................................................................................................................... 7 
3.  Background Note .................................................................................................................................. 8 
4.  Insight on Google Business Model ...................................................................................................... 10 
4.1  Infrastructure Management ....................................................................................................... 11 
4.1.1  Parallel Processing .............................................................................................................. 12 
4.1.2  Page Rank Technology ....................................................................................................... 13 
4.2  Value Configuration .................................................................................................................... 14 
4.3  Capability .................................................................................................................................... 15 
4.4  Acquisitions and Partnerships ..................................................................................................... 16 
4.5  Adwords      ‐Revenue Generation Model ................................................................................... 16 
4.5.1  Benefits of Adwords ............................................................................................................ 17 
4.6  Cost Structure .............................................................................................................................. 22 
4.7  Distribution Channel ................................................................................................................... 22 
4.8  Ideas ............................................................................................................................................ 23 
4.9  Experiments ................................................................................................................................ 23 
4.10  Recruitment ................................................................................................................................. 24 
4.11  Value Proposition ........................................................................................................................ 24 
5  Swot Analysis ...................................................................................................................................... 27 
6  Criticisms ............................................................................................................................................. 27 
6.1  Click Fraud ................................................................................................................................... 27 
6.2  Security ....................................................................................................................................... 27 
7  Competitors ........................................................................................................................................ 28 
7.1  Google and Microsoft ................................................................................................................. 28 
7.2  Google and Apple ........................................................................................................................ 30 
7.3  Google and Yahoo ....................................................................................................................... 31 
7.4  Google and Amazon .................................................................................................................... 31 
7.5  Google And Facebook ................................................................................................................. 32 
7.6  Google and Cisco ......................................................................................................................... 33 
7.7  Google and IBM ........................................................................................................................... 34 

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7.8  Google and Nokia ........................................................................................................................ 34 
7.9  Google and Mozilla ..................................................................................................................... 35 
8  The Road Ahead .................................................................................................................................. 36 
9  Annexure ............................................................................................................................................. 37 
10  References ...................................................................................................................................... 48 
 

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Google's mission is "to orgaanize the world's
w infoormation annd make it universallly
accessibble and useeful".

“ Googgle – A moddern managgement piooneer that has much to teach uss about how
w to
st
build coompanies that
t are truuly fit for thhe 21 century. “ 

The Fu
uture of Managemen
M nt, Londoll Business School Prrofessor, Gary
G Ham
mel

“As we go forwarrd, I hope we're

w goingg to continue to use technology
t y to make
really big
b differen
nces in how
w people livve and worrk.”

Sergey Brin, Coffounder off Google

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1. Methodology
 

Descriptive Case Study-

It covers the scope and depth of the case being covered. A theory formulated ahead of time, is
reviewed and debated upon, and serves as a design for the descriptive case study. The contexts
covered under a descriptive case study are as follows-

Initiation and Structure of the Organization

• Year of origin, who or what was the main source of support in creation of the organization,
the source of funding, the legal grants, the organizational structure

Organizational Evolution

• How has the organization transfomed over the years.

• What were the events that led to the changes?
• What activities have been completed or are currently under way?
• The planning and implementation strategies

Relationship with other organizations

• Mergers, collaborations, partnerships with other organizations.

• Competition

Relationship with the Government

• The organizations relationship with the Government, and how the relationship has affected
the organization

Effect on Society
• The contribution of the organization to the society. The perception of the society about the
organization.
• The corporate social responsibility of the organization

Policies
• How the organization deals with multiple issues. The policies of the organization with
respect to various social issues.

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Research questions

A descriptive case study methodology will be undertaken .The case would broadly focus on the
following aspects:

• A detailed approach to the business model of Google.

• Revenue generator model of Google.
• The changes in the business model of Google over the years alongside with increased
competition.
• Insights into the business models of its major products, and their relative contribution to
the revenue generated
• Comparative analysis of Google’s Business model with its competitors.
 

2. Introduction 
 

Google Inc. is an American public corporation , earning revenue from advertising related to its
Internet search, e-mail, online mapping, office productivity, social networking, and video sharing
services as well as selling advertising-free versions of the same technologies. The Google
headquarters, the Googleplex, is located in Mountain View, California. The company is running
millions of servers worldwide. Who would have predicted that two friends with an idea, working
in a garage, would one day revolutionize internet search advertising?

Google was founded by Larry Page and Sergey Brin while they were students at Stanford
University and the company was first incorporated as a privately held company on September 4,
1998. The initial public offering took place on August 19, 2004, raising $1.67 billion, implying a
value for the entire corporation of $23 billion. Presently it has a market capitalization of
179.41$bn.1

Whenever a company becomes wildly successful in a brief span of time, it becomes an object of
fascination for corporate executives, students and even general public. It becomes a new role
model for business success. Google is still an young company and it has yet to be tested by
adversity. By taking a close look at Google’s business model, important insights can be
deciphered. Most of Google’s success can be traced to three innovations, firstly a brilliant insight
into the organization of information, secondly, a creative act of imitation, and lastly a
breakthrough in the engineering of computer systems.

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3. Backgro
B ound No
ote
E
Exhibit I

Googlee sets up woorkspace in Susan

Wojcicki's garage at 232 Santa
Margarrita, Menlo Paark (Sept 1998)

Soource: telegraph
h.co.uk

Google began
b as a research
r prooject by Larrry Page and Sergey Brrin in 1996,, who were both
students at Stanford University, California. They
T believeed that a seaarch engine that analyseed the
relationshhip betweenn websites woould produce better resuults. They reaalised that thhe search engines
that exissted at that time were deeply
d flaw
wed. Their seearch enginne was origiinally nicknaamed
"BackRuub" because thet system checked
c backk links to esttimate the im
mportance off a site.

The dom main googlee.com was registered on 15 Sepptember 19997, and thee company was
incorporaated as Goog gle Inc. on 4 Septemberr 1998 at a friend's
fr garagge in Menlo Park, Califoornia.
The name "Google" originated
o frrom a commmon misspelliing of the woord "googol", which refe fers to
100
10 , thee number rep presented byy a 1 followeed by one huundred zeross. The total initial
i investtment
raised foor the new company
c am
mounted to almost
a $1.1 million, inccluding a $100,000 checck by
Andy Beechtolsheim,, one of the founders of Sun Microosystems. After quickly outgrowingg two
other sitees, the comp
pany leased a complex of o buildings in
i Mountainn View at 16600 Amphithheatre
Parkway from Silico on Graphics (SGI) in 2003. The com mpany has reemained at this
t locationn ever
since, and the compleex has since come to be known as thhe Googlepleex.

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Exhibit II

Googleeplex,
Mounttain Vieew,
Califorrnia

Google has
h a simplee, clean, clear, minimalistic user innterface. no frills, just thhe logo annd the
search boox - easy an
nd fast to looad. Bottom m line is: If the
t user visits a search engine, whhat he
wants to get is simplly that: just a search enggine - searchh engine whiich is fast annd reliable. If
I the
user wannts a generaalistic portall, he goes too a portal, not
n to a seaarch engine. Larry Pagee and
Sergey Brin,
B the Gooogle Executivves, understood this, andd this was what
w they deliivered.

