Can The Goliath of Internet Search Be Slain?
Who would have predicted that seven years ago two friends with an idea and a little ambition, working in a garage, would one day revolutionize internet search advertising? Then again, looking back on the personal computing industry and how it got started, we could ask the same. Once again this shows us just how much possibility is yet to be discovered in personal computing.
Just six letters, one simple word, with tremendous value, is becoming one of the most recognized trademarks on the internet. Google, founded by two college friends - Larry Page and Sergey Brin from Stanford University - has succeeded in becoming the world's number one search engine and in just a few years.
Toping its biggest rivals, Yahoo, MSN, and Ask Jeeves and even making an enemy or two along the way, the 'zero-tolerance' software corporation Microsoft, Affinity Engines, and Advanced Internet Technologies - to name a few - Google has made quite a name for itself in such a short time.
Now the multi-billion dollar enterprise has got a swarm of internet users, marketing analysts and entrepreneurs asking 'how did they manage to do it?'
One thing we do know about Google is that it tends to be very secretive about its business. Google was recently presented with a subpoena from the U.S. Justice Department, in 2006, to turn over information on Internet searches in coordination with law-enforcement (as a part of the government's crackdown on terror). This, of course, enraged certain privacy activists. Google went to court and fought the subpoena. Other internet search engine companies such as Yahoo, MSN, and AOL complied with the same subpoena, making statements that there were no privacy issues concerned in the matter. However, to the public's great surprise, Google's case for not disclosing information about their searches was not on the grounds of privacy. Instead the company claims that disclosing this information would jeopardize its trade-secrets.
Google is under a microscope, to every marketing expert and competitor, right now. It poses a great threat to the market in which it operates. What is more intriguing, however, is that the market poses a great threat to it. Google literally owns the Internet search advertising industry profiting from 70% of its total output. Yet its greatest strength is, ironically, also its greatest vulnerability.
Internet marketing is no easy task, let alone offline marketing. Google, on the other hand, has made this process increasingly simple. With the bulk of Google's paid ads coming from direct marketers (as apposed to branded marketing) it's managed to generate a rapid-fire quality advertising floor to a rather dynamic audience. This has opened up numerous opportunities for internet marketers around the world. Still, Google has very little expertise in the areas of branded marketing as well as displayed advertising. This gives its competitors more edge.
Officials from Microsoft have admittedly stated that they did in-fact underestimate Google and they are already underway in launching a 'counter attack'. This type of no-nonsense attitude is exactly what technology initiative companies like Google seem to invoke from Microsoft.
Yes, Google has succeeded at generating more advertising revenues than experts thought possible, but that does not mean it can't fall. What's alarming to some analysts is that 99% of Google's revenues come directly from its paid advertising program. That means only 1% of its revenues are generated from other meager products - such as the Google Pack. This puts the company in a very dangerous situation, because surely its Pay-Per-Click (PPC) advertising program will only grow so far before it reaches a slump. With law suits barging in the company's front door and tensions rising, there is good reason to suspect such notions.
The suits at Google are failing to show focus, another reason for analysts to raise suspicions on the company's future success. While Google's website and search technology has remained optimum - in its simplicity meets power approach - the top level executives have failed at defining the company's strategic mission. What's somewhat reassuring though is that the folks at Google seem to be quite aware of this fact.
Google makes its mission statement short and to the point - as they do with pretty much everything. Their overall mission is to organize the world's information and make it universally accessible and useful - as stated on their website. How they plan on doing this and by what means, however, remains unclear.
Some people think Google merely struck oil and can't determine where to invest their money for future growth. Or perhaps that's what they would like us to think? We have to remember that Google is under a watchful eye and there is a lot at stake for this company. One wrong move and it could be Google's last click.
Maybe that's why Google retains this stealthy cautious approach in its marketing tactics. It is important to understand, however, that Google is indeed shifting its aims as a services organization and beginning to search for profit maximizing solutions other than its dominant search advertising. For instance, they have invested in a number of growing companies such as dMarc, Dodgeball, and Current Communications Group LLC. Not to mention the recent purchase of YouTube by Google for a hefty $1.65 billion.
Over the years Google has also launched various beta products such as Google Mail, Google Talk, Google Video, Google Earth, Google Maps, and Froogle. Its Google Labs are throwing random new ideas at Googlers all the time.
When Google first released its toolbar in 2000 people were skeptical. Soon the Google Pack made one small, but critical, step for the company's future. Simply getting these products on your desktop was enough of a threat to Microsoft that they rallied to build a search engine (that will supposedly compete with Google Search and Google Desktop) directly into the core of their next-generation operating system, Windows Vista.
So it appears that Google, while still in a premature stage of development, is heading in the right direction. With experts predicting growth in the market of up to 41% by next year, investors can rest assured that their stocks aren't going to plunge anytime soon - if at all.
Google has proven itself as a very profitable and lucrative business. Though, it is yet to adapt its distinct vision to the changing environment and continue to build from its core with an effectiveness and efficiency that will meet the competition.

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