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1. Discuss competition in the search industry. Which of the
five competitive forces seem strongest? Weakest? What is your assessment of
overall industry attractiveness?
2.How is the search industry changing?
What forces seem most likely to bring about major change to the industry within
the next three to five years?
3.What are the key factors that define
success in the industry? What are the key competencies, capabilities, and
resources of successful search engine companies?
4. Describe Google’s
business model. What are the company’s revenue-cost-profit relationships? What
strategies has Google relied upon to build competitive advantage in the
industry?
5. Have Google’s business model and strategy proven to be
successful? Should investors be impressed with the company’s financial
performance? How does the company’s financial performance compare to that of
Microsoft and Yahoo? Please conduct financial analysis to support your position
– you may wish to use the financial ratios presented in Tale 1 of
Chapter 4 as a guide in doing your financial analysis of the company.
6.
What are the company’s key resource strengths and competitive capabilities? What
competitive liabilities and resource weakness does it have? What opportunities
exist? What threats to its continued success are present?
7. What
recommendations would you make to Google’s top-management team to sustain its
competitive advantage in the search industry? How should it best capitalize on
its strategic initiatives in mobile search, cloud computing, and auctioning
system for traditional media ads?
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3.2 Key competencies,
capabilities, and resources
3.2.1 Key competencies and capabilities
Key
Keyword Focused Anchor Text from External Links
Anchor Text is the visible,
clickable text in a hyperlink. In modern browsers, it is usually blue and
underlined
External Link Popularity
The major search engines use many
metrics to determine the value of external links. Some of these metrics
include:
The trustworthiness of the linking domain.
The popularity of the linking page.
The
relevancy of the content between the source page and the target page.
The anchor text used in the link.
The amount of
links to the same page on the source page.
The amount of domains
that link to the target page.
The amount of variations that are
used as anchor text to links to the target page.
The ownership
relationship between the source and target domains.
In addition to these
metrics, external links are important for two main
reasons:
Popularity
Relevancy
Diversity of
Link Sources
Links from many unique root domains
Keyword Use Anywhere
in the Title Tag
A title tag is the main text that describes an online
document. It is the single most important on-page SEO element (behind overall
content) and appears in three key places: Browser, Search Results Page and
External Websites.
Trustworthiness of the Domain Based on Link Distance
from Trusted Domains
3.2.2Resources
Browser Toolbars
Desktop Search Engines
Directory Submission
Services
Hosted Search Service
Online Directory
Scripts
Pay-Per-Click Advertising
Search
Utilities
Search Engine Blogs
Search Engine
Books
Search Engine Discussion Forums
Search
Engine Optimization Firms
Search Engine Optimization Tools
Search Trends
4. Describe Google’s business model.
What are the company’s revenue-cost-profit relationships? What strategies has
Google relied upon to build competitive advantage in the industry?
4.1
Business Model
AdWords and AdSense are important factors to Google to
achieving success of business model. Google’s revenue comes from advertising,
and 50% of advertising revenue comes from AdWords, and the rest comes from
AdSense.
AdWords
Adwords is advertisement model that shows advertisements
related with search result when users search something they want. At this time,
an advertiser pays advertisement charges according to users click frequency, and
such a method is called CPC (Cost per Click). Googles excellent point is to
decide the priority order of advertisement by users degree of interest, and
exclude advertisement that users turn away.
The basic feature of Adwords is
to arrange advertisements related with users search result on the top and right
of the screen, and at this time to clearly state that they are advertisement.
Because Google decide the priority of advertisements by user’s CPC, this system
can be seen very faithful. So Google is able to make immense
profit.
AdSense
Adsense is a service that, by writing adequate
advertisements on general websites, their sysops are given money according to
the frequency of visitors every click. These advertisement model become an
advertisement market which is made by voluntary demands of netizen, so the
territory of advertisement extend to all the websites of the world. By
increasing exposure time of advertisements and automatizing, Adsense offers an
opportunity for advertisements to be changed from waiting advertisements to
advertisements that going to the space where the users exist.
Generally
Adsense was written on the websites or blogs. Google upload advertisements on
adequate space. And the advertisement charges are paid whenever the
advertisements are clicked.
There are two kinds of Adsense. One is Adsense
for contents that Google generally load advertisements on the specific space of
websites, and the other is an Adsense for search that offers search engine. If
users click advertisements through the search tool, Adsense fee is
paid.
4.2 Business Strategy
Google business model is actually from
advertisement. So basic strategy of Google is focused on maximizing the effect
of advertisement. To achieve this goal, a number of visitors and traffic are
needed, so Google provides users variable free services. Google merged many
companies since 2002, and also has developed variable services on its
own.
4.2.1. Dominating Internet Advertising
M&A
Since 1998, Google
has succeeded 63 cases of acquisitions in 12 years and except for search engine,
other services are originated from M&A. Within 63 cases, only 3 fall into
the
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of the five competitive forces seem strongest? Weakest? What
is your assessment of overall industry attractiveness?
1.1 Five Competitive
Forces
Rivalry among existing competitors
: Yahoo, Microsoft
Threats of
substitute products or services
: Skimming in the library, interviewing
experts or asking friends
Bargaining power of Suppliers
: A lot of
websites and it can be replaced and Google has
the |
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