Abstract

This case discusses the different businesses that Google is operating in and its strategy in foraying into them. Google started off as on online search engine in 1998 and within a span of 5 years, became the market leader in search services due to the speed and relevance of the search results that it delivered. Its fundamental business model was to make revenue out of the contextual paid ads that were displayed with the search results. By October 2011, Google’s share of the desktop search market and wireless search market, globally, was 82.4% and 91.1% respectively. It had also branched out into other online services like web hosting (YouTube, Google Maps, etc.), enterprise services (Google Docs and Cloud computing), communication services like Gmail, social networking (Orkut, Google+), mobile operating software (Android), and mobile phone design and sales (Nexus One). But this growth came at the cost of its reputation as the company drew criticism for violating users’ privacy by hawking details of their web usage patterns to advertisers, for turning a blind eye to copyright issues as in the case of Google Books, and for playing the bully by manipulating its search results to benefit its own services and stifle the competition. It not only had to deal with formidable rivals such as Microsoft, Facebook, and Apple, but also had to face scrutiny from antitrust authorities in the US and Europe for allegedly abusing its leadership position. Google ruffled many feathers when, in August 2011, it acquired the mobile device manufacturer Motorola Mobility Holdings Inc. Through this acquisition, Google morphed into a full-fledged device maker. The acquisition left many wondering whether Google had bitten off more than it could chew. This case is meant for MBA students as a part of the Managing Networked Businesses/ Corporate Strategy/ Strategic Management/ Corporate Ethics curriculum.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The case will help the students:
• Understand various issues and challenges in managing networked businesses.
• Discuss the strategies that companies need to follow in building market shares without compromising on their financial performance.
• Understand the pitfalls that companies need to avoid to not become victims of their own success.
• Elucidate the specific strategies that Internet companies need to follow, operating as they are in a field notorious for technological obsolescence.

Keywords

Managing Networked Businesses, Corporate Strategy, Growth, Market leadership, Market dominance, Google's Statement of Philosophy, Dual class equity structure, Innovation, Disruptive technologies, Privacy, Anti-trust, Online search market, Web services, Software, Pay-per-click, Click-through-rate, Enterprise services, Social networking, Mobile operating software, Motorola Mobility, Google, Facebook, Microsoft, Apple