QUOTE AND NEWS
The Hindu Business Line  24 min ago  Comment 
Google today announced a deal to buy Moodstocks, a French startup behind technology that helps smartphones recognise whatever they are aimed at. Moodstocks caught the US technology giant’s eye for ...
CNNMoney.com  8 hrs ago  Comment 
A man worried that Google was watching him may have carried out a series of attacks against the company's Mountain View headquarters, according to police.
Cloud Computing  Jul 5  Comment 
Microsoft took another step toward being king of the cloud hill when it announced in January that it was releasing its Azure stack to the public. There are many technical reasons why this is cool, but more importantly, it's the psychological...
Benzinga  Jul 5  Comment 
"Ok, Google - what commands can you perform?" Alphabet Inc (NASDAQ: GOOG)'s Google property has a new database of commands that its search engine can handle. Here is a list of some of the more notable, exciting, bizarre and useful...
Clusterstock  Jul 5  Comment 
Alphabet has a new way to keep the pressure on employees that work in its non-Google "Other Bets" divisions. Those subsidiaries, which lost about $800 million last quarter, are creating new types of stock that will fluctuate depending on their...
Forbes  Jul 5  Comment 
As Honeywell and Google’s Nest compete for control of the smart thermostat market, rival thermostat makers are tapping the top talent at coding boot camps to remain relevant.
The Economic Times  Jul 5  Comment 
The Apex Court also directed the government to hold a meeting with the major search engines and petitioners in the case.
The Hindu Business Line  Jul 5  Comment 
After Juno, a spinning robotic NASA spacecraft built like a tank entered into the orbit of Juptier, the largest planet in the solar system, search engine giant Google celebrated the momentous occasio...
newratings.com  Jul 5  Comment 
MOUNTAIN VIEW (dpa-AFX) - Google said that it agreed to purchase an additional 236 MW of energy from two new wind farms in Norway and Sweden. At the end of last year, the company announced that it purchased a whopping 842 megawatts (MW) of...
New York Times  Jul 4  Comment 
Two self-driving car pioneers have distinct views of the role of the person behind the wheel.




 

Google Inc (NASDAQ: GOOG), a global information technology leader, specializes in how people access and interact with information. Google provides the leading search engine along with many online services such as Gmail, Adsense, and Chrome. In fiscal year 2010, Google reported $29.3 billion of revenues and $8.5 billion of net income. Google operates in over 50 countries with unique domain names for each country. Internet advertising is the fastest growing segment of the advertising market, but still only represents 8% of total U.S. advertising dollars -- suggesting considerable room for further growth. To tap these opportunities, Google has used the profits from its paid search business to support innovative projects such as Google Editions and the Android Market.

Business Overview

Google’s search tools allow users to efficiently search through vast amounts of web-based information, organizing and delivering results based on relevance. It also has a long and growing list of products in many other areas of computer applications. Consumer usage of its products is free, financed through advertising (96% of 2010 Revenues) and licensing (3% of 2010 Revenues) sales.

Co-founders Larry Page and Sergei Brin created Google's core PageRank technology to archive and organize Internet webpages and develop a searchable database. The basic tenet of PageRank is that when one website links to another, the first website is endorsing the second. Pages are then "ranked" according to the ecosystem of all web pages archived. While the company has since utilized numerous other ranking systems, PageRank still remains a central technology. Google also creates search products for photos, videos, and specific websites types such as blogs. Google does not charge consumers for its search capabilities, receiving most of its revenue from advertising and a small portion from licensing its search technologies to enterprise companies.

Trends and Forces

Google's Advertising-Based Business Model is Susceptible to Economic Cycles

Advertising is a major revenue driver for Google, with 96% of its revenue coming from advertising. This dependence is a concern in a down economy since advertising is generally the first source of cost-cutting for companies[1]. Google has seen an increase in the number of paid clicks generated by an increase in aggregate traffic and the continued global expansion of their products, advertiser base and user base. The decrease in the average cost-per-click paid by advertisers was primarily the result of the strengthening of the U.S. dollar relative to foreign currencies.[2]

Google's Web Presence Stands to Gain from Growing Internet Traffic

Since 2000, the number of worldwide Internet users has more than doubled. However, certain regions have grown faster than others. Google seems to be positioning itself to grow even more substantially internationally likewise JBVEF especially in the Financial Sector, earnings, and advertising Google is poised to hold its own and continue to deliver top notch results. The US market is responsible for around 48% of Google's revenue by geography while 39% comes from the rest of the world (the UK brings in around 13%).[3]

Google's Free, Advertising-Supported Offerings Prove Highly Disruptive

Google has completely transformed the world of advertising in its efforts to connect users to information. Its free offerings have been highly disruptive to well-rooted industries, provoking frequent legal conflict. Viacom is seeking damages in excess of $1 billion from the posting and distribution of copyrighted materials on YouTube. With the 2004 launch of Google Book Search, authors and publishing houses reacted to the millions of copyrighted books being downloaded for free. The Authors and the Association of American Publishers sued Google for copyright infringement in 2005. Through a settlement, Google continues to make books digitally available, to the chagrin of publishers and book retailers such as Amazon. With the launch of Google Earth, the appeal of America Online's MapQuest basically disappeared overnight. Google's Android-based smartphones, equipped with free GPS navigation services, have upended the need for TomTom, which comes at a charge to consumers. Google's Gmail, Google Apps, and Chrome also competes directly with Microsoft's Hotmail, Office Suite, and Internet Explorer respectively[4].

Competition

Although Google in its broadest perception has gained an unparalleled marketplace acceptance, in the narrower search market its competitors are Yahoo! (YHOO) and Microsoft (MSFT), which is currently expanding into the online search and advertising business within the US and Baidu.com (BIDU) in China. Yahoo, founded four years before Google, was historically the leading online search site, but in January 2009, Google made headlines by overtaking Yahoo in unique users per month. Relative to Yahoo!--and almost any company--Google's expenses are quite low. The expense breakdown suggests different priorities for the two companies: Google's highest cost sector is product development, at 9%, while Yahoo! allocated 20% of revenues for sales. And while Google spreads its costs evenly among the three principle areas, Yahoo!'s expenses are clearly concentrated in sales, with development and administration trailing far behind.

Because Microsoft has many sources of revenue beyond advertising, it is difficult to compare it in more detail to Google and Yahoo!.

With a plethora of social networking websites and platforms making their way onto the internet, Google faces stiff competition from websites such as Facebook, Twitter, Groupon and LinkedIn.

Google's Android smartphone operation system is also in direct competition with Apple (AAPL) , Microsoft (MSFT) and Research in Motion (RIMM) in the fast-moving, competitive smartphone market. These corporations also uses JAVA programming [[1]] (BlueJ) language for development and research as well.

As Google expands into e-commerce and Local services using its Google Offers, Checkout, and Wallet , it is also encroaching on an estalished player in Groupon as well as Facebook's Deals.

Sources

  1. GOOG 2008 10-K pg. 19  
  2. GOOG 2009 10-Q1 pg. 27  
  3. GOOG 2009 10-Q1 pg. 28  

46. Android GPS tracking 47. The Android Phone

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