Presented by Benno Marbach Charleston Sin Emily Chang William Cheng

Agenda About Google Business Model Challenges Future Strategy

About Founded by Sergey Brin and Lawrence Page in 1998 “Google's mission is to organize the world's information and make it universally accessible and useful.” Public listed at NASDAQ in 2004 Reported USD $2 Billion Revenue and USD $200 Million profits in 2004 Source: Google web site

Software vs Content Founding Facts Sergey Brin, Larry Page, 1998/2004 Jerry Yang, David Filo, 1994/1996 Vitals $48B, $2B, $0.2B, 1900+$43B, $3.5B, $0.7B, Business Architecture Information-user- advertiser, positive reinforcement loop growing number of users, advertisers and inventory CEO previous experience Dr. Eric Schmidt, CEO, ex-Novell, Sun, PARC Terry Semel, CEO, ex- Warner Bros., Disney, CBS Marketing Service Revenues 98% text ad45% text ad, 30% multimedia ad, 16% subscription service

Online and Offline Information Web pages, Image, Usenet, News, Group, Phonebooks, Maps, Mail order catalogues, Numbers (parcel tracking, patent), Blog, Keyhole Print, Video program, Academic research papers

Search … How they do it? Crawling Index using PageRank TM –Similar to citation index, i.e., high citation imply high impact –Performs an objective measurement of the importance of web pages –No human involvement or manipulation of results -- untainted information by paid placement Hypertext-Matching Analysis –Analyzes page content

4160 results in 0.11 second 1300 results in 0.38 second 2245 results in 0.1 second Same as Google

Paidlisting -- AdWords and AdSense AdWords – add Ad sites to Google AdSense -- add Google Ad to sites

Two Sided Market On the one side – End Users On the other side – Advertisers

End User Side Advertisers End Users Network Affiliates Click on the ads in Google’s or affiliates’ websites 

End User Side Advertisers End Users Network Affiliates Customers get redirected to the advertiser’s websites 

Advertiser Side Advertisers End Users Network Affiliates Advertisers pay Google based on CPC and ad’s position 

Advertiser Side Advertisers End Users Network Affiliates Revenue split between Affiliates & Google 

Competition U.S. Search Traffic Market Share, August 2003 Global Market Share of Paid listing in 2003 Source: Bartley & Weinstein, P.5

Competitive Environment to Google Beta search engine Longhorn MSN adCenter Duplication of business model Network effect of OS Inktomi and Overture integration Acquire more users through content Use Google on web and paid search results Potential competition Work in Progress Threat

Choices for 1.Become an internet portal, self built or merge with AOL Advantage: Securing higher number of end users Disadvantage: Outside of core competence 2.Focus on developing superior search solutions Advantage: Keep alliance with AOL and be focus Disadvantage: Niche player

How to Compete in the future? Provide more relevant features, much faster Provide more accurate information, much faster

No one is perfect! –I'm taking part in a new web project...I'm taking part in a new web project...

The End Any Questions?

Questions? Which are the two markets Google is serving? What are the three key differences between Google and Yahoo, as mentioned in the presentation?