The Google search engine attractted a loyal following

f am
mong a grow wing number of Internet users,
u
who liked its simple design and useful results. But just serving
s free search resuults was not much
m
of a bussiness modeel. In 2000, Google beegan selling advertisem ments associaated with seearch
keywords. The ads were
w text-bassed to maintaain an uncluuttered page design
d and to
t maximize page
loading speed.
s Keywwords were sold
s based onn a combinaation of pricee bid and cliickthroughs,, with
bidding starting
s at 5 cents per click. It imitatted the conccept from Gooto, but Gooogle perfecteed the
process. Another imp portant reason for Googgle’s success is the desiign of its paarallel proceessing
computerr system. Ho oused in mulltiple data ceentres arounnd the world,, the system is able to crrunch
numbers and process transactionns at an exttremely rapid pace. This has given Google an edge
over its competitors
c Microsoft and
a Yahoo. The T future competition
c among thesee companiess will
be foughht as much onn the power and the efficciency of theeir machinerry, as on thee attractiveneess of
the servicces.

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4. Insight o
 on Goog
gle Business M
Model 
 

Exhibit III- Nine Briicks Buisnesss Model

Source-http://www.hec.unil..ch/aosterwa/PhhD/Osterwalder__PhD_BM_Ontoology.pdf

Exhibit IV

A Value Propossition is an overrall view of a coompany's

Value Propoosition b
bundle of produucts and servicees that are of vaalue to the
duct
Prod c
customer.

The Target Cusstomer is a segm

T ment of customeers a company
Target Custtomer
w
wants to offer value
v to.
Custtomer A Distribution Channel is a meeans of getting in touch with
Distribution
n Channel
Interrface t customer.
the
The Relationshhip describes thee kind of link a company
T
Relationship
p
e
establishes betw
ween itself and the customer.
The Value Connfiguration describes the arranggement of
T
Value Confiiguration a
activities and reesources that arre necessary to create
c value forr
t customer.
the
Infraastructure A capability is the ability to exxecute a repeataable pattern of
Management Capability a
actions that is necessary
n in ordder to create vallue for the
c
customer.

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A Partnership is a voluntarily initiated
i cooperrative
Partnership
p a
agreement betwween two or more companies inn order to
c
create value forr the customer.

The Cost Structture is the repreesentation in mooney of all the

T
Cost Structu
ure
m
means employeed in the business model.
Financial Aspects
The Revenue Model
T M describess the way a commpany makes
Revenue Moodel
m
money throughh a variety of revvenue flows.
Source: httpp://www.hec.unill.ch/aosterwa/PhhD/Osterwalderr_PhD_BM_Ontoology.pdf

 
 

4.1  In
nfrastructu
ure Manag
gement 

Google requires
r larg
ge computatiional resources in orderr to provide their servicce. When a client
c
computerr attempts tot connect tot Google, several
s DNS S servers resolve www.google.com m into
multiple IP addresses, and the client is direccted to diffeerent Googlee clusters. . A Google clluster
has thoussands of serv
vers and oncce the client has
h connecteed to the serrver additionnal load balanncing
is done to send thee queries too the least loaded
l web server. In computer networking,
n load
balancinng is a technnique to distrribute worklload evenly across two or more com mputers, nettwork
links, CPPUs, hard drives,
d or other
o resourrces, in ordder to get optimal
o resoource utilizaation,
maximize throughpu ut, minimize response tim me, and avooid overloadd. This makees Google one of
the largesst and most complex conntent deliverry networks.

Exhibit V

Load balanccing distributtes

traffic efficciently amonng
network servvers so that no 
n

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4.1.1 P
Parallel Proc
cessing 

Google runs
r on a distributed netw
work of thouusands of loww-cost compputers and caan therefore carry
out fast parallel prrocessing. Parallel proceessing is a method of computation
c n in which many
m
calculatioons can be performed
p sim
multaneouslly, significanntly speedingg up data processing. Gooogle
has threee distinct parrts:

• Googlebot,
G a web crawlerr that finds and
a fetches web
w pages.
• The
T indexer that
t sorts evvery word onn every pagee and stores the resultingg index of words
w
iin a huge dattabase.
• The
T query prrocessor, whhich compares your searrch query too the index and recomm
mends
t documen
the nts that it connsiders mostt relevant.

E
Exhibit VI

Googlebot, Google’ss Web Craw

wler

Googleboot is Googlee’s web craawling robott, which finnds and retriieves pages on the webb and
hands thhem off to the
t Google indexer. It functions muchm like a web browseer, by sendiing a

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request to a web server for a web page, downloading the entire page, then handing it off to
Google’s indexer.Googlebot finds pages in two ways: through an add URL form,
www.google.com/addurl.html, and through finding links by crawling the web

Google Indexer

Googlebot gives the indexer the full text of the pages it finds. These pages are stored in Google’s
index database. This index is sorted alphabetically by search term, with each index entry storing
a list of documents in which the term appears and the location within the text where it occurs.
This data structure allows rapid access to documents that contain user query terms.

Google’s Query Processor

The query processor has several parts, including the user interface (search box), the “engine” that
evaluates queries and matches them to relevant documents, and the results formatter. PageRank
is Google’s system for ranking web pages. A page with a higher PageRank is deemed more
important and is more likely to be listed above a page with a lower PageRank.

4.1.2 Page Rank Technology

 

We've developed an interesting trick that speeds up the first step: instead of storing the entire
index on one very powerful computer, Google uses hundreds of computers to do the job.
Because the task is divided among many machines, the answer can be found much faster. To
illustrate, let's suppose an index for a book was 30 pages long. If one person had to search for
several pieces of information in the index, it would take at least several seconds for each search.
But what if you gave each page of the index to a different person? Thirty people could search
their portions of the index much more quickly than one person could search the entire index
alone. Similarly, Google splits its data between many machines to find matching documents
faster.

How do we find pages that contain the user's query? Let's return to our civil war example. The
word "civil" was in documents 3, 8, 22, 56, 68, and 92; the word "war" was in documents 2, 8,
15, 22, 68, and 77. Let's write the documents across the page and look for those with both words.

civil 3 8 22 56 68 92
war 2 8 15 22 68 77
both words 8 22 68

Arranging the documents this way makes clear that the words "civil" and "war" appear in three
documents (8, 22, and 68). The list of documents that contain a word is called a "posting list,"

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and looking for documents with both words is called "intersecting a posting list." (A fast way to
intersect two posting lists is to walk down both at the same time. If one list skips from 22 to 68,
you can skip ahead to document 68 on the other list as well.)

Ranking

Google uses many factors in ranking. Of these, the PageRank algorithm might be the best
known. PageRank evaluates two things: how many links there are to a web page from other
pages, and the quality of the linking sites. With PageRank, five or six high-quality links from
websites such as www.cnn.com and www.nytimes.com would be valued much more highly than
twice as many links from less reputable or established sites.

If a document contains the words "civil" and "war" right next to each other, it might be more
relevant than a document discussing the Revolutionary War that happens to use the word "civil"
somewhere else on the page.

Also, if a page includes the words "civil war" in its title, that's a hint that it might be more
relevant than a document with the title "19th Century American Clothing." In the same way, if
the words "civil war" appear several times throughout the page, that page is more likely to be
about the civil war than if the words only appear once.

Running a search engine takes a lot of computing resources. For each search that someone types
in, over 500 computers may work together to find the best documents, and it all happens in under
half a second.

4.2 Value Configuration

Google is different. Google is expanding its area of participation in the value chain. In other
words, its search technology and infrastructure is merely a utility that allows it to do what really
bring over 90% revenue and income - advertising. Google is primarily an advertising company,
simply because it is the only company that allows any business to start advertising online without
any need for professional copy writers or graphic designers or help from any advertising
salesperson.

Nearly everything that the company does , including building big data centres, buying optical
fibers, promoting free wifi access, fighting copyright restrictions, supporting open source

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software, and giving away web services and data is aimed at reducing the cost and expanding
the scope of internet use. Simply put, Google wants information to be free.

