The History and Growth of Google

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Table of Contents

Introduction
The search engine
Dwindling fortunes in search
The dilemma
Current web consumers trends
Conclusion
Reference List

Introduction

Google is a term that almost everyone who uses a computer recognizes both the computer smart and those who are not. Google has grown rapidly since it was founded in 1998 and made huge milestones in the short time since its inception.

The founders of Google Inc are Sergey Brin and Larry Page who met at Stanford University for their graduate studies in computer science. They developed the search engine as a class project and it was called BackRub then. It operated in the Stanford servers. In 1997, they changed the name of the search engine to Google.

The search engine

Millions of users across the globe use the Google search engine. The search engine can be used in a number of languages found around the world. Google is the leading search engine in the United States. It leads the market and by 2006, it had about 48% of all internet searches (Vise, 2006). Its closest rival yahoo came in second with 22% of all the internet searches.

Undoubtedly, it has surpassed major competitors and its rapid speed in developing new technologies has placed it ahead. Vise says that Google is the course of becoming global (2006). However, before it does that it needs to tackle the obstacles it faces in the Asian countries. For instance in China Google has been in tug of war with the China government for quite sometime now which supports the local search engine called Baidu.com.

In Japan Google faces fierce competition from yahoo, which has millions of users. In addition, in South Korea Google penetration is slow as the government supports local search engines, which enjoy a large market share. To gain a holding in such countries Google has had to take an action and market its brand in Korea.

On the other hand, Google has yet to become very successfully in the developing countries not because of government censorship, but due to the inaccessibility of the web to many people. If the web access increases in the developing world Google will certainly do well as the countries have limited technologies and thus cannot afford to develop search engines that would give Google a run for its money yet.

Dwindling fortunes in search

Google may have dominated the search business but the fortunes are dwindling as new competition has come in such as Bing. Bing is gaining popularity as well as other sites that are offering consumers and advertisers alternatives. It therefore means that Googles core business of online search is reducing gradually.

Since its inception, Google has posted impressive growth rates and investors have been very interested in its stocks over the past years. However, the growth has slowed which has left many investors a bit worried. Google faces stiff competition from Microsoft, which has been around longer and has a bigger financial muscle than Google.

Microsoft dominates in operating systems for desktops and Google has been forced to take radical decisions which have impacted on their core business by having to spend money in other ventures such as paying $ billion to own a 5% stake in Time Warners AOL which Microsoft wanted to buy and lock out Google search engine.

Moreover, there are fears Microsoft might embed msn search in its future operating systems and this speculation has seen Google pay Dell- a PC manufacturer to embed Google as its default search engine (Vise, 2006).

The dilemma

Google realizes the new challenge and according to the company is unsure of its next act that goes beyond its core business of search that has most certainly brought it unparalleled success. In a bid to maintain its success, Google has diversified its activities.

For instance, it has purchased YouTube at a cost of $1.6 billion, Admob a mobile advertising platform at $750 million and wager on ad network DoubleClick at $ 3.1 billion. It is important to note these ventures have not yet contributed significantly to Googles $23-billion-a-year revenue stream (Copeland & Weintraub, 2010, p 1). Even Googles successful product of the Android operating system has yet to make a huge impact on the companys revenue.

Googles search business had been growing at between 30% and 40% yearly and the total revenue twice that. Long-term growth for the search business was projected at the range of 17% to 15%. However, analysts estimates about 91% of Googles total income to come from Adsense and Adwords business and about 99% of the profit too (Copeland & Weintraub, 2010).

The projected growth for 2010 was 18% in earnings. That was a third of what Google used to average in about five years ago. Compared to other companies that is an impressive growth but for Google the figures are unimpressive. The company seems to have joined the trend of other companies such as IBM, Microsoft, eBay that had their growth stagnate at some point after a successful takeoff (Copeland & Weintraub, 2010).

Consequently, Googles image has been tainted at the Wall Street from a growth company to that of a cash cow. The companys shares dipped from 4 January 2010. This is a worrying trend considering that when Google first listed its shares in 2004 at the price of $80 and quickly the price doubled attracting many investors (Cusumano, 2004). Investors are worried about the declining share value and the ability of the company to keep up to date with consumers rapid change in their web use.

In addition, the investors are worried because Google has been mum on its plans beyond search. Googles absolute refusal to provide Wall Street analysts with any forward-looking financial guidance only compounds the risk, uncertainty and volatility involved in investing in the company (Vise, 2006, p. 24). The lack of a clear future vision scares the investors because people want to invest in a company that has growth potential (Copeland & Weintraub, 2010).

Current web consumers trends

The way consumers use the web has changed with the advent of face book and twitter. The social networks have attracted massive number of consumers who spend a considerable amount of time in the sites. The people who log onto the social websites can use the sites for various things such as keeping in touch with their friends or even getting information.

Many people will pose questions on the sites about a product they may want or information. Within minutes, their logged friends respond to the queries and thus they do not have the need of going to search the information from a search engine such as Google. Such trends are a threat to the continued dominance of Google.

The search engine is viewed as serious business kind of site for sending email and not for socializing and this can be confirmed by its latest attempt in social networking with their Google Buzz that had people complaining because the sites shared their contact lists information without their permission (Copeland & Weintraub, 2010).

The new products that Google has rolled out in the market are making it a one-stop shop and this can make many consumers hung around sites that Google operates thus increasing its revenue. On the contrary, critics of Google say that as much as it is a force to reckon with in the internet they lack a sense of how people share and collaborate (Copeland & Weintraub, 2010, p. 1).

Moreover, Google has to ensure that its new products retain its initial concept of speed and relevancy (Oser, 2004). Doing otherwise would compromise the brand that many people have come to trust. Google needs to change the way it does business if it is remain relevant for posterity as there is no stopping other people from coming up with a better search engine than Google (Cusumano, 2004).

Conclusion

Google has a bright future ahead, we cannot say that its best years are over yet but it needs to come up with ways of staying ahead of the pack. In the past, the company has done well in capitalizing on other companies ideas and come up with innovative products to meet the peoples needs.

Today, the needs that web users have keep changing and Google must keep pace with the trends so as not to lose consumers who might find other search engines or sites that meet their needs better. It must look for ways of dealing with the obstacles it encounters such as governments censorship. Moreover, it must ensure that as it expands rapidly it does lose its core values or make costly mistakes (Vise, 2006).

The company is seeking a global share it must tailor the search engines and all its other products to the local needs of the consumers who are scattered in many nations across the world. The people have different cultures and needs thus Google cannot ignore that fact and assume that products that fit its core American market will serve other communities just as well by just changing the language.

No, it needs to customize the products to fulfill the needs of diverse people because as much as there is globalization people still long to remain unique. Thus, a one solution for all cannot work for Google in this era.

Reference List

Copeland, M.V., & Weintraub, S. (2010). Google: The Search Party Is Over. Fortune, 162 (3), 1. Retrieved from MasterFILE Premier.

Cusumano, M. A. (2005). Google: What It Is and What It Is Not. Communications of the ACM, 48 (2), 15-17.

Oser, k. (2004). Google challenge: growth without sacrificing brand. Advertising Age, 75 (19), 1. Retrieved from MasterFILE Premier.

Vise, D.A. (2006). Google. Retrieved from https://foreignpolicy.com/2009/10/16/think-again-google/

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