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“We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.” [GOOGLE ANNUAL REPORT] “There is no thrill anymore.” [DIRECTOR, OPERATIONS] "We've been hiring on the order of 100 people a week.” [ERIC SCHMIDT] “For all Google's success, it still has just one fool proof meaningful way of making money: its powerful search-advertising system.” 'We took huge risks when we had no cash. Now we have all of this cash and we take few risks.'[ERIC SCHMIDT]

For all Google's success, it still has just one fool proof meaningful way of making money: its powerful search-advertising system. It's a gusher, but it's the only one. All the other projects it has in the works are just that, projects, which do not earn a lot. As Marc Benioff, the CEO of puts it, “What they need to do is build a full portfolio of revenue, as Microsoft has,”, “They have a fantastic cash cow. They need a goat and a chicken."

Google, the perfect search engine according to Google co-founder Larry Page, is a public and profitable company focused on search services. It is named after a mathematical term called “googol”, which means 1 followed by 100 zeros. The term was first coined by Milton Sirotta and later popularized in a book called “mathematics and the Imagination” by Kasner and James Newman. Google’s main focus by this term is to organize the immense amount of information available on the web. “It would understand exactly what one means and give back exactly what one wants,” according to Larry Page. Google’s goal is to provide a much higher level of service to all those who seek information, irrespective of time, place and the state of the user. Google operates web sites at many international domains, and the most trafficked one among all is The reason behind the claim of being the best search source is very obvious, and it is because Google is fast, accurate, and easy to use but primarily
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because it indexes over a trillion pages. Google’s breakthrough technology and innovations serve the company’s mission statement, i.e., “organizing the world’s information and making it universally accessible and useful.” As a first step to fulfill the mission, Google’s founders Larry Page and Sergey Brin, developed a new approach to online search that ignited in a Stanford University dorm room and very quickly spread across the globe. Their main focus was also to show only the relevant results to the user and that too without taking much time. When a person visits that person will be able to find information in many different languages; check stock quotes, maps, and news headlines; look up phonebook listings for every city in the US; search billions of images and peruse the world’s largest archive of Usenet messages. They have developed their search engine in such a way that a user even need not to make a special trip to the Google homepage. The innovative Google Toolbar did the magic by enabling the user to conduct a Google search from anywhere on the web. And now it is also possible to get the benefit of this facility without using a PC and just by using the latest technological mobiles. For sorting out the results they basically use two types of technology. The first one is Page Rank Technology, and the other one is Hypertext Matching Analysis. Google’s utility and ease to use have made the brand GOOGLE one of the world’s best known brands and that too almost entirely through word of mouth from satisfied users. As a business, Google generates revenue by providing space to the advertisers on the web. In other words, they give advertisers an opportunity to deliver measurable, cost-effective online advertising that is relevant to the information displayed on any given page. Actually, this makes the advertising fruitful for the party, the user and the advertiser as well. Today thousands of advertisers use Google AD Words program to promote their products and services on the web with the targeted advertising. And now it is the largest program of its kind. The relevance factor is so important that many website managers take advantage of Google Ad Sense program to deliver ads relevant to the content on ta particular site. And by this way they are able to generate their revenues also and users are also getting interesting experience. Google has also persistently pursued innovation and pushed the limits of existing technology to provide a fast, accurate, and easy to use search service that can be accessed from anywhere.

Google is the baby of Larry Page and Sergey Brin and it all started off as a college project when they met at Standford University in 1995. Larry Page, is the son of the late Dr. Carl Victor Page, a professor of computer science, holds a Bachelor of Science degree in computer engineering from the University of Michigan with honors and a Masters degree in
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Computer Science from Stanford University. While at the University of Michigan, "Page created an inkjet printer, made of Lego bricks". Sergey Mikhailovich Brin was born in Moscow, in the Soviet Union to a Jewish family, the son of Michael Brin and Evgenia Brin, both mathematicians who graduated from the Moscow State University. Brin began his graduate study in Computer Science at Stanford University on a graduate fellowship from the National Science Foundation. He earned his master's degree in August 1995 ahead of schedule in the process of his Ph.D. studies. According to Google lore, company founders Larry Page and Sergey Brin were not fond of each other when they first met as Stanford University graduate students in computer science in 1995, but there were few common things they found between them and that thing was the freedom to experiment and do something which has never been done before and this comes from Page's brilliant approach to searching the World Wide Web, a strategy he developed while a graduate student in computer science at Stanford University. The son of a college professor, Page equated links between Web pages to citations in academic papers, which are considered more valuable if cited by other academic papers. Translating that concept to the Web meant looking at which pages linked to which, and counting and ranking Web links called for the talents of Brin, a math prodigy and another Stanford grad student. January of 1996, Larry and Sergey had begun collaboration on a search engine called BackRub, named for its unique ability to analyze the "back links" pointing to a given website. A year later, their unique approach to link analysis was earning BackRub a growing reputation among those who had seen it. Buzz about the new search technology began to build as word spread around campus. Among those they called on was friend and Yahoo! founder David Filo. Filo agreed that their technology was solid, but encouraged Larry and Sergey to grow the service themselves by starting a search engine company. Unable to interest the major portal players of the day, Larry and Sergey decided to make a go of it on their own. All they needed was a little cash to move out of the dorm — and to pay off the credit cards they had maxed out buying a terabyte of memory. So they wrote up a business plan, put their Ph.D. plans on hold, and went looking for an angel investor. Andy Bechtolsheim, one of the founders of Sun Microsystems, was used to taking the long view. One look at their demo and he knew Google had potential — a lot of potential. But though his interest had been piqued, he was pressed for time. As Sergey tells it, "We met him very early one morning on the porch of a Stanford faculty member's home in Palo Alto. We gave him a quick demo. He had to run off somewhere, so he said, 'Instead of us discussing all the details, why don't I just write you a check?' It was made out to Google Inc. and was for $100,000."The investment created a small dilemma, since there was no legal entity known as "Google Inc.," there was no way to deposit the check. It sat in Larry's desk drawer for a couple of weeks while he and Sergey scrambled to set up a corporation and

