econ presentation v2

8/7/2019 Econ presentation v2

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Arin GharibianGenevieve DeLong

Mark Atia

Maxim LevkovPhyllis Park

Vadim Kornilov


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G o o g l e s H i s t o r y C o m p a n y

B a c k g r o u n d

P o l i t i c a l / L e g a lS o c i a l / C u l t u r a lD e m o g r a p h i c

T e c h n o l o g i c a lE c o n o m i c

M a c r o -E n v i r o n m e n t

F o r c e s

P r o d u c tP r i c eP r o m o t i o nP l a c e

M a r k e t i n gS t r a t e g y

G o o g l e F o r T h e F u t u r eC o n c l u s i o n


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Political /Legal

Social /Cultural

DemographicTechnological

Economic


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GOOGLE, INC.I think Google should be like a Swiss Army knife: clean,

simple, the tool you want to take everywhere

- Marissa Mayer, Vice President of Search Products andUser Experience at Google*

*Adapted from, The Google Way by Bernard Girard

P o l i t i c a l / L e g a l


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Political (e.g. posting of falsified information,solicitation of votes, public opinion)

Policy (e.g. access to information)

Social (e.g. children's use)

Legal (e.g. copyright, intellectual property)

Technical (e.g. security, privacy)



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Net neutrality, private enterprises' act against government's attempt to impose controlover various aspects Internet information 'highway'.

Solicitation of votes

Proliferation of information

Purposeful dissemination of falsified information

Open information banks, such as Wikipedia and Wikileaks are regarded as sources ofauthorative and credible detail, despite lack of accuracy and conformity.


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Digitization unleashes availability of information to the public withlittle to no control from the owner.

Convergence of Internet to the public good in early 1990's wasintended to fundamentally remove it from the governmental funding

into private sector to allow it stand on its own feet.

Free for all, does not mean free of all laws

Google and the Internet takes the industry by the storm andthreatens the very fundamentals of copyright and intellectual

property laws.

Threats on laws that are enacted to protect against intrusion onprivacy and security.


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Massive digitization of books with little to no regard to the copyright aspect of works and inconsequence redefining the copyright laws.

Guarding against individual privacy, yet releasing products that expose privacy in direct violation ofprivacy laws. Google Buzz, Google Maps, and other simular products.

Youtube video enables availability of media to masses in controversial political situations, while settingagenda for the rest of the broadcast media. Such as acts of war-in the middle east or nature-in thepacific rim, by being immediately available for consumption. Thus making broadcast media difficult tohide truth and adding accuracy prospective to the disseminated information.

Further expansion of Internet, puts Google at the burden of compliance to variety of complicatedpolitical and legal matters.


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Sensitivity to the laws of copyright ininternational market place. Some countries

prohibit explicit availability of intellectualproperty or copyrighted works to the publicor commercial use without owner'spermission. Thus, pushing Google into lawsuits.


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S o c i a l / C u l t u r a l


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D e m o g r a p h i c


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T e c h n o l o g i c a l


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E c o n o m i c


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Considering that Google is most closelyrelated to the online advertising industry withtheir AdSense and AdWords programs, we will

now consider how this industry is influenced bycurrent economic trends and market dynamics.

Advertising revenues made up 99% of our revenues in 2006 and 2007and 97% of our revenues in 2008. We derive most of our additionalrevenues from offering internet ad serving and management services toadvertisers and ad agencies, the license of our web search technologyand the license of our search solutions to enterprises.2 -Google

E c o n o m i c


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These major economic trends display that right now is not the best time formost industries, but the online search engine and advertising industries aredoing better than most, and so is Google...

Unemployment is upand steady at around

10%

Overall consumption is down for

the past 3 years and falling!

This data was taken from another great tool that Google offers forfree: http://www.google.com/trends1

E c o n o m i c


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Google Stocks andfinancials are growing

through the economiccrisis!

Online advertising trendsare steady with slightdecreases from othercompetitors while Googleis gaining the competitive

edge!

The online advertising trends and Google on the other hand are doing very well witheither steady progression or growth through the economic downturn!

Proving that the current economic trends are not affecting Google

or the online advertising industry.

E c o n o m i c


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We consider that almost all the services that Google offers including the free

software and tools as well as the revenue bearing advertising programs canbe classified as having inelastic demand patterns.

The highly innovative softwarethat Google offers to their

users are not only of the latesttechnology, highly effective,and very useful, but mostimportantly they are free!

Google now controls 69% ofonline advertising market after

acquiring DoubleClick.

Considering that Googlesshare of the online advertising

market is so high and theydont seem to want to stopexpanding, people will be

willing to pay top dollar for thehighly technological ad

targeting that Google offers,

which in most cases turns intosales for most advertisers!

Even though Google hasmajor competitors, with theirhigh expansion and growthrates they are positioning

themselves to transition froman oligopoly to a monopolistic

leader of the online search

engine and advertising market!

E c o n o m i c


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P d


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Product

Simple, fast, & intuitive

Receives several hundredmillion queries each daythrough its search engine

Most used search enginein the world

P d t


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Product

Google vs. Bing

Similar product Easy user interface Use comparable algorithms

Google vs. Yahoo

Yahoo restructured website image

after Google dominated searchengine market share.

Transitioned to a social media newswebsite

P d t


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Googles main advertising productand main source of revenue

PPC Pay Per Click

Total advertising revenues were $28billion in 2010

Product

P d t


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Google Health

Google Finance

Google Mobile

Google Cloud

Google Documents

Product

Google wants to be every part of yourdigital life.

P i


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Price

P ti


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Promotion

Sales and marketing expense were around $2 billion in 2008, which wasapproximately 9% of total revenues.2

Sales and marketing expenses which include customer handling, sales, andsupport are growing as Google expands into markets all over the world.

$266.4 million was spent specifically on advertising and promotion which isonly about 1% of total revenues in 2008!2

Google focuses mostly on its brand status, free products, and word of mouthadvertising.

Some of the advertising dollars are spent on the promotion of Adwords andother products to online businesses looking to advertise.

Promotion


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Promotion

The Current and forecasted macro environmental forces willnot considerably affect Googles promotional strategies.

Google is currently putting a lot of focus on global expansion.

It is important for Google to continue growing its own recognition and dominance inother countries.

Google has to be very careful with certain political and social differences that they aresure to encounter in many countries all over the world.

If they keep up with their level of innovation, technological forces will always besomething that they have under control.

Unless online advertisers find a better way to advertise than online, Google shouldkeep its dominant status in the field of online search engine and advertising products.

Place


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Place

Conclusion


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Conclusion