Google_Case_Paper

Revenue Earning Approximately two thirds of Google’s revenues come from advertising on the company’s own site. Most of this is generated from search engine advertising. Firms are able to create an account on Google and load or design the ads they want shown. For each ad, they can specify keywords that, when “Googled” by a user, will bring the advertisement up on the right side or top of the search results page. They can also specify the maximum cost per click (CPC) they are willing to pay for each ad. This is how Google charges for their advertising services; customers pay a predetermined price (by themselves) for each time a user clicks on their ad. If two firms choose similar search targets for their ads, the order in which they are shown is determined by an ad rank. This ad rank is calculated by multiplying maximum CPC by the quality score for the ad. The higher the maximum amount they are willing to pay (CPC) the higher their ad rank will be. The quality score is determined based on many different aspects of the ad itself. Some of those aspects include click through rate, keyword performance and how well the specified keywords match up with the article. The quality of the web site to which the ad takes the user is also taken into account. All these factors go into the quality rate, which then determines the rank of the ad. Obviously, the ad with the higher rank will be listed first in a situation where search terms match more than on ad. Google acquires most of the remaining portion of their revenues from sponsoring ads on other websites through its AdSense network. This expands their customer reach, thus increasing their ability to target customers with specific interests related to the ads that are shown when they use those sites. This creates a larger return for the advertising companies, which attracts more business for Google. The websites that have this contract with Google generally receive seventy to eighty percent of the profits Google receives for the ads. Search Market Domination Value Streams Many people use extensions of Google such as Gmail, Google docs, Google groups and G-chat. This helps create staying power and has developed a network for exchange. There’s a large amount of people able to communicate through these different channels and even some of these interlock like Google groups and docs. The fact that these are all free also helps. Complimentary products are available in forms of the ability to export to Google docs and connectivity to Gmail. EasyBib.com allows you to save a created bibliography as a Google doc. After I got my current cell phone with Internet capabilities and a specific e-mail portal, I proceeded to set-up my email and when I selected the portal, it gave me several suggestions for different e-mail providers I could have along with a custom option near the end. Gmail was listed second. Customer Experience As far as customer experience, I personally believe that Google dominates the search market because its simple and direct search set-up. When you go to the Google web site, there are no advertisements or news highlights to distract you like many other search engines feature on their home page. All of this and many other services offered by sites like Yahoo is available, of course, through Google; however, you must select it to see it. I like this set-up because I don’t go to search engines for news or anything similar to that, I go to it for search! Even once you see the search results, they are still unobtrusive, text ads. Even though, according to the chapter, they are beginning to use more image ads I believe that it will still be done in a manner where your search has more prominence than the ads. This is not always maintained with other search engines. I know I actually tend to click on ads more on Google even though they don’t stick out as much in comparison to other search engines. Competitive Forces There is a very intense rivalry in the search market especially amongst Google, Yahoo and Microsoft. This motivates all players in continuing to innovate and evolve their search capabilities and features. The possibility of new entrants with any type of competitive run towards a substantial market share is slim unless it is an already well-established and lucrative company (as in the case with Microsoft and Bing) that is able to make major investments into starting a search engine. As it says in the chapter, “This is clearly no longer a game for two graduate students working out of a garage.” Google does allow a certain amount of buyer power in letting the advertising companies choose their maximum CPC. This actually encourages them to bid higher in hopes of securing the top spot on search results. Profiling Whenever you visit a website for the first time, the server is able to essentially “tag” your computer by assigning a cookie to it, or a string of numbers and letters that makes your computer identifiable. The server collects information like your IP address, type of browser used, type of computer used and the operating system. The next time you visit the same site, your browser will be recognized by the server through this tag or cookie. Whoever is collecting the information can begin to make a sort of history about what types of sites you visit and, in a sense, begin to compile your interests. This method of targeting allows sites like Google to assign specific ads to your browser, which are compatible with those interests. Ad networks that serve ads on the site, which you are viewing can also profile in this way through that site. Not only can they use any patterns in the sites you visit but they will also base tech ads off what kind of computer and operating system you’re using. A person can choose to allow cookies on their browser or not. Some sites require that you allow them in order to visit the site. I allow cookies only from sites that I visit directly. For example, ad networks like Google’s AdSense cannot profile me with cookies through other sites that I visit. I must visit Google or one of its affiliated sites like Gmail for the website to profile my computer. I do think Google is a fair and reliable steward of this information because they did avoid using this method for so long. Since they are doing it in an effort to not only help the return for their advertising clients but also make ads more significant to the user, I think they are fair in using the technology. They also have placed significant power in the hands of the web browser. I have never had any trouble from allowing cookies and I have strong Internet protection software so I feel comfortable in allowing cookies with the web sites I visit often. Google Chrome Google Chrome is a web browser that would be a substitute for Internet Explorer, Firefox, Safari, etc. This new market targets an overall Internet experience for computer users fueled by Google. I, like many others, already rely on a Google task bar in my existing web browser. The next logical step for Google was to create its own browser. They even expanded the market slightly by blurring the line between an Internet user interface and a pc interface. After downloading the browser, one of the start-up tabs highlights a few features that make Google Chrome different from its competitors. They include “One box for everything”, “New Tab page” and “Application shortcuts”. “One box for everything” seems pretty useful. It allows you to use the URL box for search as well. Instead of having a URL box and a Google search box in my browser, there is one that can do both. The “New Tab page” seems to be mostly similar to my current browser in suggesting sites visited most often. One difference is their suggestion for sites recently closed so if you accidentally close out of something it’s fairly simple and quick to return to that page. “Application shortcuts” seems to be exactly what is implied by the name, shortcuts to specified web applications on your desktop, except, according the source cited above, it’s not very useful. Another source, describing some of Google Chrome’s extensions, highlights AdThwart and a PDF/Power Point instant document reader. AdThwart allows you to control pop-up advertisements on the web while the document reader instantly opens PDFs and Power Points in the browser instead of requiring the use of second party software like Adobe. They even have an extension called Chromed Bird that allows an easy, quick connection to Twitter. These extensions are deemed as necessary improvements in order to match the utility of the Firefox add-ons, according to PCMag.com. PCWorld notes that the pros include good performance and ease of use and the one con is that it’s light on features. This is all based on user ratings and reviews and seems to be, at this point in time, an almost necessary trade-off; the more features you add and the more intricate it becomes, the more difficult it will be to use. PCWorld has also offered a bottom line, “Google's streamlined and speedy browser offers strong integrated search and an intriguing alternative to Firefox and Internet Explorer.”