Google

Google Inc. is an American multinational public corporation. Based on its internet search and advertising technologies, Google develops its business and generates profit chiefly from its AdWords advertising program. This essay will study the business strategies of Google as a world’s leading searching engine company and how it shape its business to gain competitive advantages among competitors in the market. As information systems playing a critical part in delivering Google’s search engine business, the quality of the search information determines its business success. Later in this essay, we will discuss the features of Google’s AdWords known as the main advertising product and main source of revenue of Google. 1. Using Porter’s competitive forces model, analyze Google and its business strategy. [pic] 1. Rivalry among competitive firms Rivalry among competing firms is the most powerful of the five competitive forces. This force describes the intensity of competition between existing companies in an industry. High competitive pressure lead to pressure on prices, margins, and hence, on profitability for every single player in the industry. Although Google is the gateway to the internet for hundreds of millions of users worldwide，we cannot make sure Google always be the one and only dominated superior to other companies . Like yahoo，some portals offer more services and solutions with frequently-used search than Google do. Google would start loosing its users owing to added lure in such portals；MSN is coming up with its new operating system called “Longhorn” which would have “implicit query” characteristic. 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 eventually it would impair Google’s market；Overture has been Google’s old rival. Though Google has acquitted more advertisers than Overture, Google’s share of market revenue falls behind overture by 20% and there is always competition to get collaborated with distinguished mass-market portals like Yahoo，MSN and AOL. 2. Potential entry of new competitors The rivalry among competing firm increase as the number of competitors increases, as competitors more equal in size and capability, as demand for the company products decline, products are undifferentiated, product prices decline, consumer brand switching cost is less, number of supplier available for raw material, low price substitute products are available and entry into market is easy due to less constraints. Provided search tools are easily scalable ，and there is no such thing as the impeccable search engine， thus a better search engine created by another competitor will critically affect Google. To illustrate ，Yahoo & Microsoft have radically improved their search engines and can deploy their search tool through their products. Despite that online marketing and the rules governing what is good and bad practices (e.g. cloaking) are still evolving，which could affect Google’s current technology and philosophy，Google still has overwhelming force on those new competitors. 3. Potential development of substitute products Because switching costs are negligible，the threat of substitutes is high. Users of the search tool are demanding more services and complexity or sophistication with the search tool to remain ‘loyal’ to its use. Buyers’preference to substitutes is primarily driven by accuracy and speed of the result and also by the overt pushing of ads that are included with the search results and pages. 4. Bargaining power of suppliers In the united states，Google is the unquestionable market leader，with an estimated 48 percent of all internet searches in 2006，over rival Yahoo. But as for other countries ，such as in china and some Asian countries，Google’s domination isn’t that clear. Moreover，some critics recently argue that Google is regionally not globally dominant anymore ，or never was。We must admit Google faces a serious threat of forward integration，considering Google search may not perform as well with new software releases from Microsoft and Apple. 5. Bargaining power of consumers The bargaining power of customers determines how much customers can impose pressure on margins and volumes. Competitors offer discounts, warranty and services to switch the consumer from one brand to another in same industry. The bargaining power of consumers is also more when products are undifferentiated and widely available. In this case consumer can ask for more discounts, extended warranty and services. As the satisfaction level of consumer goes up more the intensity level of competition increases. Google should monitor the competitors’ strategies and also take care of consumers’likes and dislikes by maintaining good liaison. 2. What strategies has Google developed to deal with competitive forces' “The perfect search engine,” says co-founder Larry Page, “would understand exactly what you mean and give back exactly what you want”. Google designs a new Internet browser or a new tweak to the look of the homepage, they take great care to ensure that they will ultimately serve users. Their homepage interface is clear and simple, and pages load instantly，and advertising is not only clearly marked as such, it offers relevant content and is not distracting. Their dedication to improving search helps us apply what we‘ve learned to new products, like Gmail and Google Maps. By shaving excess bits and bytes and increasing efficiency, Google has broken their own speed records many times over, so that the average response time on a search result is a fraction of a second. They keep speed in mind with each new product we release, whether it’s a mobile application or Google Chrome, a browser designed to be fast enough for the modern web. Google search works because it relies on the millions of individuals posting links on websites to help determine which other sites offer content of value. They assess the importance of every web page using more than 200 signals and a variety of techniques, which analyzes which sites have been “voted” to be the best sources of information by other pages across the web. Another reason Google will maintain its market share lead over its competitors is its spending on research and development， and its annual growth rate for R&D spending is higher than its two main rivals, Yahoo! and MSN. [pic] The revenue they generate is derived from offering search technology to companies and from the sale of advertising displayed on our site and on other sites across the web. Hundreds of thousands of advertisers worldwide use AdWords to promote their products; hundreds of thousands of publishers take advantage of AdSense program to deliver ads relevant to their site content. Looking globally, Google search (AdWords) and Google affiliates (AdSense) together receive 66 percent of worldwide paid search ad revenues in 2006. Search and affiliates for Yahoo! trail with a 28 percent share, while MSN and all the other search engines get by with only a 5 percent combined share. [pic] Precisely，Google has recently launched a reporting feature called Search Funnel, which will track user search history and click patterns before they click on certain ads. This data is made available to advertisers to give them insights about user search behavior and help them to improve their advertising strategy for maximizing conversion rates. 