Even though the business model spells-out how a company makes money, and the value
propositions are what the company offers, not all value propositions have the purpose to
generate direct revenues. Reasons can be to, increase the value of existing intellectual assets
and capabilities, get access to new assets and capabilities, create momentum for a new
technology, lower cost of development, reduce risks, build new markets, attract the best people,
etc.

Google as an example

Google generated 99% of total revenues 2007, and 97% of total revenues in 2008 from
advertising, still most of Google's value propositions are not directed towards its advertisers.

Exhibit VII
Users A very large number of value propositions, often provided for free
Network Revenues in return for relevant ads on their sites
Partners
Organizations Money saving propostion by outsourcing IT needs to Google.
Developers Providing platforms such asGWT for free to enable development of rich
content
Employees Working conditions, "own time", job security
Google Growth , financial performance
owners
Society Free tools such as blogs and localized versions of Google in developing
countries

4.3 Capability 
 

Complementary Advantage

Complements are any products and services that tend to be consumed together.For Google
anything that happens on the internet is a compliment to its main business.The more the people
use internet, the more ads they see, and the more money.The vast breadth of Google’s
compliments and its ability to push the price of the compliments to zero , is what sets it apart
from other firms. It faces far less risk in product development than other usual business does.It
routinely introduces half finished products and services as online “betas”, because it knows that

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even if the offering fails to win a big share of the market, they will still generate advertising
revenue.

The real secret to Google’s mystique is that of a company that understands the possibilities of
technological change, and where to look for the small companies with big ideas that will
change established business models. And in that way, it is following in the time-worn footsteps
of other acquisitive giants like Cisco Systems and Microsoft. Like any other giant multinational,
Google knows that if it needs to constantly add new products and services to its business.

4.4 Acquisitions and Partnerships 
 

. Since 2001, Google has acquired many companies, mainly focusing on small venture capital
companies. In 2004, Google acquired Keyhole, Inc. The start-up company developed a product
called Earth Viewer that gave a 3-D view of the Earth. Google renamed the service to Google
Earth in 2005. Two years later, Google bought the online video site YouTube for $1.65 billion
in stock. On 13 April 2007, Google reached an agreement to acquire DoubleClick for $3.1
billion, giving Google valuable relationships that DoubleClick had with Web publishers and
advertising agencies. Later that same year, Google purchased GrandCentral for $50 million. The
site would later be changed over to Google Voice. On August 5 2009, Google bought out its first
public company, purchasing video software maker On2 Technologies for $106.5 million.

4.5 Adwords      ­Revenue Generation Model  

Most search engines provide two types of results listings in response to the same user query:
organic (also called "natural" or "free") listings, and paid listings (i.e., advertisements). Google
keeps these two types of listings separate, and ads are noted by the phrase "Sponsored Links"
appearing above them. On Google, although both organic and paid results appear in response to
the same user query, the results are independent of each other. The ranking of an organic search
result has no bearing on the ranking of any ads, and vice versa. This makes it possible for an
advertiser to perform well in the paid listings and have an ample online presence, even if their
site isn't present in the top organic search results.

Google introduced a smart, innovative and quite risky business model - Adwords - and the pay
per click concept. The risk proved winning, and the innovative business model worked. Today
Adwords is Google main source of revenues. AdWords analyzes every Google search to
determine which advertisers get each of up to 11 "sponsored links" on every results page. It's the
world's biggest, fastest , a never-ending, automated auction.

Thousands of advertisers worldwide use the Google Adwords program to promote their products
and services on the web. Advertisers bid in an open and competitive auction to have their ads

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appear alongside the search results for particular keywords. They can specify the geographic
location and time of the day for their ads to appear .The adwords program includes local ,
national and international distribution.

4.5.1 Benefits of Adwords 

Relevance

One of the biggest benefits AdWords offers is the ability to precisely target ads to users based on
their interest, as well as a number of other factors like location, language, and demographic. The
result is that the user sees highly relevant ads, which they are more likely to click on. And
because ads on search engines show only in response to a user's query, the user is also more
likely to be further along in the buying cycle, and more likely to be ready to convert.

Return on Investment (ROI)

Online advertising is thoroughly measurable, making it easy to tell whether or not you're meeting
your advertising goals. Every user's click is tied to a particular ad, keyword, and search query, all
of which you can track and decide to improve whenever you like. If you spot a trend, you can
create, modify, or delete keywords, ads, and campaign targeting selections within seconds. This
allows you to be more responsive and more in control when it comes to improving your ROI.

Reach

Every day, Internet users conduct millions of searches on Google. When you use Google
AdWords, you have the opportunity to capture any segment of that broad worldwide audience
that's actively looking for products, services, information, and websites. By giving your products
or services a presence during relevant user searches, you're ensuring that you're visible in a
crucial point in the customer's buying cycle -- when the user is actively searching for what you're
offering.

Pay per Click Advertising

Pay-Per-Click (PPC) is the best way to send immediate, targeted traffic to your website.. An
advertiser has to pay every time his ad receives a click. The Advertisers decide the keywords
relevant to their offer that should display their ad and the maximum amount they are willing to
pay per click for that keyword.

Categories are ranked by the cost per click that advertisers generally have to pay, weighted by
distribution, and then separated into three bundles: high cap, mid cap, and low cap. "The high
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caps are very competitive keywords, like 'flowers' and 'hotels,'" Tang says. In the mid-cap realm
you have keywords that may vary seasonally—the price to place ads alongside results for
"snowboarding" skyrockets during the winter. Low caps like "Massachusetts buggy whips" are
the stuff of long tails.

Placement Targeting

Placement targeting lets advertisers choose individual sites in the Google Content Network
where they'd like their ads to appear. A placement can be an entire website, or it can be a subset
of pages or ad units on a site, as defined by the site's publisher. For example, a news site might
offer advetisers the chance to place ads across their entire site, only on its front page, or just in ad
units on the upper half of its sports pages. Placement targeting gives advertisers even greater
flexibility to control exactly where their ads show.

Ad Rank

Ads are positioned on pages based on their Ad Rank, which is a combination of your bid and a
relevancy metric called Quality Score. The ad with the highest Ad Rank appears in the first
position, and so on down the page.

A Quality Score is calculated every time the advertiser’s keyword matches a search query -- that
is, every time the keyword has the potential to trigger an ad. Quality Score is a formula that
varies based on the bid type, where the ad is showing, and targeting type. However, the main
concept remains the same. Because Quality Score measures relevancy, a high Quality Score
generally means that the ads will appear in a higher position and at a lower cost-per-click (CPC).

Adwords cost

Google charges a one-time AdWords activation fee upon account creation to ensure that our
advertisers are committed to creating well-targeted advertisements. The fee also helps cover the
costs associated with creating, maintaining and, if applicable, cancelling an account.

Google Search Network

It includes Google search pages, search sites, and properties that display search results pages,
such as Google Product Search and Earthlink. AdWords ads can appear alongside or above
search results, as part of a results page as a user navigates through a site's directory, or on other
relevant search pages.

Google Content Network

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It includdes news paages, topic-sspecific webbsites (art annd humanitiies, business, entertainm ment,
health, foood, music, sports, techhnology, travvel etc)blogss, and other properties --
- such as Gmail
G
and The New York Times
T -- thatt allows to extend
e the reach of the ad campaiggn to pages where
w
users aree actively en
ngaged with content, nott just doing searches. AdWords
A adss can appearr on a
webpage if the content and URL of that pagee match the keywords
k in the campaiggn.

AdSensee is an ad serrving prograam run by Google.

