Business Level And Corporate Level Strategies Of Google

Introduction

There is no need to tell you about Google you all use the products of google daily in your life. Today we are going in-depth into this Trillion dollars company. It has a Market capitalization of a trillion dollars as of today.

History

Google was not the first or the most profitable Search Engine company but due to the founders of the company Larry Page and Sergey Brin the company survived in the competitive market and became the most profitable search engine company on the planet.

In fact, in 1998 Google was bleeding money and the rivals were Goto(also known as the forgotten search engine) and Yahoo were making millions in profits. At that time goto was one of the markets leaders with a revenue of 231 million dollars through Search ADs at that same time Google didn't have a concrete business model yet but google was the most advanced search engine tool available in the market because it ranked pages on the basics of an Algorithm called Page -Rank which was developed as a project when they were Philosophy students at Stanford University at the same time majority of the search engine ranked pages on the text the site content which was the opportunity for Scammers to rank their pages at the top. But the algorithm developed by Larry and Sergey dug deeper into Domain Authority and Backlinks while ranking the sites.

Journey to Profits

Although Google was far ahead of the rest of the completion in the terms of technology it struggled to make money because at that time it was said that there is no money in search ads instead websites like yahoo placed Banner ADs on their home page and generate millions of dollars in profits. At this time Google can use the same idea to make money but Larry and Sergey hated this idea because it degrades the customer experience and it may lose its potential customers. And then Larry and Sergy started studying their rivals and the business model of GOTO interested the founders of Google to go deeper into their business model as the founder of Goto didn't make his own search engine rather he picked the available search engine called Inktomi and added a feature called Paid Search he also introduced a pricing model called Pay Per Click in which the advertiser had to pay only when the ad is clicked by the consumer which decreased spammers and the commonly the used keyword was placed in an Auction which generates competition among the top companies and as other search engines advertisers had to pay for impressions while with this model they had to pay for a click only and it gave advertisers the certainty of conversion and less or none wasted money, then the founders of google got into the business model of goto while going deeper they identified two major flaws they were:

1)As it was based on who pays more some big giants could misuse their power and buy the keywords of other small businesses which may kill small businesses.

2)Due to the high power paying capacity of the big players the small business couldn't buy their keywords. Now Larry and Sergey came with two major improvements which made them the market leader in search engines.

The improvements were:

1)They came with the idea called Quality Score which doesn't just look at the money paid but also the search term of the user and the contents contained in the ads.

2) They came with the idea of using a unique auction the model is called Vickrey Auction Model

the model works this way let's say there are three bidders General Motors, Ford, and Tesla and the bids placed are $100,$1,000, and $10,000 respectively and the bid is for the 'XUV' Keyword on normal model Tesla will win the auction and it needs to pay $10,000 in this model, Tesla has to pay way more than actual cost which it can get for $1,001 whereas in the Vickery model although tesla wins the auction it has $1 more than the second-highest bidder which can save a lot of money. And in the case of Google Tesla has to pay the price quoted by Ford and Ford has to pay the price quoted by General Motors and the ads are ranked based on quality score. Which also increased authentic advertisement and fewer spammers.

Culture of Innovation

Google also gives focus on the creativity of the employees which resulted in the most game-changing products of Google like Gmail

, Google Suggest, Google Calendar, and Google News which were all side projects designed by enthusiastic employees, Now the main part is none of them was asked by the management now the question is how and why do the employees work so hard to do the work that the management didn't even ask for the answer lies in the wonderful practice the company follows which is called the 20% rule that is every employee had to dedicate their 20% time into the things that they are interested if management has or hasn't said anything which will create the environment to fail and learn and rather 1000 ideas may fail but 1 successful idea will make them billions of dollars in profit.

Conclusion

Now let's talk about the lessons of the case study

1) Never Be Discouraged if there are big players in the market rather search for their weak points and make them your strong points,

2) If you want your company to achieve greatness you should make a culture of innovation and encourage failures.