3. Review the five common characteristics of high-quality information and rank them in order of importance to Google’s business. Five characteristics of high quality information are accuracy, completeness, consistency, uniqueness, and timeliness.  Information needs to be of high quality to be useful and accurate. For example，is the name spelled correctly？Is the dollar amount recorded properly？The information that is accessed is deemed reliable.  Flaws do arise with database design but do not let something in your control, accurate and reliable data, be one of them.  Completeness is another attribute of high quality information. For example，is the address complete including street ，city ，state and postcode？Partial information may as well be incomplete information because it is only a small part of the picture.  Completeness is as necessary as accuracy when inputting data into a database. Consistency is key when entering information into a database.  For example, is aggregate or summary information in agreement with detailed information. Uniqueness is the fourth component of high quality information.  In order to add value to any organization, information must be unique and distinctive.  Information is a very essential part of any organization and if used properly can make a company competitive or can keep a company competitive.  A fifth important aspect of information is timeliness. Real-time information is an element of timeliness. As far as I am concerned, timeliness is the most imperative factor for Google. Because current data is more valuable to organizations than old outdated information.  Especially now, in this era of high technological advances, out-of-date information can keep a company from achieving their goals or from surviving in a competitive arena. The second place is accuracy and completeness，the information that is input into a data base is presumed to be perfect as well as accurate.  Consistency， uniqueness follows. 4. Identify five consequences/ramifications to Google’s business if the search information it presented to its customers was of low quality. Management can no longer afford the luxury of the excessive costs of non-quality data. For organizations like Google，in a competitive environment, data quality is a matter of survival and then of competitive advantage. Bad information can cause serious business ramifications： 1. Inability to accurately track customers, which directly affects strategic initiatives. 2. Difficulty identifying valuable customers. 3. Inability to identify selling opportunities and wasted revenue from marketing to nonexistent customers and non-deliverable mail. 4. Difficulty tracking revenue due to inaccurate invoices. 5. Inability to build strong customer relationships，which would increase buyer power. There is and must be only one purpose for improving data quality: to improve customer and stakeholder satisfaction by increasing the efficiency and effectiveness of the business processes. Data quality is a business concern, and data quality improvement is a business issue. If the data warehouse does not deliver reliable information that supports the customers' decisions and strategic processes to their satisfaction, Google couldn’t stand up in the first place. 5. What is a Relational Database – provide a definition and explain how a relational database works. Define what is meant by Entity; Attribute; Key/s and Relationship. Why would Google choose to use a relational database' A Relational Database is a database constituting a set of relations (usually erroneously referred to as “tables”), in other words, stores information in the form of logically related two dimensional tables. The relational model specifies that the tuples of a relation have no specific order and that the tuples, in turn, impose no order on the attributes. Applications access data by specifying queries, which use operations such as select to identify tuples, project to identify attributes, and join to combine relations. Relations can be modified using the insert, delete, and update operators. New tuples can supply explicit values or be derived from a query. Similarly, queries identify tuples for updating or deleting. It is necessary for each tuple of a relation to be uniquely identifiable by some combination (one or more) of its attribute values. An entity in the relational database model is a person, place, thing, transaction, or event about which information is stored. The rows in each table contain the entities. An attribute also called a field or column，is characteristics or properties of an entity class. Primary keys and foreign keys identify the various entities in the database. Primary key is a field that uniquely identifies a given entity in a table；Foreign key is a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables. Google choose to use a relational database due to： 1. Increased flexibility Databases provide flexibility in allowing each user to access the information in whatever way best suits his or her needs. A well‐designed database should handle changes quickly and easily，provide users with different views，and have only one physical view. 2. Increased scalability and performance A database must scale to meet increased demand, while maintaining acceptable performance levels，scalability refers to how well a system can adapt to increased demands，while performance measures how quickly a system performs a certain process or transaction. 3. Reduced information redundancy Redundancy means the duplication of information or storing the same information in multiple places，inconsistency is one of the primary problems with redundant information. 