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locate other funders among family, friends, and acquaintances. Ultimately they brought in a total initial investment of almost $1 million. In 1998, they finally started the Google Inc. in a formal way, by opening its door in Menlo Park, California the garage and by February 1999 had moved to an office on University Avenue in Palo Alto. In 1998, it had already started answering 10,000 search queries every day which by February,1999 increased to more than 500,000 queries per day. They had started growing in a substantial form and so they hired many employees also but they could not be able to accommodate all of them properly due to space constraints. At one point the office became so cramped that employees couldn't stand up at their desks without others tucking their chairs in first. They focused on innovative services first rather than infrastructural constraints. By, September 21, 1999 answering level reached to more than 3 million searches per day. What started off as a college research project was now a real company offering a service that was in great demand, so on September 21, 1999, the beta label came off The informal atmosphere bred both collegiality and an accelerated exchange of ideas. Google staffers made many incremental improvements to the search engine itself and added such enhancements as the Google Directory (based on Netscape's Open Directory Project) and the ability to search via wireless devices. Google also began thinking globally, with the introduction of their first 10 language versions for users who preferred to search in their native tongues. By June, 2000 Google officially became the world's largest search engine with its introduction of a billion-page index — the first time so much of the web's content had been made available in a searchable format. With the launch of a keyword-targeted advertising program, Google added another revenue stream that began moving the company into the black. By mid-2000, these efforts were beginning to show real results. On June 26, Google and Yahoo! announced a partnership that solidified the company's reputation — not just as a provider of great technology, but as a substantial business answering 18 million user queries every day. To extend the power of its keyword-targeted advertising to smaller businesses, Google introduced AdWords, a self-service ad program that could be activated online with a credit card in a matter of minutes. And in late 2000, to enhance users' power to search from anywhere on the web, Google introduced the Google Toolbar. This innovative browser plug-in made it possible to use Google search without visiting the Google homepage, either using the toolbar's search box or right-clicking on text within a web page, as well as enabling the highlighting of keywords in search results. The Google Toolbar would prove enormously popular and has since been downloaded by millions of users. And as 2000 ended, Google was already handling more than 100 million search queries a day. They reached out first to a population with a never-ending need for knowledge — students, educators, and researchers, paying homage to Google's academic roots by offering free search services to schools, universities, and other educational
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institutions worldwide. Realizing that people aren't always at their desks when questions pop into their heads, Google set out to put wireless search into as many hands as possible. The first half of 2001 saw a series of partnerships and innovations that would bring Google search to a worldwide audience of mobile users. Wireless Internet users in Asia, Japanese users of i-mode mobile phones, Sprint PCS, Cingular, and AT&T Wireless customers, and other wireless device users throughout the world gained unparalleled access to the 1.6 billion web documents in Google's growing index. In 2001, they came up with a kind of innovation in which users could now limit searches to sites written in Arabic, Turkish, or any of 26 other languages. In December 2001, Google Image Search, first launched during the summer with 250 million images, came out of beta with advanced search added and an expanded image index. Online shopping also took a leap forward with the beta launch of Google Catalog Search, which made it possible for Google users to search and browse more than 1,100 mail order catalogs that previously had been available only in print. And December 2001, also brought another milestone as the Google search index reached 3 billion searchable web documents. The love affair between Google and the technology community — engineers, programmers, webmasters, and early adopters of all shapes and sizes went back to the days when word-of-mouth from tech-savvy users spread the budding search engine's reputation far beyond the Stanford campus. That ongoing romance was evident at the 2001 Search Engine Watch Awards, announced in February of 2002, where the webmaster community awarded Google top honors for Outstanding Search Service, Best Image Search Engine, Best Design, Most Webmaster Friendly Search Engine, and Best Search Feature, by that time there are also some other softwares which had been added to the list like; the Google Programming Contest coupled a daunting challenge with a tempting prize: $10,000, a visit to the Googleplex, and a chance for the winner to spend some quality time with the Google code base, then the Google's web application programming interfaces (APIs) enabled software programs to query Google directly, drawing on the data in billions of web documents, after that the Google Computer, newly added to the Google Toolbar, took advantage of idle cycles on users' computers to help solve computation-intensive scientific problems. In February of 2002, AdWords, self-service advertising system, received a major overhaul, including a cost-per-click (CPC) pricing model that makes search advertising as costeffective for small businesses as for large ones. The approach to advertising has always followed the same principle that works so well for search: Focus on the user and all else will follow. For ads, this means using keywords to target ad delivery and ranking ads for relevance to the user's query. As a result, ads only reach the people who actually want to see them - an approach that benefits users as well as advertisers. Same year the launch of Google Labs enabled their engineers to present their pet ideas proudly to an adventurous audience. Google News launched in beta in September of 2002, offering access to 4,500
