Google Inc.

Topics: Google, Google services, Google search Pages: 72 (11296 words) Published: May 24, 2014
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REV: APRIL 11, 2011

BENJAMIN EDELMAN
THOMAS R. EISENMANN

Go
oogle In
nc.

op
yo

Go
oogle’s mission is to organize the world’s inf
n
nformation and make it unive
d
ersally accessib and useful.
ble

— Google’s mission state
ement

In January 2010 Google lau
0,
unched the Ne
exus One mo
obile device— elegant to
—an
ouch-screen p
phone
that a
added compr
rehensive voi recognitio to reduce dependence on keyboar
ice
on
e
e
rd-style text e
entry.
Since the fall of 20
008, Google’s Android ope
erating system had power various m
m
red
mobile phones. But
Google had extend its role w
ded
with Nexus O
One: Google designed the phone and planned to sell it
e
direct to consum
tly
mers. Was ther any limit to Google’s asp
re
o
pirations?

tC

Go
oogle, based in Mountain V
i
View, Califor
rnia, had gros revenues o $21.2 billion and an oper
ss
of
n
rating
incom of $5.5 billion in 2008. A of year-end 2008, the co
me
As
d
ompany had 20,164 emplo
oyees and cash and
h
equiv
valents of $8.7 billion. (Exh
7
hibit 1 shows Google finan
ncials from 19
999–2008.) Founded in 199 the
99,
company complete its IPO in August 2004 at $85 per share. Google’s share price exceeded $6 in ed
4
e
600
Janua 2010, givi
ary
ing the comp
pany a $189 b
billion marke value. Mea
et
anwhile, Google.com enjoy
yed a
65.6% share of all U.S. searche in Novem
%
l
es
mber 2009; Ya
ahoo.com, its closest rival had just 17
s
l,
7.5%.1
(Exhib 2 outlines trends in se
bit
s
earch engine market share Outside th United Sta
e.)
he
ates, Google’s lead
s
was e
even larger, exceeding a 90% share of s
e
search querie in numerou countries. (Exhibit 3 re
es
us
eports
marke share by co
et
ountry.)

Do

No

Sin its IPO, Google had la
nce
G
aunched a flu
urry of produ
ucts that exp
panded its do
omain beyond web
d
search These inclu
h.
uded Gmail, Google Map Google Bo
ps,
ooks, Google Finance, Goo
ogle Docs, G
Google
Calen
ndar, Google Checkout, an more. Ac
nd
cquisitions of YouTube an DoubleClick had expa
f
nd
anded
Google’s presence in online vid and display advertisin These initi deo
ng.
iatives fueled speculation about
d
Google’s strategic objectives. P
Products like Gmail and F
Finance, along with person
g
nalization fea
atures
offere on Google home pag moved th company t
ed
e’s
ge,
he
toward porta like Yahoo and Micro
als
o!
osoft’s
MSN. Book Searc Maps, an Checkout suggested that Google was enterin the traditional .
ch,
nd
t
ng
strong
gholds of e-commerce gia
ants like eBay and Amazo Finally, Google’s ad-su
y
on.
upported soft
tware,
includ
ding e-mail, calendaring, and docume
ent-managem
ment systems, threatened Microsoft’s O
,
Office
and W
Windows offe
erings. These many servi
e
ices and dive
erse competit
tors raised th question: What
he
shoul Google do next?
ld

_______
_______________
_______________
_______________
________________
_______________
_______________
________________
______
Professo Thomas R. Eisen
or
nmann and Smita Bakshi, Sebastien B
Briens, and Shailen
ndra Singh (MBA 2
2004) wrote the or
riginal version of th case,
his
“Google Inc.” 804-141. It was replaced by “
e
w
“Google Inc.” 806-1
105, prepared by P
Professor Thomas R. Eisenmann and Senior Researche Kerry
d
er
Herman Global Research Group, which is now being replac
n,
h
ced by this version prepared by Pro
n
ofessors Benjamin Edelman and Tho
omas R.
Eisenma
ann. This case was developed from p
s
published sources. HBS cases are de
.
eveloped solely as the basis for class discussion. Cases are not s
s
intended to serve as endor
d
rsements, sources o primary data, or illustrations of effe
of
ective or ineffective management.
e
ght
resident and Fellow of Harvard Coll
ws
lege. To order copie or request perm
es
mission to reproduc materials, call...

References: 2 Chad Bartley and Steve Weinstein, High Growth in Search Creates Opportunities for Niche Players, Pacific Crest
Securities, November 4, 2003, p
“Worldwide Web Domination,” Industry Standard, August 6, 2001.
4
Saul Hansell, “AOL Coaxes Google to Try Busier Ads,” New York Times, December 20, 2005.
aspx, accessed January 10, 2009.
8 Robert Peck, Alexia Quadrani, Victor Anthony, and Julia Choi, “Google Cubes,” Equity Research, Bear
Stearns, December 19, 2005, p
9
Saul Hansell, “Your Ads Here (All of Them),” New York Times, October 30, 2005, p
Official Google Blog, September 17, 2009.
11 John Battelle, The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture
(New York: Penguin Group, 2005), p
Google Inc., Form S-1 Registration, April 29, 2004.
Thomas R. Eisenmann, “Betting on Google’s Future,” Wall Street Journal, August 24, 2004, p. B2.
19
“Google: One Million Servers and Counting,” Pandia Search Engine News, July 2, 2007, http://www.
pandia.com/sew/481-gartner.html, accessed January 10, 2010.
Vise and Malseed, The Google Story (New York: Delacorte Press), 2005, p. 256.
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