Running head: GOOGLE’S STRATEGY IN 2009

Google’s Strategy in 2009

Name:

Course:

Institution:

Tutor:

Date:

 

 

Google’s Strategy in 2009

Introduction

Google, which was first named BackRub by Larry Page and Sergey Brin, has grown from being a search engine that was just used to count and examine keywords and metatags found in other websites to the current billion-dollar company used by billions of people worldwide as a search engine and for other purposes (Gamble, 2010). Like many other companies in the business world, it has implemented various strategies and policies in order to get to where it is today. The company has also encountered its own challenges in implementing these strategies despite its success. As compared to other companies that were having financial difficulties at that time, Google was much better off. In fact, it was growing while other companies were either stagnating or declining. In order for a company to undergo further growth or to make improvements, it is essential to review what, if anything, went wrong in the first place and what strategies or policies can be put in place to remedy the situation. Google’s future performance will depend on how the company continues to address the user’s needs, both business based and ethics based.

Company’s Situation

            As mentioned, the year 2009 saw the company grow in comparison to the other companies that were either stagnating or declining due to the difficult economic situation experienced. The company got a year-over-year revenue growth of 3% during the second quarter of the 2009 fiscal year. Most companies as large as Google and others much smaller experienced 25% sales decline during the same year. In other words, the company’s strategies had insulated it from this “hit” of the recession, which had almost destroyed other companies. The main strategy that led the company to attaining such growth was that of dominating internet advertising. As well known, billons of people can now access the internet. This gives advertisers a good opportunity to do their advertising through the internet as opposed to the traditional modes of radio, television and newspaper advertising.

The features of the company’s site, which include weather, local search, Google maps, book search, Blogger, Gmail and airline travel information amongst other features, gave more people reasons to use Google. Consequently, the company found opportunities to post internet ads for diverse advertisers. Additionally, the company had acquired Double Click in the previous year. This gave the company an opportunity to diversify its internet ads to include banners. The company also had a strategy that incorporated dominating mobile device advertising. This became very successful. For example, 63% of searches performed through the cell phones were accounted for by Google (Gamble, 2010). The incorporation of Android (an operating system) would be used to increase the mobile phone use. This is because it would provide a web-based calendar, e-mail, Google maps, Wi Fi, GPS, a browser and other features. This system would be sold to any cell phone company that was willing to sell phones with internet access (GI). Such phones would also be sold at a lower price $179 as compared to their competitors, such as Apple iPhones (Gamble, 2010).

Unfortunately, there were innovations and acquisitions that did not bring in as much revenue as expected. For example, online videos watched through YouTube brought in less than $200 million worth of revenue in the year 2007. This was despite the fact that 5 billion videos were being watched each month. Additionally, Orkut, a social networking site, did not equal the success of other rival social networking sites. The GI phones were found to be advantageous as compared to the iPhones. This is because the phone’s QWERTY keyboard was of preference to majority of the consumers compared to the iPhone’s keyboard. However, the general thicker design of the GI was not preferred by some consumers, as they preferred the iPhone’s design. Despite all these issues, LG, Nokia and HTC were all in the process of launching their Android phones in the year 2009.

Additionally, the company intended to introduce “cloud computing” in place of the traditional hard drives used on desktops. This means that businesses could use the internet in place of the intranet or the traditional hard drives. This was expected to grow into a $95 billion market by the year 2013. According to the company, cloud computing would be beneficial in many ways especially to the corporate world. Such benefits include easier collaboration among staff in different departments, lesser costs on acquiring software, and lesser costs on computing, amongst others. To honor this, Google Apps was launched as a competitor to Microsoft Office in the year 2008 although it had been launched earlier in the year 2006 as a product.

Problems/Issues to be Addressed

            The company has made tremendous progress through putting in strategies, principles and policies in order to be at the top of the competition. Incorporation of Chrome Web, Double Click, Android, amongst others, has enabled the company to maximize its operations. This made Google grow into a much bigger company. However, as is the case in other big companies such as Microsoft, Google is experiencing pricing problems. This is because of pressures coming from the broader market. Google’s acquisition of companies such as DoubleClick and YouTube has been one of the major reasons it has had an advantage during such market problems. This is the reason why it did not involve itself in similar deals in the year 2007 and 2008 (Medaille, 2010).

