Google - A Saga of Innovation

            

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




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Google and Gmail Contd...

This move by Google has had an impact on even some of the Indian players like rediffmail.com, sify.com and indiatimes.com and they had to increase the storage space for their email users. Since its launch, Google has further increased the free space in Gmail to 2GB. As Mr. Gaurav Chadha, Business Manager - NIIT (Knowledge Solutions Business), says, "The most obvious differentiator that Google is building in its email services is space maximization. And the reaction from its main competitor - Yahoo - testifies to the trend of growing hunger for space.

Yahoo has now increased the free space to 1GB per account." Yahoo had to increase the space to 1GB from 250MB and Hotmail announced that it would be offering its clients highly secured anti-virus email services, which would of course be charged. One of the major differences between Gmail and its competitors lies in placing of ads. Most service providers place ads so that every time the user opens inbox, (s)he needs to read them. But, Google has taken enough care to avoid forgetful experiences for the users. Gmail does place ads which scroll on the right side of the screen, but they are relevant to the text in the mail. This way, Google has made inroads in the email service market also and is racing ahead for the top position alongside Yahoo.

Opportunities for Google

Google has been generating enough revenue from its Ad Words, Ad Sense and Gmail service. It is even gaining from ads appearing in Gmail. Its IPO has been successful (Refer Exhibit IV) and that is good news for the company as well as the investors. Recent reports suggest that Google wants to increase the storage space in Gmail from 2GB to 10GB. Once this happens, the competitors Yahoo and Hotmail will be left in a quandary.

They are already struggling to keep pace with the fast and vast Gmail. That will further diminish their power in the market. Also, the space will allow users of Gmail to store millions of messages and retrieve them from any part of the world. In the years to come, Google can expand its business horizon by developing its own operating system, thus challenging Microsoft's top position in the global software market.

Exhibit IV
Rising Stock Price

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