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leading news sources from around the world. Froogle, a product search service launched in test mode in December of 2002, continued Google's emphasis on innovation and objective results. Google's innovations continued to reshape in the next year also, as not only the world of search, but also the advertising marketplace and the realm of publishing. In 2003, Google acquired Pyra Labs and became the home for Blogger, a leading provider of services for those inclined to share their thoughts with the world through online journals (weblogs). Not long thereafter, the Google AdSense program was born, offering web sites of all sizes a way to easily generate revenue through placement of highly targeted ads adjacent to their content. Brand channel again named Google as "Brand of the Year" for 2003. Other new services that emerged early in 2004 included Local Search and after that personalized search came on Google Labs, enabling users to specify their interests and adjust the level of customization in their search results. On April 1, Google posted plans to open a research facility on the Moon and announced a new web-based mail service called Gmail, which at launch included a gigabyte of free storage for each user. It soon became apparent that Gmail was no joke. Using Ad Sense technology, Gmail was designed to deliver relevant ads adjacent to mail messages, giving recipients a way to act on this information. And on April 29, the brand Google filed with the SEC for an initial public offering (IPO). In the same year, they have acquired Picasa Inc. After that Google SMS became a new beta offering which enabled people who are away from their computers to quickly and easily get instant, accurate answers to queries. The Google Search Appliance spawned a new blue Google Mini, a smaller and lower-cost solution for small and medium-sized businesses that want Google quality search for their documents and sites. The Mini is the first (and so far only) Google hardware product to be sold only through the Google Store alongside a variety of consumer goods that often feature the four-color logo. Google Video also launched – a new project that captures the closed-caption information on TV programming and makes it searchable. And fourth quarter of 2005 earnings reported record revenues of $1.032 billion for the quarter ending December 31, 2004 – up 101% year over year. Meanwhile, Google's Image Search grew to contain more than 1 billion images of all types – photos, drawings, paintings, sketches, cartoons, posters, and more. And in May 2005, Google launched Google Desktop Search for the Enterprise – a way to enable Google-quality search across a corporate or organization's network with the security, information and deployment controls an IT administrator needs. Also in 2005, it seemed all the world took notice of blogs and feeds – two important ways to publish quickly and easily, and to subscribe to many timely publication sites. Later, in 2006, they started many fresh services and also upgraded some earlier ones. Like they rolled out Google Video Player, Google Finance, and upgraded g-talk. After much serious consideration, Google announced the beginning of a localized Google domain in China. This news prompted a good deal of discussion among our friends and critics. It
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wasn’t an easy decision, but we remain dedicated to doing all we can to enable the best possible access to information. To improve the search experience they added additional tools to continue improving your search experience: Co-op, Desktop, Trends, and Notebook. On the advertising front, AdWords further expanded its access to local businesses. They announced click-to-play Video Ads, followed soon after by a partnership with MTV. During 2006, Google Book Search partnered with several more major libraries: the University of California, University of Wisconsin, and University of Virginia, and also our first non-English partnership, with Universidad Complutense de Madrid, to digitize and make searchable millions of pages of books and holdings across these libraries, which of course feature much that is rich with historical and literary value. To innovate properly and make the most Google had established partnerships with many big names such as; eBay, Adobe, Intuit, Dell, Sony, Palm, Sprint, and Airtel. A partnership with China Mobile, the world’s largest mobile telecommunications carrier, to provide their users with Google mobile search, as well as a collaboration with Samsung that puts Google products and services on selected Samsung phones. They also acquired You Tube in 2006 to put more impact and enable users to search videos. Google has started thinking about ecological imbalance and also started putting effort to stop that by joining hands with others major bodies. They undertook a large solar panel installation at their Mountain View campus. This direct installation of clean and renewable power was the first step in reducing the environmental impact as a company. The solar energy will be used to power several of Mountain View facilities, and by the spring of 2007, it should offset roughly 30% of the local peak electricity consumption – the amount of electricity generated equivalent to powering approximately 1,000 average California homes. Google announced the Climate Savers Computing Initiative, a joint effort with more than 30 organizations to save energy and reduce greenhouse gas emissions by using more energy-efficient computers and computer equipment.

