Google Inc.

Innovators

Write up on ‘Google Inc.’

Sagar Gupta

PG20112124

Seminar Group 1

The market leader in the web search industry, with a whopping 90% market share in many countries, Google has risen to this status in a mere decade, with Sergey Brin and Larry Page started this company in 1999. The company completed it IPO in 2004 at a mere $85 a share. By January 2010, this had risen to more that $600 per share. Google has a unique reputation of providing user customized web search results at no charge by monetising through advertising. Apart from web search, Google has made a foray into numerous domains that included Gmail, Google Docs, Google Calendar, Google checkout and many more that, mush like its web search venture have threatened the businesses of numerous competitors.

Google’s innovative search engine that runs on Brin and Page’s own created PageRank algorithm that unlike Yahoo’s former AltaVista’s algorithmic search engine that ranked page relevance based on keyword frequency (which can easily be manipulated), favoured pages that were referenced to most by other pages. Initially, when Google.com had no advertising, the company’s revenues came in solely through licensing its search algorithm to other web search sites, including Yahoo.com.

Overture (later acquired by Yahoo for $1.6 billion) came up with new model of monetising search through paid listings. Advertisers bid for keywords, and it were these that determined the order of listings on the search pages. These were sold on a ‘Cost per Click’ basis (CPC), but could easily be manipulated. Google in 1999 introduced their paid listings that were sold on a cost per impression basis, that was more effective in bringing revenue to Google. These, as well as a few more innovative ventures of providing advertising space like AdSense and Froogle, made Google the more preferred site for advertisers and threatened the revenues of major competitors.

Google has been able to maintain its status as the most...