The company has had its share of problems in the stock market. In 2007, Google’s stock was at $700. Unfortunately, the company’s stock price went down to $300 in 2008. These are some of the repercussions that have been brought about by the company’s large size as well as the economic situation, which has affected most other companies and businesses. Due to its dominance in web advertising, the company has increased its chances of having fraudulent activities. This includes such crime as click-fraud. Such cases have affected both the advertisers and the users. Although the company is trying to reduce the occurrence of such cases, the prevailing cases are proving to be a threat to both the company’s revenue and the users’ confidence in the company (Medaille, 2010).

The privacy policy has brought both challenges and benefits to the company and the users. Having the data warehouse in a place like the US, which is centrally located is dangerous as it contains a lot of information concerning millions of users. For example, if the U.S government asked for such information, it would easily retrieve it. An occurrence that proved this a reality was in 2005, when the United States Justice Department took a motion to court demanding that Google to comply with a subpoena. The company had gone against the subpoena due to the concerns of the users’ privacy. There are many more challenges concerning the privacy policy being met by the company. In fact, there were accusations that the company was not taking the privacy policy seriously.

In relation to privacy and content approval, there have been challenges faced in dealing with Gmail services and the “Street View” map service. It is appreciated that there are billions of people using these services. The emails being send are quite overwhelming and sometimes it is believed that the processing of mails’ content goes beyond that. The “Street View” has also been accused of having pictures that show people’s homes thus invading on their privacy. It is important to know that as much as the work might be overwhelming, the privacy policy is still kept intact. Mail content is only reviewed and checked for the designated purposes without any further intentions. The pictures taken are also censored in order to make sure that no one’s privacy that has been interfered with in any way.

Analysis to Probe the Problems

            The challenges and problems faced can be analyzed through different ways in order to come up with a solution that will put the company at the top in both its revenue receivership and its customer care. One way of analyzing these problems can be done through getting the user’s feedback. Users are the best people to ask in order to know what they are experiencing when using the company’s services. This also includes asking advertisers for feedback. This can be carried out by having textboxes that can be used to write feedbacks. Such can be incorporated in as many Web pages as possible after one gets search results. The information received can be used to assess the impact of the company on the user and what steps to be taken in correcting/improving the prevailing situations (Gupata, Huang & Niranjan, 2010) .

Another way of analyzing such issues is employing the service of companies that deal with statistics collection. Such companies are more efficient as they save the company’s time in such data collection. Besides, people are more honest when responding to a third party than when talking to the concerned party. This also applies to companies. People will be more honest talking about Google to a second company than to Google itself. Results that have been obtained from honest views enable the company to get precise measures and strategies of how to tackle the problems/complaints.

Another way of probing these issues is by using auditors and other professionals. Auditors give a true and fair view of a company’s financial position and any other areas if requested. Other information received from such organizations as Privacy International and other professional organizations can also be used in order to compare with the rest of the information received thus come up with the disturbing issues. The auditors report will give the state of the financial statements and they can be consulted. In relation to the economic situation of the company, assessing the stock market and analyzing the performance of the company can also be used to monitor the situation of the company. Poor stock market performance indicates that there is a problem, which needs to be checked or addressed.

Ins and Outs of the Company’s Situation

            Privacy is significant to all people, especially the users of the company’s services. Using more improved software in order to make sure that the privacy of the users remains intact is one way of solving this situation. Computer engineers and other professional in that field can be contracted/employed in order to come up with improved programs that will help solve the privacy problem. As mentioned earlier, there is a central data-storage site in the U.S containing information about millions of people. This risk can be solved by making sure that all the information has diverse storage places. It also minimizes the risk of being destroyed due to malicious or unintended faults (Huang et al, 2008). Disclosing information concerning the users should be avoided at all costs. This includes even going to court as was in the case of 2005.

