Google Case Study

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Problem statement:

Google has become the largest search engine company in the world. But after 2005, the search related advertisement market growth rate become down. The company entered into three different fields. Each new area has different strong competitors. For rival companies, Google is a powerful threat. Three companies’ strategies are directed against Google. It was bad for Google’s development. Using three ways to develop the strategy will be a waste of resources for leaders. So the core problem is which one of the strategic is the most important opportunities for Google’s improved growth.

Case Facts/Data:

In Exhibit 10, the search engine click through rates for Google is double that of Yahoo and MSN.

In Exhibit 5, the international search related ad market growth rate began a downside trend in U.S. and international market, from 68.8% to 15.7% and 153.3% to 22.9%，respectively.  Average cost per click from 0.43 to 0.48 and 0.27 to 0.35 in U.S. and international market during 2005 to 2008, respectively.

In Exhibit 2, in the international market, Google has 70% international search query share, but the U.S. market only has 36% and Yahoo has 30% market share.

In Exhibit 8, about quality of search results, the most relevant result’s scale is more than 4.2. The speed of website and best features is higher than 4.0. The primary internet portal is less than 3.2.  

In Exhibit 8 (continued), only 23% of respondents use multiple search engines regularly. Google and Yahoo search users have a low scale about primary internet portal (less than 4.0)

In Exhibit 4, search ad spending rate was higher (From 36% to 44%).

In Exhibit 5 (continued), cost per click for Google went from 0.48 to 0.63 and from 0.47 to 0.62 in Google Websites and Google network websites during 2005 to 2008.

Analysis:

        Investing in the quantity of resources is key for the development of this project. We can find the development potential in the market growth rate. In Exhibit 5, the search related AD market growth rate is a downside trend in U.S. and international market. This means research and development cost performance drops to low. It leaders of the company try to find new markets if the company wants to keep the develop rate or become to better.

        We can find the threat of the competitor product from the change of market share. When we have higher market shares than competitor’s, it means the companies can use less cost to win the higher market share, then beat the competitor.  

In exhibit 10, Google’s search engine click through rates is double than other competitor. It means customers prefer to use Google to search. The company has the competitive advantage. The company can use less resources to win the more market share, which is beneficial for company complete its strategy more quickly. It also is in accords with the company’s statement of philosophy—Fast is better than slow. （3rd idea in exhibit 6）.

In exhibit 2, we can see that Google has 70% search query share in the international market, but in the U.S. market it just has 36%. Yahoo is a big competitor in the U.S. market. Google needs to put more energy in home market. It is good for Google beat the Competitor-Yahoo.