G Webssite owners or affiliates can enroll inn this
program to enable tex xt, image annd, video advvertisementss on their sitees. Revenue is generatedd on a
per-clickk or per-th housand-adss-displayed basis and the ads arre administeered by Gooogle.
AdSense program inccludes AdSeense for searrch and AdSeense for conntent. AdSennse for searchh was
launchedd in the first quarter of 20002 and is Google’s
G servvice for distrributing releevant ads froom its
advertiseers for displaay with searrch results onn the Googlle Network members’
m siites. AdSensse for
content, launched in the first quaarter of 2003, distributees ads from Google’s
G addvertisers thaat are
relevant to content on o Google Network
N meembers’ sitees. If the page is about flowers, Gooogle
would pllace ads related to floweers on that paage. Google advertisers are requiredd to pay Gooogle a
fee each time a userr clicks on one of theirr ads displayyed on Gooogle Networkk members’ web
sites. Maany websitess use adsennse to moneetize their content.
c Addsense has beenb particlluarly
helpful for
fo delivering g advertisinng revenue tot small weebsites that do d not have the resourcees for
developinng advertisin ng sales proggram and salles people.

Exhibit VIII
V

Thee Google conteent network reaaches

80%% of global internet userrs --
maaking it the worrld's #1 ad netw
work

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Exhibit IX Some of the Partner Sites in Google Content Network

United States CNN,About.com,The New York

Times,Hollywood.com,Napster.com,Myspace,Linkedin,Orkut, You tube
Germany Youtube Automotive,Bikersjournel.de, Google Finance, Stockworld, Myvedio,
Netlog,Xing
United Herald Tribune,The
Kingdom Independent,Euronews,Afterdawn.com,Softpedia,Last.fm,Lyrics.com

Source: http://www.google.com/adwords/contentnetwork/partners.html#

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 “A Study on the Business Model of  Google “  2010 
 
Exhibit X Adwords Terminologies

Keyword
The keywords you choose are the terms or phrases you want to prompt your ad to appear. For example, if you deliver fresh
flowers, you can use "fresh flower delivery" as a keyword in your AdWords campaign. When a Google user enters "fresh
flower delivery" in a Google search, your ad could appear next to the search results.

Placement
Like keywords, placements are another way for you to control where your ads appear. A placement is usually a website where
you'd like your ad to appear. For example, if you select www.example.com/sports as a placement, your ad could appear on that
site.

Image ad
A graphical ad, which can be static or animated, that runs on the Google Content Network. Also called a display ad.

Campaign & Ad Group

AdWords accounts are organized into campaigns and ad groups. You start with one campaign, which has its own daily budget
and targeting preferences. You can have multiple campaigns running and might choose to create one campaign for each
product or service you want to advertise. Within each campaign, you have one or more ad groups, which are sets of related ads,
keywords, and placements.

Impression
  (Impr.)
The number of impressions is the number of times an ad is displayed on Google or the Google Network. Monitor your
impressions to see how many people your ad is shown to.
 
Click
If  a customer sees your ad and clicks on it to learn more or to do business with you, it is recorded in your account as a click.
Monitor your clicks to see how many people choose to enter your website from your ad.
 
Clickthrough Rate (CTR)
Your clickthrough rate (CTR) is a metric that helps show how your ads are performing. The more relevant your ads are, the
 
more often users will click on them, resulting in a higher CTR. The system calculates your CTR as follows: Number of ad
clicks/number of impressions x 100.
 
Cost-per-click (CPC)
 
Under the cost-per-click (CPC) pricing model, AdWords charges you for each click your ads receive. You won't incur any
costs if your ad is displayed and users don't click it. CPC bidding is the default for ads running on Google and the Search
Network. Most advertisers also choose it for their campaigns that focus on getting a direct response from their audience,
 
whether a sale, sign-up, or other action.

 
Maximum cost-per-click (maximum CPC)
The highest amount that you are willing to pay for a click on your ad. You can choose to set a maximum CPC for individual
 
keywords or for all the keywords within an ad group.

 
Cost-per-thousand impressions (CPM)
With some campaigns, you can choose to pay for views of your ad rather than clicks. The maximum CPM is the most you're
willing to pay for each thousand impressions, or views of your ad. CPM bidding is only available for campaigns that target the
 
Content Network and not Google search or search partner sites.

  page bid estimates

First
Your AdWords account will show a first page bid estimate for each of your keywords. This metric estimates the cost-per-click
 
(CPC) bid needed for your ad to reach the first page of Google search results when the search query exactly matches your
keyword. The first page bid estimate is based on the Quality Score and current advertiser competition for that keyword.
 
Optimization
An optimization is the process of creating/editing keywords and ad text (or adjusting other parts of the account) to improve the
performance of AdWords ads.

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10 
 
4.6 Coost Structture
 

Estimates of the pow wer required for over 4500,000 servers range upw wards of 20 megawatts,
m w
which
cost on thhe order of US$2
U millionn per month in electricityy charges.

Adsense Cost-The formula

fo is faamiliar: Sell ads, in manny cases aroound contennt Google dooesn't
own; turnn over the buulk of that revenue
r to thhe owner of the content;; repeat untill the end of time.
Google's business thhat runs ads around otheers' content and pays thhe owners thhe bulk of reelated
revenues. (For the first
fi three quuarters of 20007, AdSensse accountedd for 35% of o Google's gross
revenues.) This bussiness is lesss profitablee than AdW Words, which runs targgeted ads arround
Google's search resuults. And there are indicaators that gaap will widenn. The costs for eyeballss will
only go up as the other big onlline ad netw work compettitors--Microosoft, Yahooo!, and AOL L--all
tussle to lock up sittes that geneerate lots of quality trafffic, of whichh there are a limited nummber.
(For an online
o ad neetwork, morre traffic eqquals more datad equals better targetting equals more
money. Microsoft's
M $240 million bought onnly 1.6% off Facebook, but it kept that traffic from
Google.) Google's trraffic acquisiition costs--which incluude fees paidd to content players--com me to
almost 844% of its Ad
dSense revennues in the thhird quarter.

4.7 Diistribution
n Channeel
Exhibit XI

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10 
 
Exhibit XIII

4.8 Ide
eas 

They usee a process th hat lets ideaas really thrivve. Ideas comme from eveerywhere. Soome people think
that ideass come from m the top dow wn. Somethiing they com me from the bottom up. They come from
everywheere. Google has several active emaiil lists just for f ideas.. It's odd for a company off 200
people too have a misscellaneous mailing
m list. Employees compile all of those ideeas, discuss them,
t
and priorritize them. This
T is a tool at Google called Sparrrow. It's a typpical Web page, but it alllows
in-page editing.
e These are basiccally project ideas. Therre are also liittle widgetss. They pop up a
form, annd you can add a new ideeas to the liist. We literrally have hundreds
h if not
n thousands of
project iddeas that wee consider annd prioritize. If you makke the capturing of ideas simple andd low
cost, a loot of peoplee will share ideas. Snipppets. Those are brief weekly w reporrts from diffferent
teams. Thhey give an update on what w they're working
w on,, and it's a way
w to help self-organize
s e and
find efforrts that are correlated.
c

4.9 Exxperiments
 

Google launches
l its products quuick and ofteen. They bellieve that thee easiest thinng to do is put
p it
out theree to the publlic, listen to the feedbacck, and see what
w people think is im mportant. Thrrough
Google Labs
L is a grreat tool to get, immediiate responsses to a partticular idea and revive early
feedbackk on projectss. All these projects aree called Gooogletttes ( baaby Googless) startups within
w
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 “A Study on the Business Model of  Google “  2010 
 
the startups.. Another example is Orkut, which is named after one of Google’s core engineers.
We have something we call 20% time. Orkut's is actually the social coordinator for Google. But
because of his social network interests, Orkut dedicates his side time, his 20% time, to work on
whatever he wants to work on. Orkut started working on building this social networking site. He
sent a mail out to the miscellaneous list, and within hours, we had 1,000 employees signed up.
This really sparked people's imagination, thus Orkut was launched.

