Danny Tran, CSUCI

Company Background Co-founded by Larry Page and Sergey Brin while they were Ph.D students at Stanford University. Started out as a research project. Founded Went public in Headquartered in Mountain View, CA. Company is focused on innovations. $59.82 billion company. 49,829 employees Search Market Share, Year End 2008, and Change in Market Share ’07-’08 (Data Source: Hitwise)

Products Web-base Products – Search tools – Advertising services (money maker) – Communication and publishing tools – Development tools Operating systems – Android, Chrome OS Desktop applications – Google Chrome, Picasa Mobile applications – Youtube Hardware – Google Glass, Google Phone Services – Google Ideas (think tank)

Article 1: Searching for Value Google is well known for providing a unique work environment for employees that provides plenty of benefits. These benefits are expensive. Are they worth?

Article 1: Cost of Employee Benefits Costs: – Google’s operating costs exceed $1.5 billion per quarter (Kafka 2009). Payroll-related benefits account for about 50% of revenue – Food expenses alone exceed $63 million just for Us operation (Sridharan, 2008). – Spent $37,000 per child for day care service(Young, 2008). Benefits: – Satisfied employees equates to satisfied customers which enhance firm profitability and market share – Google had $209,624 in profit per employee in 2008, beating all other large tech companies in the sector like Microsoft, Apple, Intel and IBM, and competitor Yahoo! (at $31K per employee) (Pingdom 2009).

Article 2: Google’s Business UNDERSTANDING THE INCREASE IN ONLINE AD SPENDING SEARCH ADVERTISING How Much Do Advertisers Pay Per Click? – IP Addresses and Geotargeting AD NETWORKS – DISTRIBUTION BEYOND SEARCH – Ad Networks and Competitive Advantage MORE AD FORMATS AND PAYMENT SCHEMES CUSTOMER PROFILING AND BEHAVIORAL TARGETING PROFILING AND PRIVACY SEARCH ENGINES, AD NETWORKS, AND FRAUD THE BATTLE UNFOLDS – Strategic Issues – More Ads, More Places, More Formats – YouTube – Apps and Innovation

Google’s Search Engine Technology High Level Google Architecture Web crawling: Uses a software called web crawler to navigate the web. Sorting the pages by content and other factors Indexing the documents: keeping track Algorithms: gets to work looking for clues to better understand what you mean and based on these clues they pull the relevant documents from the index Ranking the results

Understanding Search Advertising

Is an online advertising service that places advertising copy at the top or bottom of, or beside, the list of results Google displays for a particular search query. The choice and placement of the ads is based in part on a proprietary determination of the relevance of the search query to the advertising copy. Is Google's main source of revenue. Google's total advertising revenues were USD $42.5 billion in Offers cost-per-click (CPC), cost-per- thousand-impressions

Allows publishers in the Google Network of content sites to serve automatic text, image, video, or interactive media advertisements that are targeted to site content and audience. $9.71 billion annual revenues These advertisements are administered, sorted, and maintained by Google. They can generate revenue on either a cost per-click or cost per- impression basis.

Google Business Model

Google’s Competitive Edge Company has developed an strong infrastructure base that guarantees a fast and efficient search engine. Because of the incredible speed, a user is less inclined to switch to a competitor. Spent around $7 billion on their infrastructure in Strong brand Financially stable billion-data-centers-2013/

Challenge for The Future In the next few years, paid search is expected to grow by only 13% annually, whereas mobile advertising is expected to grow by more than 200% in total by Social network advertising is expected to grow by nearly 30% annually. Lack of real engagement with the Google+ network. Lack of product integration.

Google’s Strategy for the Future Earn: Focus on search advertising business. Entice & Defend: Enticing people to use services that can either deliver ads or collect data to improve targeting. Expand The Pie: Seek to increase internet usage among people. Experiment: letting employees experiment with new projects.

Quiz 1. Which product is Google’s biggest source of Revenues? A. AdWords B. AdSense C. Doubleclick 2. Identify the correct order on how search engine works: A. Web crawling->Indexing->page ranking B. Indexing->page ranking->web crawling C. Page ranking->web crawling-> indexing 3. Who are Google’s main competitors in the search engine business? A. Facebook and Twitter B. Yahoo and Microsoft C. Intel and Dell

Reference Kafka, P. (2009, April 16). Google revenue slumps but cost cutting pays off. The Wall Street Journal Digital Network: but-cost-cutting-pays-off/ Sridharan, V. (2008, April 23). Google's Ginormous Free Food Budget: $7,530 Per Googler, $72 Million A Year*. The Business Insider: Young, C. (2008, July 30). Are Killer Benefits Poised to Kill Employee Morale and Your Bottom Line? Retrieved from HR Resource: amit-singhal-sxsw/ amit-singhal-sxsw/