Company Overview

Google is in the technology sector, under the internet information providers industry. Google began as a search engine, and has grown to include so many other products, such as Google Maps, Google Chrome, Google +, Gmail, and many more.

Since Google is constantly growing and changing, it makes sense that their goals would be doing the same. The goals for 2012 are all about converting more people to be Google users. The two systems that they are marketing this year the most are Google +, a social network, and Google Chrome, an operating system offered as an alternative to Internet Explorer. (Retrieved from http://www.internetevolution.com/author.asp?section_id=983&doc_id=237489 August 30, 2012).

See this YouTube video clip for a short customer testament for Google search engine (click here).

Company History

Google’s founders, Larry Page and Sergey Brin, set up Google in a garage in September 1998. They had been developing a search engine for over a year, originally named BackRub. By December 1998, PC Magazine reported that Google “has an uncanny knack for returning extremely relevant results” (Retrieved from http://www.google.com/about/company/history/#top August 30, 2012).

No longer just a search engine, Google now offers Blogger, which is an easy-to-use blogging website, again free to customers. Google + is becoming more popular, which is a social media site similar to FaceBook or Twitter. Google Maps is also available, which allows users to search for addresses, directions, and even allows them to see pictures of their destination.

Larry Page became the CEO of Google in 2011. (Retrieved from http://www.google.com/about/company/history/#top August 30, 2012).

Company Production

Google’s main product that most internet users are familiar with is their search engine. However, two of their newer products that they are focusing on promoting right now is Google Chrome and Google +. Google targets younger adults for their products. Microsoft has set their default search engine to Bing, so the people who are using Google either changed the settings or are using a different operating system, meaning they are likely more tech savvy (Retrieved from http://www.seodesignsolutions.com/blog/search-engine-optimization/comparing-google-and-bing-demographics/ August 30, 2012).

Google’s search engine is still in high demand. In February of this year, “Google still garnered 66.4 percent of all searches made on the web” (Retrieved from http://www.pcworld.com/article/251626/google_remains_king_in_searches_hearts_and_minds.html  August 30, 2012). This is a demand that Google has no problem meeting. Google runs on thousands of servers all over the world, so it is more than capable of handling the requests of the number of people that use it.

Google’s services fall under the tertiary stage of production. Essentially they need to staff their employees, build the software/programs that they offer to the public, and then maintain them to ensure that they are always running properly and up-to-date with what their customers need and expect.

Google’s famous for the perks that they provide for their staff. One of these perks is 20 percent time. Essentially, employees are given 20 percent of their scheduled work time as down time to pursue their own activities. Google execs believe that by allowing their staff to have downtime to “think”, they will be more productive. They claim that some great ideas have come from this downtime, such as Google news and Gmail. However, it could be argued that these ideas could still have been formed without taking 20 percent of the work week to think of them, and that Google is actually losing productivity with this perk. (Retrieved from http://abcnews.go.com/Technology/story?id=4839327&page=1#.UEPF5I2PWa8 August 27, 2012).

Company Costs and Profits

Google’s products and services are free, for the most part. Anyone with internet access can log in to Google’s search engine, Google maps or Gmail at no cost to themselves. Google’s new internet browser, Google Chrome, is also a free download. One example of a product that Google charges the public for is Google Earth Pro, selling for $399 (Retrieved from http://support.google.com/earth/bin/answer.py?hl=en&answer=21406 August 27, 2012). Another item that customers get charged for is Google Apps for Business, which can be purchased for $5 a month or $10 a month. (Retrieved from http://www.google.com/enterprise/apps/business/pricing.html August 31, 2012). For the most part, however, their products are free to the public.

Some of Google’s fixed costs are the mortgage/rental costs of their offices, insurance costs, and licensing and fees for their software/web pages. Also, the labour costs of salaried, upper level employees would likely be fixed as well. Some variable costs would be labour (especially in positions with higher turnover), utilities for the buildings, and marketing costs.

According to Google, 96% of their revenue is generated from their advertisers. The below information comes from their financial statements on the SEC website:

(Retrieved from http://sec.gov/Archives/edgar/data/1288776/000119312512025336/d260164d10k.htm August 31, 2012).

The Competition

Google’s strongest competition is Bing. In 2011, Google still had 64.42% of the US search market using their search engine. Although they still have two thirds of the market cornered, Bing is steadily growing bigger, and they’re taking users away from Google. (Retrieved from http://mashable.com/2011/04/11/bing-google-stats/ August 30 2012).

What’s Google’s competitive advantage? Brand loyalty. Google users resemble Apple users in that once they use one of their products, they use several, and they stay loyal. People using Google search engines probably be more likely to use Google email (Gmail), Blogger, Google Earth and Google +. They’re also marketed to a younger demographic than Bing, and the younger generetion spend more time online than Bing’s older target market.

Summary

Google has succeeded largely in part due to the fact that they are constantly growing and updating to meet the needs of their customers, and the brand loyalty of those customers that has been built over the years.  Until recently, they were pretty much unrivalled in their industry. Their position is now being challenged by Bing. One possible weakness that I can see is that Google manages to stay above Bing by attracting the younger, more tech savvy generation, whereas Bing is used more by an older demographic. This could change, however. Last year, Bing partnered with the CW in their ad campaign “tv to Bing about” (Retrieved from http://searchenginewatch.com/article/2109349/Bing-Partners-with-CW-for-Integrated-Advertising August 31, 2012). If Bing is able to lure some of the younger demographic with campaigns such as these, Google could find themselves losing the lead – in the search engine area that is.

Google, I’m sure, will continue to do well however. With a host of other products and services such as Gmail, Google Maps and Google Chrome, Google promises to be a main contender in their industry for some time to come