4.10 Recruitment
 

Many organizations have changed their pay or benefits in order to attract better workers, but no
one has changed every professional job in the company just so that the work itself is the primary
attraction and retention tool. Rather than letting work, jobs, and job descriptions be put together
by the "out of touch" people in corporate compensation, Google's founders (Larry and Sergey as
everyone calls them), HR director Stacy Sullivan, and the leadership team at Google have
literally crafted every professional job and workplace element so that all employees are:
- Working on interesting work
- Learning continuously
- Constantly challenged to do more
- Feeling that they are adding value.

The key element of changing the work so that the work itself becomes a critical attraction and
retention force and driver of innovation and motivation is what Google calls "20% work." There
is no concrete definition of what 20% work means, but generally for professional jobs it means
that the employee works the equivalent of one-day-a-week on their own researching individually
selected projects that the company funds and supports. Both Google Groups and Google News
products are reported to have started as a result of personal 20% time

But its greatest value is that it drives innovation and creativity throughout the organization. At
Google, innovation is expected of everyone in every function, not just product development. The
20% time, along with the expectation of continuous and disruptive innovation, has driven the
company's phenomenal success in product and service innovation. Yes, in this rare case, HR
activities and policies are actually driving corporate business success.

4.11 Value Proposition 
 

From its modest start as a search-engine research project at Stanford University in the mid-
1990s, the Google universe has expanded exponentially with new products and services. It's
already a word processor, e-mail service, smartphone, and aims to be a storehouse of every
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 “A Study on the Business Model of  Google “  2010 
 
printed word in human history. Google allows us to cruise the streets of New York and Rome,
or scour the surfaces of the moon and Mars. We can track global flu trends, monitor our
household energy usage or simply edit photos.

Google wants to own your every waking minute online--at home, while in transit, at your
workplace, wherever you happen to be. It makes connectivity so easy, on a desktop, laptop or
mobile phone. How much easier via a little-known business called Google Applications that
allows us to instantly share Google calendars, spreadsheets, memos, reports, e-mail, corporate
blogs, presentations and more--much, much more--by storing them in Google's enormous data
centers. These bundled office-suite services make Google money on subscriptions, but they are
also something of a Trojan horse to pull more people onto the Internet so that Google can make
even more money from ads. By expanding what kinds of information people organize and share,
as well as what they search, Google makes users ever more dependent on it to get through the
day.

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 “A Study on the Business Model of  Google “  2010 
 
Exhibit XIII List of Google Products

Desktop Standalone Applications  Chrome,Earth,Pack,Picasa,Talk,Sketch Up, Quick 
Search,Adwords Editor 
Desktop Extensions  Dashboard Widgets,Toolbar, Gears 
Online Mobile Products  Blogger ,Buzz,Calender,Gmail,News, 
Igoogle,Product Search,Reader,Picasa, latitude, 
Maps Navigation 
Downloadable Mobile products  Gmail, maps, sync,Talk,Voice, You Tube, 
Web Products  Account Management‐ Dashboard 
Advertising‐Adsense, 
Adwords,Optimizer,DoubleClick, Tv Ads 
Communication & publishing‐ Apps, 
Blogger,Buzz, Calender,Docs,Gadgets,Gmail, 
Igoogle,Orkut,Picasa, Reader, Voice, Wave, You 
Tube 
Development  Android, AppEngine,Code,Chrome OS, 
Mapping  City Tour,Map Maker,Building Maker,Mars, 
Moon,Sky Map, Transit 
Search  Alerts,Base, Blog Search, Book Search, Check 
Out,Dictionary, directory, Finance, Image 
Search, News, Product Search,Scholar,Vedio, 
Web History,WebSearch 
Statistics  Analytics,Gapminder,Trends 
Hardware  Google search appliance,Nexus one 
 
Source: http://en.wikipedia.org/wiki/List_of_Google_products#Standalone_applications

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5 Swo
ot Analysis 
 

Exhiibit XIV

STRENGTHS Weakness
King of Searcch One main ssource of revenue only
Top 10 Web brand
ds in US L
Lack of focus
Relevance Ran
R nking Advertising ‐ Only from tecchnological 
Extra Servicees p
perspective
Speed

S
SWOT
T
Threats
Opportunities Possibiility of censorrship
nmapped Countries
Un Users get lost/confuused
Reach new con
R ntent Print collecttion become leess visible
Information skills will disappear
L
Legal trials
Click fraud

6 Criiticisms  
 

6.1 Cliick Fraud  
 

Google has
h also been n criticized by
b advertiserrs regarding its inabilityy to combat click
c fraud, when
w
a person or automatted script is used to gennerate a chaarge on an advertisemen
a nt without really
r
having ann interest in the product..

6.2 Security 

There haave been somme concerns about nationnal security implicationss in Google Earth;
E conteention
is that the software can
c be used to
t pinpoint with
w near-prrecision accuuracy the phyysical location of

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critical innfrastructuree, commercial and resideential buildings, bases, government
g agencies, annd so
on.

Backlashh over Goog gle Buzz, thhe company's new sociaal-networkinng service, is i the latestt in a
series of launch fumb bles that somme argue revveal troublingg blind spotss within the Internet
I giannt.
Critics arrgued this deefault setup could inadvertently aid stalkers, jeoopardize jourrnalist sourcees, or
reveal onne's doctor orr psychiatrisst.

Google Earth
E has been
b criticizzed by a nuumber of speecial interesst groups, inncluding nattional
officials, as being an a invasion of privacy and even poosing a threeat to nationnal security.. The
typical argument
a is that the sooftware proovides informmation abouut military or other crritical
installatioons that could be used by terrorists.

7 Com
mpetitorrs 
7.1 Gooogle and Microsoft
M
 

Microsofft is a comppany that hass had one of the most dominant

d im
mpacts in thee IT industryy. So
without a doubt it iss Google’s biggest
b adveersary in 2010 and these two giantss will be loccking
their horrns for mark
ket supremaccy in areas such
s as searrch, collabooration toolls and brow wsers.
Talking ofo these two giants, Gooogle has reignned as leadeers in search,, but with reelease of BIN
NG in
May 20009, Microsofft has raisedd few questiions amongst in Google’s managem ment team. With
features such as rankking search results baseed on relevaancy to otheer users, Miccrosoft has inkedi
Bing-relaated deals with Twitter, Facebook
F annd Yahoo.

The closeer you look at the two coompanies, thhe more alikke they seem
m, especially when it com
mes to
finding and
a acquirin ng complem mentary technnology. While powerhoouse productts like Micrrosoft
Word and Excel werre developedd in-house, many
m other tools
t and serrvices came from outsidde the

28   
 
 “A Study on the Business Model of  Google “  2010 
 
company. In 1987, Microsoft bought a small company called Forethought for $14 million,
snagging its PowerPoint presentation software in the process. And in 1997, it bought Hotmail,
which to this day remains one of the largest web-based e-mail services. "They're really similar
companies," says Dempsey, who before joining Google worked in Microsoft's corporate
development department. "They're both software companies. The software DNA is the same for
both. And both favour smaller deals. Microsoft has just been an acquirer of companies for a
longer period of time."

Microsoft collects sales and licensing revenue for its products, Google's business model relies
overwhelmingly on selling ads around its services. Despite its foray into so many different
sectors, a whopping 97% of Google's revenues still come from web- and search-related ads. And
for all the takeover deals it's done, Google has yet to come up with an alternative revenue
stream.

