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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Challenges

On the face of it, Google may seem invincible. But, Google too has some challenges ahead. Keynote Systems, a company offering e-business management services, in its recent study "Customer Experience Rankings", said that Google topped the list of search engines followed by Yahoo, MSN, Askjeeves and Lycos. It is observed that though Google topped the rating, both Yahoo and MSN have brought significant changes in their operations.

According to Chris Sherman, Associate Editor, Searchenginewatch.com, "Yahoo and MSN both made significant gains in several key areas, largely closing the perception gap with Google". It is implied that Google needs to work towards offering better features than its competitors (it has been doing the same for quite sometime now) so as not to lose loyal search users to the competitors Yahoo and MSN Search. Also, the concept of online advertising is getting hotter day-by-day. While this has been the major revenue source for Google, there are certain points to be remembered. Recently, a company in the US filed a lawsuit against Google saying that Google has illegally put its name under auction as a keyword. Google has to avoid such type of hitches if it has to move up the ladder.

The difference between Google and Yahoo is the revenue factor. Yahoo gets its revenue from Yahoo mail, ads, and some other features where as Google gets almost 85% of its revenue from ads. This, experts feel, will turn out to be a problem for Google as in the next one or two years this ad craze may come down if some other ways of generating revenues come up.

The storage space of 10GB in Gmail is a definitely a cause of concern for competitors. Nevertheless, Google has to check out if it is technically feasible before promising the same to the users. Even if it is feasible, there is no guarantee that this service will not be charged in the coming years once Google realizes that the users are totally hooked to Gmail and they have no place to go. As Mr. Gaurav Chadha opines, "There are no free lunches...get ready to pay for that gig of space you occupy on yahoos and Gmails. The party will end soon! Also, facilities like search, POP etc. will continue to come at a premium." Page and Brin have worked so hard for the success of Google. Now that they are on top, they just can't afford to relax.

Conclusion

In this ever changing competitive world, no company can rest assured of its success. Every company, irrespective of whether it is big or small, has to put continuous efforts to come up with innovative business ideas and thus achieve the ultimate objective of being profitable. So is the case with Google. It was only in 2003 that analysts predicted Google would soon compete with Yahoo for the top slot in the online destination and it turned out to be true. Google came up with innovative ideas like Blogs, Ad Words, video search and many other features on its search engine. Now, Google has to strike the right chord in moving up the ladder. What is it that will elevate Google's status further? What's more in the offering from Google? Let us wait and see.