Putting Google in any single strategy would be foolhardy, if even pursued. But if we have to choose one, we could say that, they have had a close resemblance of the BLUE OCEAN STRATEGY, where the competition now is almost nullified and it hardly matters who is coming up with what; e.g. a former Google employee came up with a search engine called ‘Cuill’, claiming that it provided faster, more and accurate results than Google, it garnered a lot of publicity, so much so that their servers crashed!! Now it remains just that, a company that challenged Google. Internet marketers (and search marketers in particular) ought to be thinking about where Google wants to take the industry, because even if Google ultimately can't go where it
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wants, the industry will be changed regardless. Watching Google helps us understand not only where Google is going, but where others might go also. So, what is behind all the actions we've seen Google take over the years? Some of the motivations are simple. Google's revenue is based on advertising, so it needs more and more places to show its ads to increase its revenue. So, expanding its reach through its AdSense contextual ad network makes sense. So does its acquisition of DoubleClick. Both of these moves allow Google to place ads on Web properties it does not own. Similarly, Google has been consistently acquiring properties that serve as venues for its ads, such as Blogger and YouTube. Google has also pioneered new offerings that attract audiences for its ads, such as Gmail. But Google's strategy is far richer than merely adding new venues for the same kind of ads it shows on search results pages. Google knows that the reason that its ads have commanded premium prices (versus banner ads) is because Google ads have the customer's attention. When someone is searching for something, they are interested in the ads, while Web surfers might not be. Google understands that the attention paid to a message is a critical part of why it has high value to an advertiser. So value addition is another of Google’s initiative. So, attention is more than real estate. Showing a display ad does not ensure true customer attention. True attention is a function of relevance. Google already commands attention with its search ads, and seeks to create similar relevance with other forms of advertising. The act of searching itself is based on relevance, but Google's contribution to advertising relevance is the hybrid paid search ranking scheme—they were the first to rank search ads based on the combination of bid price and Clickthrough rate. By adding Clickthrough rate to the previous high-bidder approach, Google not only maximized its income, but also increased the relevance of those paid search ads. It's reasonable to think that the gradual increase in clicks on paid search ads is partially caused by the fact that they are more relevant than they once were, and searchers have learned trust them more. But that's not Google's strategy, it's Google's history. Google has a history of selling advertising that is the most relevant—its relevancy is driven by the attention people pay to it. Google's strategy is to broaden this kind of relevancy beyond search. Google wants plain old banner ads to command the same level of attention that paid search ads do. And the key to that kind of relevance is personalization. That's Google's strategy.
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The Google toolbar can report search terms and Web sites visited. Geo-targeting identifies where they are. Google Analytics reports all activity on a Web site. Google Checkout knows what gets bought. Google Website Optimizer knows which variations of your marketing message work best. Gmail knows what your customers say, even in private. Google might even bid on mobile phone spectrum, which might allow it to know people's whereabouts and even more of their behavior. And it's all tied together with your Google Account. But that's not all. Behavioral targeting and retargeting brings personalization to banner ads. And Google is well-positioned to mine personal information, given how well it has executed its strategy. It's hard to remember how, just a few years ago; Google seemed less capable than Yahoo! and Microsoft to bring about personalization. Those companies had portals that promised to detect far more information than Google's simple search interface. It's remarkable how much ground Google has covered since, so that today it appears to know more about searchers and surfers than anyone. According to some critics, Google doesn’t have any strategy per se. According to them, Google is just organizing the world’s information. They've bought Blogger, they just now came out with Jotspot, they have Youtube, Google Map reviews, and the list goes on. They own publishing platforms/content, as well as "organizing the world's information”. According to them, Google has no plan to. They allow their developers to focus on little projects, and if they have potential to grow, they grow those platforms. They buy out platforms that have synergy, or allow them to get into new markets. The difference between Google and Yahoo is that Google always integrates the services overtly into their main "theme" somehow, Yahoo has not done that well. Flickr, Mybloglog, Yahoo music, upcoming search marketing etc. The consumer services might have a universal login, but there is no integration from platform to platform, internally connecting the different information, and allowing you to build things off of it. Google bought bits and pieces of office/productivity software and integrated it. They took their calendar, and integrated it with Gmail. They are constantly looking for synergies, Yahoo is not. The real issue is integration. Technology is working towards integrating everything in your life; from your computer, to your multiple online profiles, to your keyword searches, to your location, house, gaming platform and more. AOL, Microsoft and Yahoo all lost major market share to Google because Google powered all of their searches in the beginning. They all now have to cover lost ground, and none of them are doing a great job at it.

