Google Inc.

Google Group Case Study

MBA 664-11: SATISFYING SHAREHOLDERS

September 20, 2012

Problem Statement:

In six short years after its inception, and nearly one year after it went public, search engine colossal Google, Inc. morphed into the world’s largest and most prosperous internet search company, and now face the challenges of balancing their innovative, entrepreneurial, risk taking culture with shareholder apprehension, media and industry analyst criticism, and their unyielding competitive environment. To facilitate a course of upward trajectory, Google must decide how to continue growing by venturing into new arenas, staying focused on their distinct core competences, or a combination of both.

Analysis:

Founded in 1999, Google, Inc. established itself in multiple facets as a profoundly successful company, dominating the search engine market with thirty-seven percent U.S. internet searches, as well as sixty-eight percent share worldwide (Eisenmann & Herman, 2006). In fiscal year 2005, Google had gross revenues of $6.1 billion and an operating income of $2.0 billion. Google’s initial public offering began at $85 and soared to $414 in just over a year. With total dollar market value of the company's outstanding shares at over $120 billion, double that of Yahoo!, their closest competitor, Google tipped the scale of being able to leverage its capabilities, attracting a host of advertising companies unable to resist the potential profit opportunities. Google stock, with a price-earnings ratio of nearly 70, represents one of the richest deal-making currencies ever recorded.

Google continues to capitalize on several of their core capabilities. Their unconventional management style attracts talent and provides an environment that cultivates creativity and high performance from their employees. Organizationally, they are nimble and able to leverage quick decision making. They are good at managing their costs and keep much of their information closed to the...