business project part one

8/13/2019 Business Project Part One

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Business Project Part One Google Inc.

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Business Project Part One Google, Inc.

Google, Inc. is a for-profit company with headquarters in Mountain View,

California and locations throughout the United States and world including Australia,

Brazil, Canada, China, France, Germany, India, Ireland, Israel, Japan, Kenya, and the

United Kingdom. (Google, Inc., 2013) According to Google Investor Relations, the

company derives the majority of its revenue from advertising on the Google search

engine, Gmail, Google+ and other Google owned properties. They also receive

revenue through partners that use the Adwords program to advertise on the partner

sites. Advertising may be the main source of revenue for the company but they are

best known as the most popular search engine on the Internet. Googles mission is

to organize the world's information and make it universally accessible and useful.

(Google, Inc., 2013) This starts with their search engine but has branched off into

products and services that utilize the information they have gathered for the profit

of the company. The company operates many free services like Gmail for email,

Google+ for social media, and Google Maps for navigation that have the Google

advertising on the services. The company also produces the Android operating

system for mobile devices that is now on more devices worldwide than any other

mobile operating system. (Mlot, 2013)

Google, Inc. A brief history

1995-1999

Google, Inc. is only 15 years old but in that time has accomplished much more than

most companies accomplish in their lifetime. The companys constant push to be


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innovative and their work with the open source community has produced several

services that are now the go to service for consumers. The roots of the company are

in a chance meeting in 1995 when Larry Page was visiting the Stanford University

campus as a possible place to do his post graduate work. Sergey Brin was already at

the university working on his graduate work. When Page returned to Stanford in

1996 the two began a collaboration called BackRub, a search engine that focused

on backtrack links to websites. In 1997 they renamed their project Google as a play

on words for the mathematic term Googol which is the number 1 with 100 zeroes

after it. In 1998 they showed their project to Sun Microsystems co-founder Andy

Becktolsheim and he wrote a check for $100,000 for a company that had not even

been formed yet. Shortly after receiving the check the pair setup shop in Susan

Wojcichis garage and incorporated Google. They got a big break when PC Magazine

named Google the search engine of choice for the 1998 top 100 best websites. In

1999 the company opened its first headquarters in Palo Alto, California and in that

same year opened a second office in Mountain View, California which would

eventually become the home of their headquarters.

2000-2006

2000 is the year that Google became the largest search engine with over 1

billion URLs indexed. This was also the year that Google began the project that

would become the basis for their business model. Adwords was launched with 350

customers but now represents the majority of the companys revenues. In 2001 the

company made its first public acquisition with a purchase of Deja.com, a Usenet


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Discussion Service that is the basis for Google Groups. This is also the year that Eric

Schmidt was named Googles first Chairman and later CEO while Larry Page became

the President of Products and Sergey Brin the President of Technology. Google also

opened up its first international office in Tokyo, Japan. 2002 is the year that Google

News launched with over 4000 news sources. 2003 was an unusually quiet year for

Google and most of this can be attributed to the companys 2004 IPO (initial public

offering). The Google stock debuted at $85/share and trades on the Nasdaq Stock

Exchange. In 2004 the company also made an important acquisition in the company

Keyhole that would later become Google Earth. 2005 saw the release of Google

Maps, Google Analytics, and Google Reader was introduced at the Web 2.0

conference. 2006 was the year that company acquired Writely and using the

technology created Google Docs. The most important acquisition of 2006 was

YouTube.

2007 and Beyond

In 2007 Google announced the Android Operating System for mobile devices.

The new mobile platform would be open source (freely available to anyone that

wanted the code) and built on Linux. Despite the announcement the company

released their first downloadable app for iPhone 3G. In 2008 the company had some

confusion over the release of the Google Chrome browser that was mistakenly

announced in a comic the day before the actual release. T-Mobile announced the G1,

the first Android-based mobile phone while Google celebrated its 10thanniversary.

The power of search engines became front page news when Google found a


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correlation between certain search queries and CDC data related to flu symptoms

two weeks earlier than traditional flu surveillance systems. (Google, Inc., 2012) In

2009 Google announced work on a new operating system for desktop and laptop

computers based on their Chrome browser. Google made Chrome OS an open source

project named Chromium. (Google, Inc., 2012) Google followed this announcement

up with plans to release the Nexus One mobile phone as a representation of what

Android-based mobile phones should function. 2010 saw a flurry of releases with

the ill-fated Google Buzz (Koetsier, 2013), Google Apps Marketplace (Now Google

Play), Google TV, self-driving cars, and the long-awaited acquisition of AdMob.