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The most likely problem Google will have to face down is a backlash based on privacy concerns. As the public becomes savvier about privacy with each passing year, providing free software might not be enough to persuade people to part with their privacy. Even the work underway is slow because searchers don't understand the benefits of personalized search. Google is well aware of this danger, so it remains to be seen if they can evade it. Google's strategy is far more diffuse and nuanced than this. But it helps us to try to simplify things to their essence, even at the risk of oversimplifying, because it helps us understand the forces at work in Internet marketing. Understand that what Google wants to do might not happen, but it is certain to affect what others do and what eventually does happen in Internet marketing. If you pay attention to these broad themes as you do think through your marketing strategy, you'll be more prepared for whatever does come along.

Google went from being a small startup in 1998 to a behemoth by 2004, their revenues soared1 to $16593 Thousand , the count of employees grew to 16805 by March 2008 . They spread their operations to 68 campuses, spread over 31 countries. The employees were given special benefits like stock options to 99% of employees, 20% of their time to be used to their pet projects. So much so that Google was constantly rated as being the best company to work for by multiple surveys. The picture looked perfect, just too good to be true. But as companies find out, when an engine runs too fast it also loses its energy at a greater rate. Suddenly employees started quitting and these were not fresher’s but people who had worked over many years to start up their own venture or join others. The number has increased so much that they have created a community called “Xooglers”. To state the exodus of some of the best Google mind’s as sporadic events would be easy if these were few and far between. It isn't. Paul Buchheit, an early Google engineer who coined the "Don't be evil!" battle cry, is a founder, with three ex-Google colleagues, of a social-networking company called FriendFeed. Yanda Erlich, once a popular Google product manager, started an instant-messaging company called Mogad. Nathan Stoll, who managed Google News, is working on his new company, Mechanical Zoo. David Friedberg, another former business development executive, who started a company called WeatherBill, which sells insurance pegged to climate risks, recently attended the Xooglers

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club's first meeting at a conference center in Palo Alto. "I was surprised by the number of things that were being done that could have been done at Google," he says. People like, Anna Patterson (Chief architect of the TeraGoogle search index), Paul Buchheit and Sanjeev Singh (created the first version of Gmail), Gokul Rajaram (Product management director, AdSense), Benjamin Ling (Launched Google Checkout), Bret Taylor & Jim Norris(Developed Google Maps) and many others who were among the top dogs at Google have left and are constantly on the lookout for present Google employees. Anna Patterson started Cuill (now Cuil, pronounced as ‘cool’). Google has also got desperate with employees leaving e.g. , the company offered a ‘blank check’ to Sean Knapp when he offered to leave, as he had found a better way to handle web videos and hence wanted to start his own venture. Some of the executive talent has left as well. Its chief information officer, Douglas Merrill has left. Several top people have gone to Facebook, most notably, Sheryl Sandberg, who ran Google's automated ad sales, and Elliot Schrage, who ran PR. George Reyes, Google's CFO, announced his retirement last summer and has yet to be replaced. A senior director said, “There is no thrill anymore.” Hence Employee Satisfaction, which was once said to be the hallmark of Google Inc., is under major threat, with employees constantly looking out for other opportunities. The Big question is “Why?” Attrition is nothing new in the Silicon Valley, most of the companies regularly complain about it all the time, but for Google this was almost a bolt from the blue, a company which felt proud of its 0% attrition for a few years and regularly hailed as the best place to work. Most of the people who left complained that due to the sheer size of the company (16,805 in March 2008) the identities were lost, employees lost out the initial speed of execution, when they could just turn their chairs and discuss. For his part, Google CEO Eric Schmidt who left Sun Microsystems for Novell and then Novell for Google - brushes off the effects of all those departures. "We've been hiring on the order of 100 people a week," he says. "So in one week we hire more people than the people you just named." Now, leaving executives and super star engineers aren't the only challenges Google faces these days. In fact it’s far from it. One might think that a company that nets $1 billion - plus a quarter and is so powerful it even scares Microsoft, is worried? The truth is Google's scorching growth2 is finally slowing, as the company's sheer size dictates it must. And size necessitates changes. Gone are the days when Google could take full advantage of its quirkiness. It's the market leader now, which presents a classic conundrum: Which is more important, process or innovation? For all Google's success, it still has just one fool proof meaningful way of making money: its powerful search-advertising system. It's a gusher,