The company has dominated the web advertising industry duet to the 2009 strategy. However, as is seen, it has come with its share of disadvantages. For example, more fraud-click activities are on the increase now than they were before these services started. In order to reduce such activities, programs to make such activities difficult to take place should be administered. This also includes censoring the users placing their ads in the Webs. Any financial problems noted or pointed out by auditors should be addressed using financial advisers, auditors and other professionals in the same field. The size challenge should also be administered by having competent and qualified staff in order to take care of the company’s business without requiring a lot of supervision.

Pros & Cons

            Improvements made in the areas of complaints will make the users gain more confidence in the company and their services (Bell & Sievert, 2007). It will also bring more confidence to the advertisers. When these significant parties have confidence in the company, the company will more likely than not record growth. The other advantage of making improvements is that the privacy of the people will be contained. There is nothing as satisfying to a user as knowing that any information being fed to a particular system is safe and cannot be accessed by unauthorized people (Piercy & Lane, 2009). Using professionals such as auditors, financial advisors and professional organizations to either retrieve information or find solutions to problems, is more likely to bring good results than using other unprofessional means. In most cases, unprofessional means such as using opportunistic organizations bring biased feedback or results.

A disadvantage is that computer engineers, specialists and the installation of advanced software and systems, is expensive. Being a multi billion dollar company, Google may need additional  billions of dollars in installing advanced systems all over the world. The other disadvantage is that even after the installation of such systems, they may be continued experiencing of the same fraudulent activities. Having more competent and effective staff may be costly to the company in terms of having salary increments and recruitment of such staff. Unfortunately, this might not eradicate the problems experienced when a company is as big as Google (Mrdaille, 2010).

 

 

Recommendations

            The firm can afford to put improved systems and software than can minimize fraudulent activities. The firm can also employ competent and intelligent staff that can come up with other ways of reducing such activities. Although such means may not completely eradicate this problem, they will play a big role in minimizing these activities that pose a threat to both the user and the company as a whole (Medaille, 2010). The company has the capability of making sure that the data being fed is kept private. If such map services as “Street View” jeopardize the privacy of the people, they can be censored or completely done away with. At the end of the day, the user is the most important party; if he/she is dissatisfied by the services, then he/she will use other search engines – a loss to the company. The financial report and analysis given by the auditors and other professionals contracted by the company should be taken seriously. As stated earlier, the performance of a firm in the stock market tells a lot about a company (Huang et al, 2008).

Conclusion

Google’s future performance will depend on how they address the users’ needs, both business and ethics based. The company is as important because the user is important. If the company fails to address the prevailing concerns of the user and concentrate on increasing its advertising market amongst other services, it might not be at the top for so long. Although it has gained the acceptance of many users worldwide, it is not the only search engine/company available. Users can move to other companies if they feel that they are losing confidence in the company. It is significant that the company satisfies the user in order for it to remain successful in the years to come.

 

References

Bell, D., & Sievert, H. (2007). Communication and Leadership in the 21st Century: The Value of Communications Management in Corporate Governance, Global Market, Change Process and Media. Gütersloh: Bertelsmann Stiftung.

Gamble J. E. (2010). Google’s Strategy in 2009. University of South Alabama.

Gupta, V., Huang, R., & Niranjan, S. (January 01, 2010). A Longitudinal Examination of the Relationship between Team Leadership and Performance. Journal of Leadership & Organizational Studies, 17, 4, 335-350.

Huang, P., Louwers, T., Moffitt, J., & Zhang, Y. (January 01, 2008). Ethical Management, Corporate Governance, and Abnormal Accruals. Journal of Business Ethics, 83, 3, 469-487.

Medaille, A. (January 01, 2010). A Review of The Google Way: How One Company Is Revolutionizing Management as We Know. Journal of Web Librarianship, 4, 1, 102-103.

Piercy, N., & Lane, N. (2009). Strategic customer management: Strategizing the sales organization. Oxford: Oxford University Press.