Google's attack on Office is likely to be much tougher and slower. The fact remains that
Microsoft has long-standing customer relationships across the globe, a network of consultants
and integrators, and a strong customer support system. Besides, Microsoft is already making
moves to the cloud, such as with June's launch of Office 2010.
But there are problems. First of all, the infrastructure costs for cloud-computing are higher
than traditional software. This could lessen the margins on Office, which are a staggering 64%.
Also, as Google gets more traction, there will likely be downward pressure on pricing.

The Wall Street Journal reported that Google says Microsoft is waging a global proxy
campaign to cause trouble for Google with antitrust authorities around the world. As evidence,
Google points to two European companies -- both with ties to the software giant in Redmond,
Wash. -- that have filed complaints about Google with European antitrust authorities.

Google Apps is designed to undercut sales of Microsoft products, including Exchange and
SharePoint. Microsoft has responded with Office Web Apps, free Web-based versions of Word,
Excel, PowerPoint and OneNote that are due out in 2010. Last but not the least; the browser war
between these two is giants are likely to heat up in 2010. So 2010 awaits the answer if ever so
popular Microsoft’s premier browser’s market share could be brought down

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7.2 Go
oogle and A
 Apple 
 

Being froom partners to rivals, Apple

A is onee of the strinngent opponnents for Gooogle in the year
2010. Tooday, Applee and Googlle have beenn locking thheir horns in the field of Smartph hone,
Mobile App
A Store, OS, O Mobile Ad, and On nline Music and so on. Likewise,
L Appple is moree than
up to thee task of baattling Googgle in these areas as well as browsers, where Google Chhrome
competess against Ap pple Safari. But battle between
b will intensify, as the markket for the digital
d
music annd SmartPho ones is all set
s for grow wth in 2010. Google’s music searcch along witth its
partner MySpace
M and
d Pandora arre looking too compete withw Apple’s iTunes, which was the No 1
music reetailer in Unnited States in 2009. Further, Gooogle’s Androoid will havve tough tim me as
Apple’s iPhones
i conttinues to graab hold of thhe market all round the globe.
g

Apple's (AAPL)
( blo
ockbuster law
wsuit again nst phone-m
maker HTC C is clearly aimed
a at Gooogle
(GOOG), which hass been leapinng into the mobile phone business. If Apple can
c hobble HTC,
H
which manufactures
m Google's Nexus
N One phone, it coould kneecaap the searcch giant's mobile
m
ambitionns.

"We cann sit by and watch comppetitors steaal our patentted inventions, or we can do someething
about it,"" Apple CEO
O Steve Jobss said in a sttatement. "W
We've decideed to do som
mething abouut it."
The suit was filed concurrentlyy with the U.S. Internaational Tradde Commisssion and in U.S.
District Court
C in Delaaware.

This law
wsuit is the laatest episodee in a remarrkable fallingg out between Apple annd Google. Just
J a
year ago, Google CE EO Eric Schhmidt sat onn Apple's booard. He left ft last Augusst as Googlee was
preparingg to roll out Android
A phoones in direcct competitioon with Applle's iPhone.

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7.3 Go
oogle and Y
 Yahoo 
 

When it comes to search,

s one of Google’s biggest coompetitors besides
b Miccrosoft is Yaahoo.
Yahoo has
h been in the market with varietyy of products in areas of email, Messenger,M N
News,
Search annd Analyticss services. So
S without doubt
d it will be a fearsom
me competitor for Google. In
2009, Yaahoo made so ome improvvements in 20009 by integgrating searcch with its ricch content. Users
U
can watch videos or stream
s music straight froom the Yahooo search ressults page.

Yahoo allso helps useers find traveel deals and compare prooduct prices. Further, Yaahoo has reccently
added Tw witter to its search Pagee and if a jooint search and
a advertisiing deal betw ween Yahooo and
Microsofft is approveed by federall regulators. This could prove
p costlyy to Google so
s the 2010 is i the
year to watch
w as oth
her competitoor look to outperform
o G
Google in thhe market wiith different joint
forces beeing formed by their rivaals.

7.4  Go
oogle and  Amazon  
 

 
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In 2009, Google’s efffort of scannning millioons of out-off-print bookks and incorrporating theem in
online seearch did gaiin up some momentum
m a helped thhemselves too publish ovver 500000 digital
and d
books forr free to cusstomers of Soony Reader and Barnes & Noble Noook, which is i due in Jannuary.
Further, there
t claimss of opening up Google Editions,
E an e-book storre, has openeed up new riivalry
with Amazon.

Amazon with its Kin ndle e-book reader

r is onee of the leadders in e-boook reader’s market.
m The other
area wheere Google iss taking on Amazon
A is inn cloud com
mputing. Gooogle’s Apps Engine,
E a neewbie
cloud com mputing plaatform that allows
a devellopers to creeate their owwn Web applications andd run
them on Google’s in nfrastructuree will be coompeting wiith Amazon’s Elastic Computing
C C
Cloud
(EC2) whhich has alreeady grab hoold of markett with its sevveral upgradde after its reelease in 20006. So
it will bee a great baattle to watchh when thesse two giantts fight for market
m suprremacy on Cloud
C
computinng and E-boo ok readership.

7.5 Go
oogle And  Facebook
k 
 

Facebookk is well armmored with its mass apppealing social networkinng site whilee Google is fully
equippedd with its div
versified prooduct portfollio. But for both
b of these companiess, the real money
m
is on adss. Google haas around 900% of its revvenue cominng from the ads a while Faacebook hass over
70% of revenue
r com
ming from adds. So, puttinng both thesse biggies onn the same plate,
p we seee that
advertiseement is the cash cow foor them. Bothh these com mpanies bankk on user datta to move up u the
profit. Ultimately, th
hat is what both
b these giiants are figghting for – increasing
i u base so as to
user
increase the probabillity of increaasing the revvenue In 20110, Google and
a Facebookk rivalry is likely
l
to heat upp based on question
q thaat where willl people findd there inform
mation in fuuture in Searrch or
Social Network?
N With
W ever inccreasing usee of social networkingg and the riise of Facebbook,
Google’ss worry seem ms to a viablee one. So, inn 2010 Googgle with its ORKUT
O willl be in battlee with
Facebookk.

Orkut off
ffers Google Friend Connnect, a tool for Web pubblishers to addd social neetworking coontent
to their sites, in diirect compeetition with similarly named
n Faceebook Connnect. Meanw while,

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Facebookk has soughtt out relationnships with several
s arch--enemies of Google, inccluding Micrrosoft
and Yahooo. So it is for
fo sure that this
t battle is worth takinng a note off in 2010.

Source: compete.com
c m

7.6  Go
oogle and  Cisco 

Google definitely
d haas a tough chhallenge agaainst Cisco. With years of experiennce on web based
b
collaborative platfo
orm, WebExx, and superrior VOIP service,
s Ciscco poses a thhreat to Gooogle’s
Wave annd Voice. Inn addition too this, Ciscoo also is loooking to enhhance its viddeo conferenncing
quality by
b focusing g on collabooration throough interneet video, deesktop videoo and conssumer
Telepreseence.

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In addition to this, Cisco’s
C pressence in Clooud is anothher leading edge
e it has over Googlee. As
Google is
i looking to o take everytthing to the web, it certtainly will faace a good competition
c from
Cisco on this front.

Moreoveer, according g to Networkkworld, Ciscco is lookingg to enter innto Smartphoone market in

i the
very neaar future (acttually by mid-2010). Itss recent acqquisition of Pure
P Digitall and Flip shows
Cisco’s intent
i to takee video to thhe mobile phhone. Thus, we
w might seee Cisco giving a hard tim me to
Google’ss Nexus Onee in the comiing days.

