Wednesday, May 5, 2010

Google’s Googly

When you talk about Internet, first word that pops up is ‘Google’. With the acquisition of ‘Episodic’ on April 2, 2010 Google added one more star in its kitty. ‘Episodic’ is a comprehensive platform for broadcasting live and on-demand video to web or any other web-enabled devices. You can host, stream, measure and monetize video content. This acquisition once again raised many eye-brows as when Google acquired ‘You Tube’ in 2006. At that time ‘You Tube’ was hardly making any profit. The turnaround is now in front of you. Here I will try to analyse how Google manages to turn these risky acquisition into success at jet speed.

Started from a garage, Google now has become one of the leaders in Internet space. If you go by sheer size, Google has almost 50% of the pie. Internet is one of the most fragile spaces, so in the end size alone does not count for much.
With the passage of time Google is only increasing its presence and there is no stopping it. It has redefined the nature of the game. No longer are the largest companies in any industry necessarily the leaders in today’s competitive world.

Google’s success:
One thing is clear. They are obviously not just organizing the world’s information’, they also own publishing platform/content like Picasa, Android, You Tube, Adscape, DoubleClick, Feed Burner, Postini, etc. That is what brings to light Google’s true strategy. Crux lies in Google’s strategy. Innovation and out of box thinking are the reasons behind its success. It has a reputation for risky acquisition and partnership and playing by its own rule to create innovation and value for its customer. Google has an upper edge in synergizing its product by seizing an opportunity to bolster its current advertising business model. Google always take first step and probably creates the new business paradigm shift, thus exponentially increase its user base. The real issue is integration; Google is working toward it by delivering maximum products mix in the online domain. It’s not only adding more option but re-branding many of its acquisition to integrate its offerings and there-by adding more value to its products. Today, competitors live in the hopes to sell their ideas or services to Google in order to become a part of profit opportunity by being linked with the dot com giant.

Everybody is keeping an eye on; what will be Google’s next move. Due to high competitive environment, Google also faces problems ranging from management, organisation to technology. One thing is quite obvious, though Google is in the online space so its revenue is based on advertising. However merely adding new avenues for ad is not its only strategy. Google knows that its ad space is high in demand not only because that it has more space but also because it functions on target advertising model. Google not only maximized its income, but also increased the relevance of those paid search ads. Its relevancy is driven by the attention people pay to it. Attention and trust of users are very important pillars in the online business. Google maintains it by delivering tailored and relevant search result. Google focuses on its users’ friendly experience by optimizing its service for end users’ first and for revenue second. It firmly believes that the better the user experience, the more easily money will follow.

Google’s founders Larry Page and Sergey Brin are deeply involved in its mission to organize world’s information. Now Google is widely recognized as the world’s largest search engine that provides relevant result in a fraction of second. The key success is its underlying technology called ‘PageRank’- a unique algorithm formula originally developed by its founder that can sort results according to their perceived importance.

Take away: Google started out as a search engine but soon leveraged other opportunities to hold and increase its presence in the Internet space. It also owns stakes in niche markets. It is one of the most important search engine companies with nearly 50% share. Today Google has competitive advantage over others, but to remain competitive in this information technology world it has to be flexible enough to fit itself in this giant ecosystem. If Yahoo and Microsoft are successful in delivering similar or better services than Google, then Google will be in deep waters.

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