Describe googles core products and business modelthe

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Describe Google's core products and business model—the basis upon which the firm makes money. Analyze the dual strategy that Google employs to execute its business model. Google’s business generated 95% of its revenues from advertising in 2012 (Google, 2012: n.d). Google provides the information to its internet users for free but the revenues are generated by targeting advertisers who are interested in reaching the online users through their advertisements and the company’s Adwords is a self-serve auction based advertising program and the advertisements appear near the search results and most of the advertiser pay for it on a cost per click basis (BMIMATTERS, 2012: Mar. 29). Through its Adsense program, Google advertises through its Google Network members who in return get a share of revenues and the
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advertisements are featured in the form of videos, text, images and interactive advertisements and the displays may appear on youtube, Google Finance and Google network websites (BMIMATTERS, 2012: Mar. 29). Besides search, Google has developed its Android based mobile phone operating system and developers can create applications for the mobile devices using it (BMIMATTERS, 2012: Mar. 29). Google is serving the enterprise market using hosted web-based applications such as Gmail, Google docs, Google calendar and Google sites (BMIMATTERS, 2012: Mar. 29). Google has its own web browser Chrome and is working with various Original Equipment Manufacturers (OEMs) to install chrome in their computer systems (BMIMATTERS, 2012: Mar. 29). The company has developed global sales and support infrastructure and a support team that will help Google Network members and advertisers generate maximum value out of its offerings (BMIMATTERS, 2012: Mar. 29). The costs of the company can be divided into four broad categories: R&D, Data Center operations, Traffic Acquisitions and Sales & Marketing (BMIMATTERS, 2012: Mar. 29). Google also ventured into hardware by developing Google Nexus 7 tablets and smartphones which the company is continuously upgrading (Geron, 2012: June 27). Although Google Search is still the core product of Google with its Gmail chat, Google Talk and its Adsense business, the company has been blamed of polluting its search engine with its own inferior products such as Google Plus and the company is promoting its own other products on Google search (Honan, 2012: Mar. 22). Google is explaining its core product not as Google search but it is actually Google which is larger master (Honan, 2012: Mar. 22).
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Google adopted the 70-20-10 Strategy which means that 70% engineering resources would be devoted to its core products, 20% to extending the core to the related areas and 10% to fringe areas. Although this strategy has been used but its core product is not Google search, it is broader than that with other businesses being Google Android and Google Nexus. Though the company has been quite successful in certain applications and its major portion of advertising the Nexus 7 Phone is facing stiff competition from Apple and Samsung and the company only commanded 0.9% of the market share (Chitika, 2012: Dec. 6) and although the company is growing strongly
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  • Winter '12
  • drchang
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