1. Challenges & Action Plan Google Inc. Group 10 MBA 2010-11

2. Challenges facing Google Inc. RankChallengeRationale 1 Decrease in revenue and profit growth rate Y-o-y revenue growth rate has fallen by 25% (US 22%, Int’l 31%) in 2008 (Exhibit 1) even though its search engine’s market share has grown (Exhibit 3) 2 Managing reputation with users and other stakeholders on privacy, security, competitiveness Litigations under different categories and paid hundreds of millions to settle some of them. Also litigations are faced under different jurisdictions across the globe. (p.7, p.8, Exhibit 1) Failure of manage this issue will alienate large user base for its core and new businesses 2 Retaining its core competences i.e., Organisational Culture, while managing its resource allocation and international growth In 2008, international markets has grown by 41.3% (US by 22.3%) and generated 51.2% of total revenue (Exhibit 1) Issue in making sure that the communication procedures keep pace with the growth (Exhibit 5)

3. Action Plan CHALLENGE 1: ACTION PLAN a.Reduce dependence on search related ad revenues; generate revenue from new businesses Search engine switching cost is very low for users (p.11), which will affect future revenue Increase revenue from low revenue generating, high resource utilizing services such as YouTube, Google Books, Gmail, Google Voice, Google Checkout and “cloud” applications. Modify the business model of successful non-revenue generating services such as Google Talk, Google Chrome, Google Docs and Picasa. b.Improve the revenue generation from network sites Address the advertisers’ concern that 10 to 50% of fraudulent paid-listing click-throughs, ad- listing on unapproved sites, and displaying competitors ads (p.7) c.Develop new products and customer base using it core competence Focus on getting more business customers, such as Google Docs for City of LA (p.10), to provide services built on its strong resources – robust IT infrastructure (p.6) d.Improve resource utilization Review resource allocation to non-core, unsuccessful businesses such as Orkut, Wave

4. Action Plan CHALLENGE 2: ACTION PLAN Built trust that Google stands by its Corporate Value (Don’t be evil, p.6). Strengthen the “don’t be evil” culture among its employees and stakeholders in US and other countries. Litigations in Europe and China can affect it large revenue base : In 2008, revenue from international markets exceeded (51.2%) revenue from US; y-o-y growth rate is 41.3% (only 22.3% for US). Develop superior capabilities in reputation management. This can be through self- acquisition (recruitment) or engage external agencies in US and other countries. CHALLENGE 3: ACTION PLAN Focus innovation (20% of resources, p. 7) to develop products that uses its core capability. Review resource allocation to unrelated businesses such as handset design – Nexus. Promote dynamic capability to meet growing customer needs in international markets Knowledge sharing across borders is a key to promoting core competence at new Google campuses. Technological modifications in the search engine to meet local needs can increase market in Asian countries such as China (26.6%) and South Korea (3%) – (Exhibit 3) Sharing fundamentals across projects (Android with Chrome OS), and transferring and training people will reinforce the culture.