4. Increased information integrity (quality) Within a database environment，integrity constraints are rules that help ensure the quality of information ，the database ensures that users can never violate these constraints. 5. Increased information security Information is an organisational asset and must be protected. Google builds an interface on top of a relational database that provides various levels of privacy options. For example, lower-level employees can be restricted from seeing the data available to management. In another example, some databases can be locked away from others to ensure that not all information is recalled when accessing a record. This is good news for companies handling sensitive information, such as credit card numbers and personal notes. As recently Google faces some lawsuits，which argue its scanning and digitising of library bookstore constitutes a massive copyright infringement, security become a more important issue for reduce controversy. 6. Google’s AdWords uses a relational database; identify the different types of Entities; Attributes; Keys and Relationships that might be stored in Google’s AdWords relational database. Rational database model is a type of database which stores information into logically related two-dimensional tables. In Google’s AdWords relational database, entities, attributes and keys could be as follows: Entities: Advertisement title; Search term; Word; Location; Web page; Sponsor Attributes for Advertisement title: Title; Keywords; Product or service description; Expiry Date Search term: Search item ID; Keywords; category; Website location ID; traffic estimates Word: Keywords; Language ID; Category Location: keywords; Geographic location; Website location ID; Website address Web page: Company name; Sponsor name; Website address; Total hits Sponsor: Sponsor ID; Sponsor name; Company name; Contact number; bidding price Each table would need to define a primary key as: Advertisement ID; Search item ID; Location ID; Company ID; Sponsor ID According to those entities, attributes and keys in Google’s AdWords relational database, when users are searching some particular product or service by putting keywords into Google search engine, the keywords will link the search term to the advertisement title. So, the keywords create a logical relationship between the ‘advertisement table’ and ‘search term table’. By creating logical 1-to-1 relationship, 1-to-many relationship, and also many-to-many relationship in the database, Google’s AdWords eventually connect potential customers to advertisers. 7. What is a data warehouse' What is a data mart' Identify a data mart that Google’s sales and marketing department might use to track and analyse its AdWords Revenue. A data warehouse is a central repository of data uploaded from enterprise’s operational systems. And by integrating and cataloguing raw data, the data warehouse makes the raw data available for knowledge users in terms of analyzing and managing purpose. A data mart is an aggregation of data that may or may not derive from data warehouse. And the main focus of data mart is to ease of usability and access for knowledge users with particular purpose. The data mart that Google uses to identify its AdWords revenue: Pay-per-click advertisement (PPC) is one data mart that Google uses to track its AdWords revenue. According to the definition on the Wikipedia Website (April 2011), ‘Pay-per-click’ is an Internet advertising model leading traffic to advertisement websites by utilizing keywords, which are selected by advertisers. And advertisers will bid on the maximum amount they would like to pay for every link click. Based on those bids, Google will then decide a price and a search order for those keywords appearing at the right side of the search-results page or above the search results (Google AdWords Website 2010). In this case, ads with higher bidding price will be displayed on top of the ‘Sponsored links’ when users search one of those keywords or relevant words. In addition, by calculating the click-through rate of those keywords, Google could track its AdWords revenue using the formula ‘click-though rate х price for per click’. Thus, by knowing the click-though rate of each category keywords, Google would understand what areas the public is interested in. And also, by generating the information of the bids from advertisers, Google will figure out who would like to pay more for the advertisement keywords. Then, Google could offer those advertisers more profitable services. Conclusion Although Google is the gateway to the internet for hundreds of millions of users worldwide，we cannot make sure Google always be the one and only dominated superior to other companies. To deal with competitive forces, Google develops a series of strategies combined with Porter’s competitive forces model，such as designs a new Internet browser or a new tweak to the look of the homepage, which take great care to ensure that they will ultimately serve users. Beyond that，Google takes advantage of high-quality information and relational database to improve customer and stakeholder satisfaction. Also, by introducing and developing AdWords business into the information technology, Google successfully sells its ‘words’ for a lot fortune. In the meanwhile, AdWords makes both advertisers and customers better off by linking product and service demands and supplies in the data warehouse. All in all, Google will increasing require alternative channels to maintain its spectacular business growth. Bibliography http://www.wikipedia.org/ Google Adwords Website 2010, Google Inc., USA, viewed 28 April 2011, http://adwords.google.com/ Google Adwords Help Center, retrieved 18 February 2010, Google Inc., USA, viewed 28 April 2011, http://adwords.google.com/support/aw/'hl=en Competitive forces model, http://www.themanager.org/Models/p5f.htm Porter, Michael E., “Competitive strategy: techniques for analyzing industries and competitors”, 1st Free Press Edition, New York: Free Press, 1998. Larry English, “The High Costs of Low-Quality Data”, Information Management Magazine, January 1998. What are the 5 characteristics of useful information and give at least example of each characteristic'http://wiki.answers.com/Q/What_are_the_5_characteristics_of_useful_information_and_giv e_at_least_example_of_each_characteristics#ixzz1L4dkzhHF Willis Wee, “Google’s Strategy in Asia”, Business Tech, February 21, 2011.