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but it's the only one. All the other projects it has in the works are just that, projects3, which do not earn a lot. As Marc Benioff, the CEO of puts it, “What they need to do is build a full portfolio of revenue, as Microsoft has,”, “They have a fantastic cash cow. They need a goat and a chicken." More than diversification, though, Google has to prove that its quirks e.g. its odd hiring practices (e.g., asking 45-year-olds their GPAs), refusing to provide guidance to the Wall Street, the free food, etc. - will stand the test of time. It has to show that its success is because of its Googleyness (more Googlespeak), not despite it. Even its friends harbor doubts. "I'm not convinced they're in the ranks of GE or P&G or even Microsoft, for that matter," says Peter Chernin, president of News Corp., whose MySpace unit is a key Google partner. "Not yet." ‘The basic tenet of Google's way of doing business is that it is not like any other businesses.’ Founders Larry Page and Sergey Brin celebrated this quality in their famous letter to prospective shareholders before the company's 2004 IPO, and they promised to keep things that way. For example, Google's operations themselves are unconventional. One of the most fundamental precepts of modern management has to do with how to allocate resources: deciding which projects to pursue, where to spend money, when to take a pass.. Yet it's a concept that, while not exactly alien to Google's top dogs, isn't their highest priority. After all, why focus on allocating scarce resources when the resources aren't all that scarce? At the end of the first quarter Google had cash and other liquid assets of $12 billion; it generates almost $2 billion of cash per quarter. At Google, what you often end up with instead of resource allocation is a laissez-faire mess. Take, for example, the hassles Dave Girouard had to face. Girouard is VP, Google Apps, the company's fledgling initiative to sell Web-based software applications to businesses. He wanted some alterations to Gmail to make the e-mail product more appealing to his corporate customers. To do that, he needed to lobby Gmail engineers, who don't work for him. He likens his efforts to a Peace Corps mission: all heart but little power to enforce his will. Yet while Girouard is begging for engineers, others, like the Ooyala founders, get blank-check offers. Says one ardent, if critical, Google fan: "They can't do everything, but they still think they can." Some very high profile business deals don't always reflect a clear logic. When the company outbid Microsoft to supply search ads to News Corp.'s MySpace social network, for instance, Google was aware that the deal wouldn't make it a lot of money right away. Almost two years later Google still isn't making much, if any, money on MySpace.
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Google also has yet to see the kinds of financial returns it had hoped for from its prodigious acquisitions. In its first significant purchase Google paid $98 million in early 2006 for dMarc, a startup that manages ad spots for radio. It was to be the foundation for Google's move into selling forms of advertising other than plain text ads. But dMarc, now Google Audio Ads, hasn't amounted to much. Indeed, it's one of seven products, as Google dryly notes in its securities filings that have not produced any material revenue. Another of those products, surprisingly, is YouTube, which Google acquired in 2006 for $1.6 billion and which continues to experience torrid growth. According to comScore Video Matrix, YouTube's share of video on U.S. websites is now 34%, double what it was in February 2007. Yet Google has been relatively ineffective at selling ads on YouTube, collecting about $100 million in revenue in 2007, mostly from ads on YouTube's home page. Google says it's focused on growing share and improving the "user experience." Industry wags suspect that advertisers simply see little value in selling their wares next to dancing cats. Google does have some big bets that could become meaningful businesses. Google Apps, a Microsoft Office lookalike package, is a modest success, with expected 2008 bookings of "several hundred million dollars," according to Google. That's still tiny compared with Google's main search-ad business, and it's downright microscopic next to Microsoft's $19 billion Office franchise. Another initiative with serious potential is Google's Android project, which offers a standard and open operating system for cellphones, compared with the proprietary systems in use today. Important industry players such as TMobile and Samsung have signed up with Google to be partners on Android. Google's move into new kinds of advertising opens up another thorny issue: the economy. In mid-2007, Google's chief economist, former University of California professor Hal Varian, read that Schmidt had referred to Google as "recession-proof." He quickly corrected Schmidt, "I would say recession-resistant," says Varian. In fact, Varian ran an analysis of Google's business to determine the effect of the overall economy on its performance. His conclusions were contradictory. First, he found that Google has a "GDP beta" of one, meaning that because the company's ad base is diversified, its business should swing according to the overall economy. That would seem to be troubling. Yet Varian also determined that because Google is so successful at targeting its ads- advertisers who buy the phrase "digital camera" on Google are highly confident they'll attract digital camera shoppers - it will be less susceptible to economic trends. Furthermore, because Google caters to advertisers who buy in small increments, Varian thinks the company's offering appeals in price-sensitive times. His overall conclusion: "There is something of a contra-cyclical nature" to Google's business. What's more, the massive shift underway from traditional media to online will trump any effects Google might otherwise feel from a weak economy.