7.7 Go
oogle and IIBM 
 

Source: dailybits
d

2010 is likely
l to reo
open Google’s rivalry with
w IBM witth the releasse of new coollaboration tools
such as Google Waave. Googlee has stepped into thee battle fieldd with its low cost hosted
collaboraation tools su
uch as Googgle Apps. Gooogle will coompete againnst IBM’s Lootus Lives, which
w
has attraccted more th
han 2 millionn businesses in the last tw
wo years.

7.8   G
Google and
d Nokia 

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Source: nae.es
n

Today, Nokia
N has haad grab hold of the mobiile phone maarket with 4 out of 10 mobiles
m sold. With
increase in use of sm mart phoness, means thee IT giants Google
G will be in rivalrry with Nokkia in
peripheryy of operatinng systems for
f Smartphoones. Symbiaan Open souurce operatinng system will w be
competinng with Goo ogle’s Androoid. Nokia with
w recent deals with Microsoft iss all set to bring
Office Mobile
M to Sy ymbian deviices. With claim
c of releeasing improoved versionn of Symbian in
2010 means Google Android willl have to faace off toughh battle. But, Google’s Android
A is poised
for major developmeents in 20100 and with commitmentts from Aceer, Sony Eriiccson, HTC C and
Motorolaa this will bee a worthwhiile battle to watch
w in 20110 and years to come.

So, at thiis point one may

m feel Gooogle has touugh battle to fight in 2010. Most of the t arch rivals are
gearing upu to poise serious
s threaats either sinngle handed or with colllaboration. So,
S 10 line ups
u of
interestinng battle is all set to keeep the 2010 interestingg enough foor us to wattch and keepp the
Google ono their toes..

7.9  Go
oogle and  Mozilla 
 

Source: grraphicsguru

With releease of Goog gle Chrome,, Google hass stepped intto ever so poopular browsse battle. Moozilla
has been in the markkets for yearss and now thhis step fromm Google is likely
l to creaate the confllict of
interest between
b thesse two. Of laate the war between
b the two has heaated up even more. The battleb
has now gone to deefault searchh. Mozilla now n has shoown intent to t kick Gooogle out from m its
default seearch enginee status. Thee latest rumoours on the internet
i show
w that Mozillla is now eyyeing
to get a deal
d with Microsoft
M to make
m Bing as
a its defaultt search enggine in Firefoox. This maay not
impact Google
G imm
mediately buut eventuallyy this movee, if comess true, is likkely to deccrease
Google’ss share of thee search marrket. Hence, Google now w has Mozillla on a doubble war zone; first
the obvioous browser war and now w the war ovver default seearches.

35   
 
 “A Study on the Business Model of  Google “  2010 
 
8 The Road Ahead 
 

Google‘s chief executive Eric Schimdt predicted a massive shift of advertising revenues from the
fixed web to mobile platforms similar to that of print publications to the internet. The change
would happen because mobile advertising could be more precisely targeted, making it more
effective. When Google Inc. in January began to sell its Nexus One mobile phone from its own
web site, online retailers could be forgiven for worrying the search engine giant one day might
stomp all over them.

What’s more, Google’s vast store of knowledge about consumer behavior, and about how that
behavior is changing minute to minute, would give Google an extraordinary leg up as a web
retailer. “They know what people want through search, they know what is hot. It’s almost an
unfair advantage,” says Kevin Lee, CEO of search engine marketing firm Didit.com LLC.

It’s not clear how far Google intends to press that advantage. But the company has said that its
Nexus One e-commerce site, Google.com/phone, will not be its last venture into selling directly
to consumers via the web. “It’s the first in what we expect to be a series of products which we
will bring to market with our operator and hardware partners and sell through our online store,”
Mario Queiroz, the company’s vice president of product management, wrote in a blog post as the
phone went on sale.

Google Editions, meanwhile, is set for launch in the first half of the year. Customers who buy e-
books from this Google store will be able to access the works through most computer, phone or
e-book readers. This device-agnostic approach sets it apart from Amazon, which uses a
proprietary e-book format designed primarily for its own Kindle reader.

The plans in the works suggest Google is likely to focus on selling digital goods, such as e-books
and entertainment content, taking advantage of its vast web infrastructure and massive amounts
of data about online shoppers. Moving further into hard goods would require Google to invest in
warehouses and distribution networks, which would be a big departure for this web-centric
company.

Whatever direction Google takes, data from search will serve as a guide, and any moves into
retail likely will boost Google’s core business. Every click a consumer makes when conducting a
search and every word used in a Gmail message, helps Google better understand what consumers
are looking for, when they are looking for it and where that search comes from. Google can use
that data to stay on top of trends and build ever more detailed pictures of various consumer types,
advantages for any retailer.

36   
 
 “A Study on the Business Model of  Google “  2010 
 
Google has said it wants to go carbon neutral. With the FERC order, it can now effectively
erect as many solar panels and install as many fuel cells as it likes without worrying about
having purchased too much capacity; the company can now sell off the extra power it generates.
Google can now exploit its massive data centers to provide services for controlling power
consumption in commercial buildings, industrial sites, and homes. Google PowerMeter,
currently in beta, allows you to see your own electricity usage information (on iGoogle widget)
and helps you to improve your efficiency in a variety of ways. Google PowerMeter receives
information from utility smart meters and energy management devices and provides customers
with access to their home electricity consumption right on their personal iGoogle homepage.

Real and potential missteps aside, it’s hard to forget that Google already has transformed, indeed
practically created, the online advertising industry. And it has the financial heft and the
constantly growing storehouse of data to potentially alter online retailing, even if the elephant
has yet to hit its full stride.

9 Annexure 
 

Exhibit XV

Google Vision  
Focus on the user and all else will follow.
It's best to do one thing really, really well.
Fast is better than slow.
Democracy on the web works.
You don't need to be at your desk to need an answer.
You can make money without doing evil.
There's always more information available.
The need for information crosses all borders
You can be serious without a suit
Great just isn't good enough
 

 
 

37   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
Exhib
bit XVI Incoome Statemeent In Millioons of USD

Source:: Google Finannce

Exhiibit XVII

Sourcce: Google Finnance

Exh
hibit XVIII

Revenue ( % of revenuees) 2009 Q44

Google Weebsites 66%
Google Neetwork Websitees 31%
Licensng and
a other reven
nues 3%

38   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
Exxhibit XIX

Source: Google In
nvestor Relatioons

Exxhibit XX 

S
Source:http://m
marketshare.hittslink.com/( as on March 20110)

39   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
X  I 
Exhibit XX

Source:http://marketsha
are.hitslink.com
m/ /( as on Marrch 2010)

Exhibit XXII
X

Source:http://marketsha
are.hitslink.com
m/ /( as on Marrch 2010)

40   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
Exhibit XXIII
X

 
 Source:htttp://microrevieews.org/files/2
2009/10/EmaillMarketShare.jjpg 

41   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
Exhibit XXIV
X

 
Source: se
earchenginew
watch.com/363
35350 

Exhibit XXV-
X Stock Price

42   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
Source: htttp://www.goog
gle.com/financee/historical?q=
=NASDAQ:GO
OOG

Exhibit XXVI-
X Merg
gers and Aquuisitions

Numb Acquisition Company Businesss Coun

ntry Valu
ue Used
d as / Integraated
er date (USD
D) with

1 February Deja Usenet Googlle Groups

12, 2001 USA
A

2 September Outride Web searchh Googlle Personalizeed

20, 2001 engine A
USA Searchh (iGoogle)

