mi021 / cs021 computers in management oct. 16, 2006 search & advertising: google case
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MI021 / CS021Computers in Management
Oct. 16, 2006 Search & Advertising:
Google Case
www.gallaugher.com
Topics Covered
• Online Advertising Spending/Growth
• Google– Firm background– Revenue streams– Weaknesses/challenges w/model– Areas for development
• Competitors– Yahoo, Microosft, & others– Exploitable resources
Google Growth
$440M
$1,466M
$3,189M
$6,139M
$0.45 $0.41
$1.46
$5.02
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2002 2003 2004 2005$0
$1
$2
$3
$4
$5
$6
RevenueEPS (diluted)
Revenue ($ Millions)
EPS(diluted)
The U.S. Ad Market
$283B
Direct Mail$57.2B
Newspapers$49.6B
Broadcast TV$46.7B
Radio$21.0B
Cable TV$16.7B
YP$14.5B
Mags$13.0B
Internet$11.3B
Other$53.0B
AdSense
• Coverage for advertisers beyond search targeting
– AdSense network covers nearly every topic imaginable
– Matches highly targeted advertising with niche content
• Broad reach for branding advertisers
– Site Targeting allows advertisers to reach their target audience
– Aggregates the long tail
The Power of the “Tail” 3.9 Million Daily Page Views on Hip Hop Related Sites
Top 10 Highest Paying Keywords
$54.33 mesothelioma lawyers$47.79 what is mesothelioma$47.72 peritoneal mesothelioma$47.25 consolidate loans$47.16 refinancing mortgage$45.55 tax attorney$41.22 mesothelioma$38.86 car accident lawyer$38.68 ameriquest mortgage$38.03 mortgage refinance
Source: San Jose Mercury News, March 2006
Despite Click Fraud, Advertisers are Spending More
Source: TNS-MI; 2005 and 2003 US online display advertising, excludes companies with online spend less than $400K in 2003
Google - A Global Product= Engineering and PM offices
• Mountain View, CA• Kirkland, WA• Phoenix, AZ• Pittsburgh, PA• New York, NY• Santa Monica, CA
• Bangalore, India• Beijing, China• Belo Horizonte, Brazil• Hyderabad, India• London, U.K.• Munich, Germany• Tokyo, Japan• Trondheim, Norway• Waterloo, Canada• Zurich, Switzerland