Sample Case Essay

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case

6

Google’s Strategy in 2013
JOHN E. GAMBLE Texas A&M University – Corpus Christi

Google was the leading Internet search firm
in 2013, with nearly a 67 percent market share
in search from home and work computers
and a 97 percent share of searches performed
from mobile devices. Google’s business model
allowed advertisers to bid on search terms that
would describe their product or service on
a cost-per-impression (CPI) or cost-per-click
(CPC) basis. Google’s search-based ads were
displayed near Google’s search results and generated advertising revenues of more than $43.6
billion in 2012. The company also generated revenues of about $2.4 billion ...view middle of the document...

The company also launched its
Google +  social networking site in 2011 to capture additional advertising opportunities. The
company’s Google Glass wearable interactive
computer display was among the company’s
most publicized new projects and ventures. The
eyeglasses containing a camera and computer
display were expected to be available to consumers by year-end 2013. The company was also
developing an Android-powered wristwatch
and a video game console to compete against
Microsoft’s Xbox One, Sony’s PlayStation 4, and
Nintendo’s Wii.
While Google’s growth initiatives seemed
to take the company into new industries and
thrust it into competition with companies ranging from Facebook to Microsoft to Apple, its
CEO, Eric Schmidt, saw the new ventures as
natural extensions of the company’s mission to
“organize the world’s information and make
it universally accessible and useful.”1 In April
2012, he explained the company’s wide-ranging strategic initiatives by commenting, “In
some ways we have run the company as to let

Copyright © 2013 by John E. Gamble. All rights reserved.

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Part 2

Cases in Crafting and Executing Strategy

1,000 flowers bloom, but once they do bloom
you want to put together a coherent bouquet.”2

Company History
The development of Google’s search technology began in January 1996 when Stanford University computer science graduate students
Larry Page and Sergey Brin collaborated to
develop a new search engine. They named the
new search engine BackRub because of its ability to rate websites for relevancy by examining
the number of back links pointing to the website. The approach for assessing the relevancy
of websites to a particular search query used
by other websites at the time was based on
examining and counting meta tags and keywords included on various websites. By 1997,
the search accuracy of BackRub had allowed
it to gain a loyal following among Silicon Valley Internet users. Yahoo co-founder David Filo
was among the converted, and in 1998 he convinced Brin and Page to leave Stanford to focus
on making their search technology the backbone of a new Internet company.
BackRub would be renamed Google, which
was a play on the word googol—a mathematical
term for a number represented by the numeral
1 followed by 100 zeroes. Brin and Page’s adoption of the new name reflected their mission to
organize a seemingly infinite amount of information on the Internet. In August 1998, a Stanford professor arranged for Brin and Page to
meet at his home with a potential angel investor to demonstrate the Google search engine.
The investor, who had been a founder of Sun
Microsystems, was immediately impressed
with Google’s search capabilities but was too
pressed for time to hear much of Brin andPage’s informal presentation. The investor
stopped the two during the presentation and
suggested, “Instead of...

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