internet search and the rise of google

8/3/2019 Internet Search and the Rise of Google

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Internet search and the

Rise of Google

AbhineetTarunAbdullahEkta


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Typ e Public

Industr y Internet, Com p uter Software

Founded Menlo Park, California, U.S.,(Se p . 4 1998)

Founders Larr y Page and Serge y Brin

Headquarter California, U.S.

Emp loyees 31,353 (2011)

Website www.google .com

Ov er v iew of Company:


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Include the new p roducts

Charge from the customers

Change the interest of users


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S earch Engine contain three types of component

Q uer y p rocedureIndexWeb crawler

In 2005 Google had $949 million in information technolog y assets and 2,00,000 com p uters for running the search engine andsp ent around $400 million on maintaining its s ystems.


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2. Veronica in 1993

3. Alta Vista in 1995

1. Archie in 1990

Search Engine before Google


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A BUSIN ESS MOD EL EMERGES

Bill Gross created IdeaLab,a businessincubator that subsequentl y generated anumber of Internet start-u p s, includingGoTo.com


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Two S trategies

Pay-p er click modelPriced ke ywords low


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Approaches

Pay the owners of high-traffic websites top lace banner ads.

To syndicate its services.


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In 2001, Go To.com changed its name toOverture Services.

In 2002 , AOL switch their allegiance to Google.In 2003,a deal was announced, with Overturebeing sold to Yahoo .


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Growth S tory

0

5000

10000

15000

20000

25000

30000

35000

40000

2004 2005 2006 2007 2008


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Google competitors

YahooMicrosoft s MSN


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S earch Engine Research and D ev elopment

S pending by Company($millions)

0

500

1000

1500

2000

2500

2004(MSN) 2005( yahoo) 2006(google)


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Vision and Value

To organize the world s information and makeit universall y acce p table and useful.

The value is ca p tured b y the p hrase don t beevil .Core value at Google is f ocus on the user ,and else will f ollow.


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Organization

Google had a flat organization.Comp an y s a pp roach toward p roduct

develo p ment.Hiring strateg y of Google.


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The Search Econom y in2006

Traditional media advertising is indiscriminate.

The Growth Stor y

Rap id growth of search based is pay- f or-click.Total global advertising s p ending on the wwwwas p redicted to total $26.7 billion in 2006.


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WWW Internet Ad Sp ending($billion)

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

in 2004 in 2005 in 2006 in 2007 in 2008


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Shares of All US Searches, June 2006(in %)

Google

Yahoo

MSN

TW

Ask

Other


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GOOGLE RISING


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It started as a research project(BackRub) byLarry Page while pursuing Ph.D in computer science at Stanford in 1996.Project was to identify the link structure of the

webpage.To identify, rank the value of a webpage.For ranking, web crawler needed to index

pages and archive links.


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Sergey Brin, another PhD student,mathematician develop an algorithm to rank WebPages.They used back link methodology to rank thewebpage i.e. bigger the rank web got, better the results.Released the search engine on Stanfordwebsite in August 1996.

Named Google as their new search engine.


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For Licensing, they contacted executives who passed licensed to Yahoo also.By late 1998, served 10,000 queries a day.As a result, computing resources shortageoccurred.To scale up Google and start a company, theyneed capital.Andy Bechtolsheim,co-founder of Sun-

Microsystem come for rescue.


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Google formally incorporated on September

7,1998.Traffic grown by 50% a month, attractedinvestors(including Amazon Founder, Jeff Bezos).To run search engine efficiently, they custom-designed a low cost,Liniux based server architecture.By late 2005,company using 250,000 Linux

servers to handle 3,000 searches a second.


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For Finance growth, they started to look for

venture capital funding.By June 1999, raised $25 million from twofirms(Sequoin Capital, kjeiner Parkins & Byers).Google grown to forty employees and serving 3.5million searches a day.Company still suffering a loss of $500,000 amonth, still not having a business model.

Licensing deals with companies not bringingenough money.


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Company started selling text based ads to

clients, who are interested in keywords.Ad appear on the page returning search results,not in the list of relevant sites.

Cost of an ad was to determine by how many people viewed it not by clicking it. It failed towork.

Started placing banner ads on Google websiteto generate revenue.Decision collapsed due to downfall in dot-com

boom,NASDAQ crashed and onlineadvertisin dro ed.


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GOOGLE BUSINESS MODEL


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Google looked out a search company making

good money i.e. GoTo.com.GoTo.com uses pay-per-click model andauctioning off keywords.Google didnt go with fact that GoTo.com includewebsites in its web crawls, if they are updated andready to pay more.Google with the ideology that serve the best

possible search results to customers withoutcommercial considerations.


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Google applied the approach - innovations of GoTo.com and Google superior relevance-

based search engine.Google wanted to alienate the rapidly growinguser base.To alienate, decided to place text based ads onthe right side of page, separated from searchresults from thin line.

Google allowed users to rank ads.


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Google used a Pickery second price

methodology to auction off keywords.In mid-2000,the service dealing with 18million search queries a day and index

surpassed 1 billion documents.By far the largest search engine on the web.By late 2000, Google introduced service,

AdWords,serving up 60 million search queriesa day.In Feb. 2002,google introduced new version of AdWords.


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It contains full set of pay-per-click advertising,

keyword auctions, and advertising links ranked by relevance.In 2003, Google introduced, AdSense.

It allows third-party publishers large and smallto access Googles massive network of advertisers on a self-service basis.

It also a pay-per-click service.In AdSense, Google splits the revenue with

publishers. It accounts for 15% of Googlerevenues in 2005.


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Reason behind launching the IP O :

1. Gaining access to ca p ital2. Providing liquidit y for large number of em p loyee

who had the equit y share

Initial P ublic offer ( IP O )


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Rev enue$147 billion

in 2003

P rofit$106 million

In 2003

Company issued the two type of share

1. Class A 2. Class B


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internet search and the rise of google

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