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As of this spring, the balance has swung in Google's favor. Fears that a slowdown in the growth of users clicking on Google's ads would lead to worsening performance have so far proved unfounded. When Google reported first-quarter earnings of $1.3 billion, significantly beating Wall Street's estimates, the stock jumped $90 per share in a day. A slowing economy simply hasn't affected Google's performance. "We've looked at this really carefully, and we do not see an impact as of this time," Schmidt told investors on April 17. "Should the economy change, we're well positioned to continue to do well because our model is so targeted. And targeted advertising does well in pretty much most scenarios." So far the facts bear Schmidt out. But there's that bothersome conclusion of his economist, the one where Google's performance at some point mirrors the economy's. The question is, when? Google also lists its risks in its Annual Report like, it says the revenues growth rate to decline and downward pressure from operating margins. It also says, “We generate our revenue almost entirely from advertising, and the reduction in spending by or loss of advertisers could seriously harm our business.” They also have their concern over new technology blocking their ads. They go on to say , “If we fail to detect click fraud or other invalid clicks, we could face additional litigation as well as lose the confidence of our advertisers, which would cause our business to suffer.” But the biggest concern that everyone agrees and Google acknowledges in its annual report is when they say,” If we were to lose the services of Eric, Larry, Sergey or other members of our senior management team, we may not be able to execute our business strategy.” And then they add this, “We rely on highly skilled personnel and, if we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow effectively.” So we see that our assumption of Employee Retention as the biggest issue, is true to a large extent. Also remember just how profitable Google is - and what a cushion that provides. Net margins of 25% place Google between Microsoft's monopoly margins of 28% and Cisco's best-in-class hardware profits of 21%. Should Google ever decide to cut costs, it will have ample opportunities. As an example, the company spends at least $14 per employee per day on all that free food. At 19,000 employees(estimates end 2008), that works out to $67 million a year, or about 20 cents per share that would drop to the bottom line if Google were to have the temerity to ask its workers - shudder - to pay for their own meals. Twenty cents is a trifle; analysts expect 2008 earnings of nearly $20 per share. But in a pinch? Nobrainer. Then there's the possibility that Google truly is inventing an entirely new way of doing business. "People are labeling them as just about search," says Bruce Jaffe, a former M&A
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executive at Microsoft who came to admire Google the hard way- by competing against it. "But I'm not sure that's accurate. They've introduced a new model for software. Think of it this way. If they are a household brand on products like Google Maps and Gmail, that may be more than just search." In other words, getting customers to use Google all the time would make it ubiquitous on the web, as Windows is on PCs. "It may be that they're in a whole other world from everyone else," says Jaffe. "They could be such pioneers that no one will know for years." Even if Google does not redefine business as we know it, the company will change. Companies inevitably do as they grow and age. They lose their coolness, they bureaucratize. But it is expected that Google will keep doing things its way for as long as possible. After all, its founders still control 58% of the company's voting shares and have vowed to invest for the long haul rather than heed criticism about short-term performance. In that regard, it's interesting to get a sense of the way Google sees itself. When Schmidt is asked how he as CEO balances the need for process with the less quantifiable demands of experimentation and innovation, he responds by relating the thoughts of Page and Brin. "Let me give you the argument that Larry and Sergey have made, which is, I think, surprising," Schmidt says. "They are concerned that the company is becoming too conservative”. They say to me, 'We took huge risks when we had no cash. Now we have all of this cash and we take few risks.' Think about that. Google recently made headlines by bidding almost $5 billion in a government auction of wireless spectrum, even though the company had no plan for using it. Some of its more peculiar products include Google Sky, Google Mars, and Google Ride Finder. It has become a significant investor in alternative-energy projects. Yes, alternative energy. And its founders fret that its risk-taking days are over? Then again, Google's biggest risk may be recreating the magic it enjoyed as a startup- that intangible quality that makes Silicon Valley tick. Paul Buchheit, the former Google engineer who is on to his second startup now, recalls what he loved about Google's early days. "I was always so excited at Google, because I didn't know what would happen next," he says. "Then I knew what would happen next." Predictability is a virtue in the world of big business. It's just not particularly Google

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We all know that the company Sergey Brin and Larry Page founded a mere eight years ago is one of the new century's most cunning enterprises. After having tremendous growth, Google is sitting right there on the top and its competitors have been trying hard to follow on its footsteps. But the biggest question to be asked is whether it is possible for Google to sustain such a growth? That's a huge bet on future growth that seems unthinkable during the post-bubble period. But in Google's case, the exuberance is rational. That's because Brin, Page, and CEO Eric Schmidt cornered online advertising: They've made it precision-targeted and dirt cheap. U.S. companies still devote more ad dollars to the Yellow Pages than to the Internet (which accounts for less than 5 percent of overall ad spending). Yet Americans now spend more than 30 percent of their media-consuming time surfing the Web. When the ad dollars catch up to the trend, a mountain of cash awaits, and Google is positioned like no one else to scoop it up. Even if Google has to share that payday with rivals like Microsoft and Yahoo, the company has an edge, with storage space and sheer processing power – an estimated 150,000 servers and counting – that will enable it to do just about anything it wants with the Web. Google's chief executive, Eric Schmidt, has acknowledged that providing applications and other services to business customers will be an important strategy for maintaining growth of the company. Speaking at a press event in Paris on Tuesday, Schmidt responded to a question on how Google intends to maintain its phenomenal growth rates when the stream of ad revenues from old media to new media, which has sustained the company so far, begins to plateau. "Small businesses and universities are likely to become a significant business for Google as [they] use our leverage in terms of sales and infrastructure," he said. Google owes its present position to building mass-market applications — search, most notably — but, in the last two years, it has begun to focus on more business-targeted applications and devices, such as the Google Search Appliance, Google Mini and, more recently, Google Apps Premier Edition. Today Google is a pure money machine. The company has done a phenomenal job maximizing ad revenues. They also know they need to think, plan and executive for the long term. To remain a viable long-term powerhouse, Google will need more than just landline PC Internet search advertising. This brings us to their long-term focus: Mobile