(Kincaid, 2009) In 2011 co-founder Larry Page took over as CEO and signaled a

return to the startup nature of the company. (Lee, 2011) The company had

struggled in the social media landscape with the failure of Google Buzz and Google

Wave but in 2011 the +1 began to crop up on Google websites and then on sites

not owned by Google. The Google+ network brings the best of Facebook and Twitter

to your Gmail account and has enjoyed rave reviews but has yet to gain a solid

foothold. (Clark, 2013) Google made a very controversial move in 2011 by acquiring

Motorola Mobility. Many of Googles Android partners thought that the move would

give the Motorola brand an unfair advantage in the Android market but Google

assured the partners that it would not. Despite this several of Googles largest

partners have begun work on their own operating systems or have shifted to the

Windows 8 mobile platform. (Decker & Womack, 2013)


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Googles Not-So Invisible Hand

Adam Smith coined the term Invisible Hand and it represents the process

that turns self-directed gain into social and economic benefits for all. (Library of

Economics and Liberty, 2008) The history of Google represents this very well.

Google is a for-profit company that prides itself on work that it does to make the

world a better place. The company takes advantage of the four basic rights of

capitalism but does so while making the world a better place to live. The green

initiatives by the company have helped them achieve an extremely low carbon

footprint while still producing otherworldly profits. While Googles founders started

the business for profit they have also promoted innovation outside of their normal

business by developing products like Android that created competition and choice

in a market that was formerly dominated by the Apple iPhone.

The economic environment at Google would be considered an oligopoly but

even that description doesnt fit for Google. They have been called a monopoly

before but I like Glenn Manishins description in his article on Forbes (Manishin,

2012):

Like the Red Queen in Through the Looking Glass, Google succeeds only by

running faster than its competitors merely to stay in the same place.

Most of Googles services are free and their main source of revenue is priced by an

auctioning system by the advertisers. Manishin also points out that the growth of

Bing in the last couple of years is proof that is not a high entry to the market of

online search.


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Is Google a Utility?

In his June 7, 2012 op-ed piece in the Wall Street Journal, Jeffrey Katz, CEO of

online shopping comparison site Nextag, alluded to the idea of making Google a

public utility. His claim is that the search engine enjoys an extraordinary market

share but is not transparent about the algorithm that they use for search results.

Katz went on to say that the algorithm punishes competitors of Google and rewards

advertisers with higher search rankings. (Katz, 2012) Google is regulated like any

other company in the United States from the financial side of the business but their

business activities are more and more coming under the microscope for anti-trust

laws specifically in the European Union. (Katz, 2012) Outside of these regulations

the government also has a relationship with Google through their Google apps for

Government. This version of Google Apps is not much different from the same

version used by schools and businesses except that it provides the security

measures required by the government.

Google, Inc.

Google is incorporated in the state of California. (Google, Inc., 2012)

Incorporation has given Google a chance to protect founders and shareholders from

liability and given the company the ability to raise much needed capital through the

issue of stock. Google is definitely an entity into of itself. We refer to Google not just

as a noun but as a verb and the complexity and reach of the company is only

possible from the diverse operations that they have. The disadvantage for Larry

Page and Sergey Brin is that they are sharing the wealth with people that own stock.


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This is a catch-22 though because without that investment the company would not

have the buying power to take the risks that they have taken. (Lee, 2011) (Manishin,

2012)

How Green Can a Company Get?

Google has taken corporate citizenship serious from the beginning. Their

unofficial slogan Dont be evil has encouraged the leaders of the company to

approach corporate citizenship from any different directions. Non-profits are

encouraged to apply for grants for free advertising through the companys Google

Adsense program giving these non-profits a way to get the word out about what

they do. The company has invested over $750 million into renewable energy

through wind farms and solar panels. (Google, Inc., 2013) (Google, Inc., 2012) The

company estimates that they use over 33% renewable energy and they continue to

invest in renewable energies to get them closer to carbon neutral. Many of the

companies Green efforts were born out of the companys employees, called

Googlers, that devote 20% of their workweek to a project that they are passionate

about. With this type of atmosphere it is easy to see why innovation has ruled the

Google Mountain View campus.


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Clark, D. (2013, January 4). Why You Should Be On Google Plus (Even Though No OneElse Is). Retrieved May 27, 2013, from Forbes:http://www.forbes.com/sites/dorieclark/2013/01/04/why-you-should-be-on-google-plus-even-though-no-one-else-is/

Decker, S., & Womack, B. (2013, April 29). Motorola Buy Delivers Google MoreHeartbreak Than Help. Retrieved May 27, 2013, from The Verge:

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