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Google: Past, Present And Future

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Google is best known simply for their widely used search engine. However, this company has become an industry leader, a technological innovator and much, much more. Today, Google is a publicly held corporation whose stock trades for nearly $500 per share and has a market capitalization of nearly $150 billion (Mills, Nov. 2006). That, coupled with their increasing market share in numerous web-based market, means Google truly is the little search engine that could.

Located in Mountain View, CA, the Google corporation was begun as a simple research project by Larry Page and Sergey Brin during their studies at Stanford in early 1996. While attending classes, Page theorized that a search engine that could analyze the relationships between websites, rather than searching meta data or keyword appearances, would be able to produce better results than those using existing technologies. He was certainly on to something. Today, with more than 9,000 employees and more than 200 million search requests per day, Google has become the world's largest and most used search engine, far outpacing its contemporaries such as Yahoo, MSN, AOL and Ask.

When Page and Brin began raising funds for their startup, the biggest challenge that they faced was convincing venture capitalists that their creation would be a viable commodity that could actually turn a profit. Their proposal was to offer text-based advertisement based on user search terms. This idea was in stark contrast to the trend of the day which included garish, animated banner ads which flashed and jumped around the screen. Eight years later, their approach has proven to be a success, taking in nearly $1 billion per year, or roughly 25% of the entire U.S. internet advertising revenue. (Mills, Mar. 2006). At the heart of their ad business is Google AdWords, a self-service advertising product that allows its clients to specify keywords that will trigger their ads, as well as the maximum amount they are willing to pay for each click. Google then displays these "sponsored links" along the top and right side of the screen. Placement on a page is prioritized by bids placed by advertisers.

With nearly 60% of search terms displaying ads and click-through rates around 12%, more than 10 times that of average banner ads, Google is dominating the search-term based advertising market. (McHugh, 2004) In fact, AdWords was such a huge success that Google began offering a way for other websites to display these ads as well. The new program, called AdSense, allows any website to act as an ad host for AdWords advertisements. When a user clicks on one of these ads, Google pays a portion of the price bid by the advertiser to the website's owner, thus allowing Google to host ads on virtually any website.

Google continues to evolve. Today, Google is a blogger site, a desktop search engine, an email client, a mapping directory, an online photo manager and organizer, a VoIP service, and a 3D sketcher. It is even a verb which was recently added to both The Oxford English Dictionary as well as the Merriam Webster Dictionary with the meaning, "to use the Google search engine to obtain information on the World Wide Web" (

Google's expansion into these new markets began in 2001 with the acquisition of several small web-based companies including Pyra Labs, creators of "Blogger", a web log host, and more recently, YouTube, a free video sharing website. Google's innovations have not only come from acquisitions and mergers; in fact, most of their most popular products were built in-house. Google allows its engineers to spend up to 20% of their time working on projects that interest them and has led to the development of such well-known services as Gmail, Froogle, Orkut, Google Maps, and Search by Location. By allowing such freedoms, Google is able to keep a fresh supply of new products and services to offer to its users and has actually been responsible for nearly half of all new product launches. Google also provides Google Labs, a website that allows users to beta test their new products before they are put into production. Currently they have twenty items available for testing, ranging from Google Reader, a web-based feed reader to keep track of your favorite web sites, to Google Mars which allows users to view detailed maps of Mars.

There are several success factors that Google has to consider when designing a new service or product. To begin with, for websites like Froogle, Google must make sure that wide selections of products are listed from a variety of distributors. By doing so, they offer the users the ability to find the product they are looking for at the best price available and allow them to discern which store offers the best value. With features such as seller rating and filter searches based on numerous criteria, such as manufacturers, price, and stores, they provide relevant data that is easy to decipher. They must also provide this information quickly, efficiently and securely and have up to date data.

One of Google's most recent and bold initiatives was the creation of Google Checkout, a streamlined, safe and convenient online payment processing service aimed towards simplifying the online payment process for retailers and purchasers. By using this service, users can store their credit card and shipping information in their Google account and use it to make and track purchases at participating stores. Online retailers are able to integrate Google Checkout into their existing websites as an alternative payment processing method to existing checkout and credit card processing systems. Merchants who use this new system pay a processing and transaction fee for every purchase; however, these fees are less than those normally charged by credit card companies. As an incentive to these retailers, and also a way to further increase their advertising



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