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Google has made no secret of its ambitions in the mobile space. There are mobile versions of all its key services, such as search, e-mail, instant messaging and calendar. But the company is going much further. At the end of 2007 it lifted the lid on Android, an open mobile operating system that is being used to power a new generation of devices under the Open Handset Alliance, a group which involves firms like HTC and chip designer ARM. Google's $3.1 billion acquisition of DoubleClick is its biggest call for the future. DoubleClick is a specialist in online display advertising. Display ads are like what one finds on TV or in magazines: They're focused on image and message rather than on transactions, which is the allure of text ads. Online display ads have grown more slowly than search ads, but they are a huge untapped territory. In the traditional ad world, brand advertising is far bigger than direct marketing. Same deal online. When people are on the web, most of the time they're not searching- they're reading, watching video, playing poker, whatever. There's big bucks in getting ads in front of people while they're engaged in all their nonsearch activities. Google hasn't excelled at such ads; DoubleClick has.

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Google was a media darling on the way up. Microsoft and Yahoo have seen their share of departures and spawned their share of startups from the ranks of former employees. But the incredulity of the study is based on the formerly pervasive media view that Google could defy the laws of corporate physics. Google's incredible growth created expectations that it wasn't an ordinary company. But, generally speaking, it is and people are now coming to terms with that. For all its challenges, Google obviously remains a phenomenon. Its people may be wasting resources chasing disparate dreams, but the engineers dedicated to tweaking and improving the search algorithm and the ad system that cashes in on it are among the best in the world. Google's share of U.S. search queries just keeps rising: It's now around 59%, up from 46% in early 2005, according to Nielsen Online. "We are in one of our most productive phases," boasts Schmidt. The growth rate for the 2 quarters has already been an astonishing5 41.5% (average), when the market scenario has been dismal and most companies posting negative or very low returns. The plain and simple fact is that Google has achieved what none of its competitors have till now; it has garnered more revenue, higher profits, mindshare than either Microsoft or Yahoo and all this in an ethical manner. Its been loved and admired for its growth for its contribution to society and technology, at large. Google's challenge is to maintain employee excitement, and innovation is a very large organization6 that is inevitably more bureaucratic today than it was in 2004. It can be done, but it's much harder than running a startup.

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WHITE BACKGROUND signifies brands that are associated with SEARCH GREEN BACKGROUND signifies brands that are associated with COMMUNICATION and SHARING BLUE BACKGROUND signifies brands that are associated with EXPLORE AND INNOVATION YELLOWISH BACKGROUND signifies brands that are associated with COMPUTER MANAGEMENT

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REFERENCES : The Google Story by David A. Vise and Mark Malseed
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Full Year Revenue Revenues Y/Y Growth rate Q/Q Growth rate Google web sites Y/Y Growth rate Q/Q Growth rate Google network web sites Y/Y Growth rate Q/Q Growth rate Total advertising revenues Y/Y Growth rate Q/Q Growth rate Licensing & other revenues Y/Y Growth rate As % of revenues Google web sites Google network web sites Licensing & other revenue 2002 439,508 409% NA 306,978 359% NA 2003 1,465,934 234% NA 792,063 158% NA 2004 3,189,223 118% NA 1,589,032 101% NA 2005 6,138,560 92% NA 3,377,061 113% NA 2006 10,604,917 73% NA 6,332,797 88% NA 2007 16,593,986 56% NA 10,624,705 68% NA

2008 (unaudited) Q1 5,186,043 42% 7% 3,400,405 49% 9%

Q2 5,367,212 39% 3% 3,530,145 42% 4%

103,937 NA NA 410,915 514% NA 28,593 47% 70% 24% 6%

628,600 505% NA 1,420,663 246% NA 45,271 58% 54% 43% 3%

1,554,256 147% NA 3,143,288 121% NA 45,935 1% 50% 49% 1%

2,687,942 73% NA 6,065,003 93% NA 73,558 60% 55% 44% 1%

4,159,831 55% NA 10,492,628 73% NA 112,289 53% 60% 39% 1%

5,787,938 39% NA 16,412,643 56% NA 181,343 61% 64% 35% 1%

1,686,141 25% 3% 5,086,546 40% 7% 99,497 172% 66% 33% 1%

1,655,280 22% -2% 5,185,425 35% 2% 181,787 440% 66% 31% 3%

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