3 February Pyra Labs Weblog Blogger

2003 software USA
A

4 April 2003 Neotonic Customer Googlle Groups, Gm

mail
Software relationshipp USA
A
managemeent

5 April 2003 Applied Online $102,000, AdSennse, AdWordss

Semantics advertisingg USA
A 000

6 September Kaltix Web searchh iGooggle

30, 2003 engine USA
A

7 October Sprinks Online AdSennse, AdWordss

2003 advertisingg USA
A

8 October Genius Blogging Blogger

2003 Labs USA
A

9 May 10, Ignite HTML editor

2004 Logic USA
A

10 June 23, BaiduA Chinese $5,000,00 Baidu

2004 language seearch N
CHN 0

43   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
engine

11 July 13, Picasa Image Picasaa, Blogger

2004 organizer USA
A

12 September ZipDash Traffic anaalysis Googlle Maps for

2004 USA
A Mobile

13 October Where2 Map analysis Googlle Maps

2004 AUS
S

14 October 27, Keyhole, Map analysis Googlle Maps, Googgle

2004 Inc USA
A Earth

15 March 28, Urchin Web analyytics Googlle Analytics

2005 Software USA
A
Corporati
on

16 May 12, Dodgeball Social Googlle Latitude

2005 networkingg A
USA
service

17 July 2005 Reqwirele Mobile broowser Googlle Mobile

ss CAN
N

18 July 7, Current Broadbandd $100,000, Interneet backbone

2005 Communi internet acccess USA
A 000
cations
Group

19 August 17, Android Mobile Androoid

2005 software USA
A

20 November Skia Graphics Androoid, Google

2005 software USA
A Chrom
me Browser

21 November Akwan Search Enggines Interneet backbone

17, 2005 Informati BRA
A
on

44   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
Technolo
gies

22 December AOLB Broadbandd $1,000,00

20, 2005 internet acccess USA
A 0,000

23 December Phatbits Widget enggine Googlle Desktop

27, 2005 USA
A

24 December allPAY Mobile Googlle Mobile

31, 2005 GmbH software GER
R

25 December bruNET Mobile Googlle Mobile

31, 2005 GmbH software GER
R

26 January 17, dMarc Advertisingg $102,000, AdSennse

2006 Broadcast USA
A 000
ing

27 February Measure Weblog Googlle Analytics

14, 2006 Map software USA
A

28 March 9, Upstartle Word processor Googlle Documentss

2006 USA
A

29 March 14, @Last 3D modelinng Googlle Sketchup

2006 Software software A
USA

30 April 9, Orion Web searchh Googlle Search

2006 engine S
AUS

31 June 1, 2Web Online Googlle Spreadsheeet

2006 Technolo spreadsheeets USA
A
gies

32 August 15, Neven Computer Picasaa

2006 Vision vision USA
A

45   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 

33 October 9, YouTube Video sharring $1,650,00 YouTuube

2006 USA
A 0,000

34 October 31, JotSpot Web Googlle Sites

2006 applicationn USA
A

35 December Endoxon Mapping $28,000,0 Googlle Maps

18, 2006 CHE
E 00

36 January 4, XunleiC File sharingg $5,000,00

2007 CHN
N 0

37 February Adscape In-game $23,000,0 AdSennse

16, 2007 advertisingg USA
A 00

38 March 16, Trendalyz Statistical Googlle Analytics

2007 er software SWE
E

39 April 17, Tonic Presentatioon Googlle Documentss

2007 Systems program A
USA

40 April 19, Marratech Videoconfe

ferenc $15,000,0 Googlle Talk
2007 ing E
SWE 00

41 April 13, DoubleCli Online $3,100,00 AdSennse

2007 ck advertisingg USA
A 0,000

42 May 11, GreenBor Computer Googlle Chrome

2007 der security USA
A

43 June 1, Panorami Photo shariing Panoraamio

2007 o ESP

44 June 3, FeedBurn Web feed $100,000, FeedB

Burner
2007 er USA
A 000

45 June 5, PeakStrea Parallel Serverr (computing))

46   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 
2007 m processing USA
A

46 June 19, Zenter Presentatioon Googlle Documentss

2007 program USA
A

47 July 2, GrandCen Voice overr $45,000,0 Googlle Voice

2007 tral Internet USA
A 00
Protocol

48 July 20, Image Aerial Googlle Maps

2007 America photographhy USA
A

49 July 9, Postini Communiccation $625,000, Gmail

2007 s security USA
A 000

50 September Zingku Social netw

work Googlle Mobile
27, 2007 service A
USA

51 October 9, Jaiku Micro-bloggging F

FIN Googlle Mobile
2007

52 July 30, Omnisio Online video $15,000,0 YouTuube

2008 USA
A 00

53 September TNC Weblog Textcuube.com

12, 2008 (Tatter software KOR
R
and
Company)

54 August 5, On2 Video $

2009 compressioon USA
A 124,600,0
00

55 September reCAPTC Security

16, 2009 HA USA
A

56 November AdMob Mobile $750,000,

9, 2009 advertisingg USA
A 000

47   
 
 “A SStudy on
n the Bu
usiness Model o
of  Googlle “  201
10 
 

57 November Gizmo5 VoIP $30,000,0 Googlle Voice

9, 2009 USA
A 00

58 November Teracent Online Adsennse

23, 2009 Advertisingg USA
A

59 December AppJet Collaboratiive Googlle Wave

4, 2009 (EtherPad real-time editor USA
A
)

60 February Aardvark Social Searrch $50,000,0

12, 2010 USA
A 00

61 February reMail Email Searrch Gmail

17, 2010 USA
A

Source: Wikipedia
W

10 Refferences  
 

1. D
Dr. John Sulllivan, A Casse Study of Google Reccruiting,httpp://www.drjoohnsullivan.ccom/,
Jaan2,2010.

2. Nicholas
N G Carr,
C The Gooogle Enigm
ma,http://ww
ww.strategy-bbusiness.com
m/ ,Jan 2,20110

3. Sergey Brin and Lawrennce Page, Th he Anatomyy of a Largge Scale Hyypertextual Web
Search Enginne, http://inffolab.stanforrd.edu/pub/ppapers/google.pdf ,Jan 20, 2010

4. R
Rob May, Sw warm Theoory and Corporate Strrategy, http://www.busiinesspundit.ccom/,
Jaan 20,2010

5. B
Brent Humm mer, Greg Jones,
J Audrre Wilde, Steve
S Ellisoon, Google Strategic Plan,
P
htttp://www.d
dailyspeculattions.com/, Jan
J 20,2010

6. Sheriff Ramaadan,Google Marketingg Secrets , htttp://ezineartticles.com, Jan

J 20,2010

48   
 
 “A Study on the Business Model of  Google “  2010 
 

7. Stephen E. Arnold, Where is Google Going, http://www.googleguide.com/ Jan 27,2010

8. Google Guide , http://www.googleguide.com/, March 7,2010

9. Tom Taulli, Google takes another shot at Microsoft Office, www.dailyfinance.com,

March 7,2010

10. Sam Gustin, Google Backs Its Handset Maker in Phone War with Apple
,http://www.dailyfinance.com/ , March 7,2010

11. 10 Toughest competitors of Google, http://technology.globalthoughtz.com, March

7,2010

12. Kirby, Jason, How Google really does it, Canadian Business, 10/13/2009, Vol. 82 Issue
18, p54-58, 4p,Feb 28,2010, March 8 2010

13. Hardy, Quentin, When Google Runs Your Life, Forbes; 12/28/2009, Vol. 184 Issue 12,
p88-93, March 8 2010

14. Fine, Jon, Google and Other People's Content, BusinessWeek; 12/3/2007, Issue 4061,
p075-075, March 8 2010

15. http://en.wikipedia.org/wiki/Google, March 8 2010

   

49