Google - A Saga of Innovation

Authors

Authors: S.Ramakrishna & Sanjib Dutta,
Research Associate, Senior Faculty Member,
ICMR (IBS Center for Management Research).

Links

Free Resources,
Articles,
Book Reviews,
Interviews

Tools

<< Previous

Revenue Model

While most search engine companies spent a lot of money on marketing to build their brands, Google, focused solely on building a 'better' search engine. Google's popularity among Internet surfers was mainly because of its superior search technology. Sergey said, "We developed our approach to search technology to address the very real challenge of finding information on the Internet.

Everything we do - from the development of our advanced technology to the design of our user interface - is focused on delivering the best search experience on the web. We are delighted with the response we have received from Google users around the world who have enthusiastically embraced our approach to search."

The main force driving traffic to the Google website was the Word-of-mouth recommendation. Within three years of its launch, Google was answering more than 200 million searches a day. With traffic increasing constantly, Google realized that it could develop its business around two revenue streams: online advertising programs and search services. Half of Google's revenues came from the two main search services it provided to its clients: 'Google WebSearch' and 'Google SiteSearch.'

Google and Gmail

Having improved its reputation as the most reliable and useful search engine, Google went a step further by launching Gmail, its web based email service. According to Page, the basic reason behind launching email service was a Google user's complaint about the services being offered by the existing email service providers. Page and Brin discussed the same with their employees and started working on it. Finally, on 1st April 2004, Google launched Gmail, with a massive storage space of 1Giga Byte (GB) in the offering.

There are three major features in Gmail. Firstly, it is a search based service which means that a user can search for information in the mail he received or sent. Secondly, the storage space of 1GB ensures that the users can store any number of messages for a long time and they need not delete any of those. The third feature is the speed at which Gmail works. Through Gmail, users can enjoy a faster and more efficient service. A Gmail user need not store the messages in separate folders as all the mails corresponded are grouped into a conversation.

This feature is helpful when a user wants to relocate the information he received or sent in a particular mail. Moreover, users of Gmail are assured of privacy for their mails. Speaking about Gmail, Page, said, "Gmail solves all of my communication needs. It's fast and easy and has all the storage I need. And I can use it from anywhere. I love it!"

With the launch of Gmail, Google has posed a serious threat for the global players like Yahoo, Hotmail. Yahoo, which was offering a free space of 6 MB for its email users, was left with no other option but to increase the storage space to 250 MB. Hotmail, which had by then started to offer only paid service to its email users, couldn't make a comeback with free space.

Next >>