Google Inc. : SWOT analysis

Hey frenz... m back after long time. In fact my first post after reaching the US. Here I have come up with a post which is actually my assignment. Its due tomorrow. We had to analyze Google's case and recommend some changes for Google. I m done with my analysis part. Just makin up recommendation. I would welcome your suggestions for google as comments on my posts.

Case Study: Google, Inc.

Introduction:

Google was started as a research project by two Stanford PhD students named Sergey Brin and Larry page. They registered the domain name google.com in the year 1997 and in September 1998, it became a privately owned incorporate Google Inc. With its extensive research on search algorithms and use of state of the art technology, Google successfully established its brand name in internet search engines market. By the year 2004, Google came up covering over 75% of US web search market. Though Google is a dominating player in internet searching market, it has to compete with its rivals in this field where there is no long time entry barrier. Google can expand / change its business model to survive in this best search engine race.

SWOT Analysis:

Strengths:

• Google – Already number one search engine has established a brand name, in which its users trust. It’s dependable, reliable and fast.
• Google needs very little end user marketing as the name itself is getting word by mouth publicity.
• Google has a simple interface and it gives comprehensive results without confusing its users.
• Google has low operation cost as it uses low cost UNIX web servers for indexing millions of web pages across internet.
• Google has hired PhDs who are continuously working hard in order to enhance search algorithms and make searching faster, efficient and relevant.
• By 2003, Google has already powered over 75% of the 300 million searches conducted daily in the U.S. and 300 million plus outside the U.S.
• Google provides an interface to 88 languages to make it comfortable to search for its users in different countries.
• Google uses state of the art search technology to index pages regularly in order to give most updated results to its users.
• Google also weights the votes and ranks web pages with its PageRank technology to give its user access to most important pages first.
• Google is not biased towards advertisers. It clearly separates relevant advertisements and actual results by giving “Sponsored Links” tag to sponsored results when user searches to get information with some keyword. Moreover, it also ranks sponsored links to keep most relevant sponsored links on the top.
• Google offers localized search called “search by location” where users can get results showing vendors, products and services nearby their areas.
• Google also has a range of innovative additional services like Images, Groups, Directory, and News. Google didn’t complicate its website by making itself a portal; rather it kept tabs for these services on its homepage so users can easily navigate and that also keeps the website as simple as it was earlier.
• Google has also come up with solutions for wireless handheld devices, personalized toolbars, catalogues which are added essence strengths.
• Google quickly routes the user to the webpage and doesn’t linger for ad revenue.

Weaknesses:

• Many spammers manipulate Google’s ranking technology by creating dummy sites with thousands of links to pages that they wanted Google to rank highly.
• Google’s link based ranking did not employ actual traffic analysis.
• Google’s Cost Per Click advertising charging and ranking policy is confusing and makes it difficult for marketers to predict where their ads would be positioned and how much they would cost.
• Google’s contextual advertising was perceived by marketers to be less effective in generating sales because visitors to web pages showing editorial content were less likely than searchers to be ready to buy.
• Contextual search algorithms are not 100% perfect and many a times make mistakes.
• Google’s localized search algorithms too sometimes result in errors due to automated indexing.
• Google’s business model is complex, depending upon both google.com and mass market portals for its revenue.
• Although Google is a dominating player among search engine websites, only 50% to 65% of web search queries are answered accurately by it.
• Google doesn’t have “sticky” like Yahoo! And MSN have which can attract users.
• Google doesn’t have highly personalized search by which it could charge users with switching cost if they decide to leave Google’s services.

Opportunities:

• Google can increase switching cost by tracking users’ search histories with their permission and could remind users through emails for the relevant search updates as per their personal interest.
• Google can become a mass-market portal like Yahoo and MSN and can increase switching cost for its users.
• Google can add “sticky” like chat rooms and email systems to attract users and survive in tough competition.
• Google can enhance personalized and localized searching and can also add localized paid listings of advertisers.
• Google can start new services like multimedia, product search, private database, and print media.
• Google can also merge with an established mass-market portal to lock in large number of users and advertisers.
• Google can start giving full fledged services on hand held mobile devices to capture market beyond conventional internet.

Threats:

• Google partially depends upon some portals like AOL. Getting those contracts terminated, Google would lose considerable share of its revenue.
• There is no long time entry barrier in this business. Many competitors can emerge in coming years with same services, better interface and names and can catch up Google’s market.
• Google’s confusing Cost Per Click ranking and charging policy could disappoint its advertisers and company would start loosing many of them.
• Competition and rivalry:

1. Portals like yahoo provide more services and solutions with conventional search than Google do. Google would start loosing its users due to added attractions in such portals.

2. MSN is coming up with its new operating system called “Longhorn” which would be having “implicit query” feature. Longhorn search will be able to search the web, blogs, news sources, hard drive files, email plus attachments all from a keyword search without a browser. Users will be able to search directly from already established Microsoft programs like MS word. This would handcuff users and ultimately it would harm Google’s market.

3. Overture has been Google’s old competitor. Though Google has acquitted more advertisers than Overture, Google’s share of market revenue lags behind overture by 20% and there is always competition for getting collaborated with well known mass-market portals like AOL, Yahoo and MSN.

• Google’s scale might also become a liability in order to cop up with new and enhanced search techniques if company’s ability to modify its algorithms and database architecture was constrained by its server infrastructure and the size of its index.
• If Google comes up becoming portal, it may lose its simplicity and comprehensiveness because of which it is favorite among its users.
• Google can get trapped in issues regarding privacy if it decides to go for highly personalized search for which it has to capture user’s personal information.
• If Google decides to merge with some already established mass-market portal, it will start loosing its well earned brand name.

Recommendations:

• Google’s core competence is its strong search technology which gives accurate results to its users and that also at the right place without misleading them. Google should concentrate on making its search engine much more accurate, relevant and dependable which is most important thing as far as the user’s objective is concerned. Getting more users would also help the company in getting more advertisers and ultimately earning revenue.
• Google should start giving services like print, multimedia, travel, mail, Instant Messaging etc. to compete with one stop portals like Yahoo and MSN, but without changing its simplicity and comprehensiveness. Google can navigate users by putting simple links on its homepage and at the same time it would be able to sustain its traditional looks.
• Google has already started contextual and localized search solutions. It should improve the quality and relevance of results of these services as well as should start gathering revenues from advertisers who are covering certain areas and willing to pay only for the results which are accessed by the users of the area in which they are providing services or products.
• Google should also put in efforts to improve its search algorithms and stop spammers from spoofing and getting their pages ranked high.
• Google should also start providing personalized search solutions by storing users’ information with their permission and making web search comfortable for them when they come back. This would help the company in generating long term relationship with the customers.
• Google should regularly take feedback from its advertisers and should make changes in its charging and ranking policies if it is appropriate for both the parties as well as in favor of search engine users.
• Google can also generate revenue by indexing database of large organization and providing them private search solutions.

Conclusion:

It is not recommended for Google to merge with mass-market portal. Though that would help Google in securing users and advertisers but it would also harm Google’s independent growth. Google has cutting edge technology and excellent minds behind it and it should use that in providing users with 100% relevant search results. Though rival portals are coming up with strategies to handcuff users but finally users would choose the one who gives most accurate search results. As far as profit is concerned, locking in maximum market from quality services would automatically help Google in attracting more number of advertisers to make revenue from.

Thus, Google should keep updating its technology and services with the same simplicity and comprehensiveness as it has been providing since its establishment.