The Google Case Analysis

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Category: Business and Industry

Date Submitted: 11/20/2012 02:54 PM

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Question 1. : Present a summary schematic / schema of Google’s relationship with the various categories of relevant actors in the Web-search business sector. Explain the nature of Google’s relationship with each category of actor.

Answer 1. :

Relationship between Google and Advertisers

The first thing we have to keep in mind about Google’s business is that it’s an advertising marketplace. Google charges money for listings. Every time someone clicks on an ad, the company that is listed gets charged. The amount varies depending on the competition for the particular key phrase that was searched.

The thought of making money without any tangible products can be difficult to understand but it is what makes Google so innovative. Google gets the money from their advertisers but the advertiser pays only when someone clicks on their ad. This differs from traditional advertising where advertisers are required to pay whenever their ad is displayed on a banner network. The consumer who is searching for a particular product or service sees only relevant ads. So it’s this type of advertising that creates a win-win situation for Google and the advertisers

Advertisers are drawn to Google because of the search traffic it offers. Google’s search engine has proven to be an extremely effective means of matching relevant information with user needs, allowing advertisers target the right audience. This has helped Google get a high bargaining power over advertisers because today it is the most popular search engine on the market. It is important to note that no single advertisers accounts for a major share of Google’s revenue, which mean that none of them have controlling interest which gives Google a sizable advantage. Moreover, Google allowed certain advertisers to penetrate markets and attain customers that were unattainable to them before. This empowered individuals and small mom and pop shops that would otherwise reach only a limited audience.

Google advertisers sometimes...