Vi) Google
Google's first breakthrough was
"...To solve the problem of how to find information online. It introduced the concept of search finding at a time where everything online was put in separate categories......how to connect customers with products through a unique advertising auction system, which gave preference to the ad that most users visit..."
Tony Boyd 2018a
Historically Google has given free access to Google Docs, Android phone software, YouTube, Chrome, etc.
Google helped destroy the traditional newspaper business model, ie using revenue from advertising to fund the journalism
. Google daily processes more than a petabyte of data (this is around 100 times the printed material in the US Library of Congress)
. Google+ (540m.+ registered users; 300m. users joined in its first 2 years)
. It is the world's number 1 search engine & advertising company
. There are 1b. gmail accounts
. Google has spent US$ 21b. on its data centres (2014)
· With the changing dynamics in digital marketing - there is a swing away from desktop to mobile as the fastest growing area of digital advertising. Search is around half of mobile ad spending (2014) but these ads have less impact than targeted social media ads. As a result Google has been losing market share to the likes of Facebook, ie Google market share is falling below 40%. Facebook, which has a higher ad market share on mobiles than on desktop has seen its click-through rate triple since 2013.Also, other players are getting into mobile advertising like
i) Snapchat (a popular photo -paysharing app is launching ads that post photos with comments that disappear after 10 seconds: eliminates the risk that potential embarrassing posts will return to haunt you later in life; with no advertising, but very heavy user engagement like word-of-mouth, referrals, etc, it experienced rapid growth in a couple of years, eg from 50 m. snaps per day in December 2012 to 150 m. per day in April 2013 to 200 m. per day in June 2013 This is a quadrupling of the user base in 6 months!!!)
ii) Yahoo! is trying to boost its mobile and offerings with its acquisition of Flurry
Other activities include
i) owns YouTube which has 1/5 of US digital video ad revenue; attracts 1 b. users monthly; its music videos are very popular (2014) (see below)
ii) Android internet software (from mobile phones to tablets, home appliances, watches, automobiles, health monitoring, TV, etc). By using the android system, Google ran an open source software approach, ie anybody in the world, including smart phone manufacturers like Samsung, BlackBerry, etc, could use the android software and tailor it to their own particular needs. This was different to Apple with its iOS system only operating on Apple-made hardware. The development of android and iOS destroyed Microsoft's near monopoly in operating systems in a mere 5 years, with people adopting mobile computing more than 3 times faster than they did a desktop. It took around 15 years for Microsoft to dominate the desktop market from the 1980s. 2013 marked the worst decline in global PC shipments in history, ie 7 quarters of declining revenue
iii) Google wallet (collecting customer transaction data & replacing credit cards for purchases via smart phones), etc. It creates the marketplace where consumers and merchants are brought together on a single information platform covering shopping, inventory, delivery planning and payments. Google does not own the delivery infrastructure; instead, it pays courier companies to pick up items from stores such as Target Wholefood, organise the items and deliver them. Stores pay Google a commission on each sale. For Google model is asset light but it does not have complete control over costs and execution, like Amazon has.
iv) Waze (a real time, reliable way to report and share traffic information); after a few years they have 30 m. worldwide users; have developed their own unique mapping technology; Google paid US $ 1.1 b. in 2013
v) Driverless cars
vi) Uber (on-line, non-licensed car booking services) (see more in this volume)
vii) Skybox Imaging (satellite operator & fibre-optic cabling connection including submarine cable linking Asia to the US)
viii) Robotics
ix) Cardboard viewer (device that allows viewer to see virtual reality via app)
Google's parent company (Alphabet) is worth around US $ 560 b. (late 2016)
It is obsessive about innovation. Google realises that organisations that have experienced success are at risk of losing their innovative edge, ie
"...as soon as you have something to protect, your mind starts going there, if you are not very careful, instead of continuing to imagine the future..."
Michael Smith 2016
Part of innovation is failure. Google fails frequently but prefers micro fails, not catastrophic failures. Micro fails are important as there is much learning, ie
"...we learn and we change and we optimise..."
Jason Pellegrino as quoted by Mike Smith 2016
Even though Google allows staff to work on their own projects for around 20% of their time, there are constraints like
- quarterly evaluations of an employee's work plan against the company's overall goals (these are incredibly disciplined and robust work-plan discussions to ensure that everybody is working in the right direction and is delivering; embracing failure and taking risks is acceptable to achieve these goals in (the work plans
- human resource department (called People Operation) is treated like an engineering department as it generates extraordinary amounts of data to understand how to optimise culture and the organisation's performance.
Google has had huge successes: Google maps, Google photos and Gmail, plus its search engine that made the company the world's largest advertising business. On the other hand, Google has product failures like Google glass and Google plus.
Its products are continually evolving, like Google maps has gone from being a driving-focused tool to helping people navigate through buildings.
Google is exploring new areas like content production for its YouTube and Google News.
Additional problem facing Google is the small amount of tax it pays.
Some problems facing Google (2017) include
- anti-trust investigations, eg EU fine of US$ 3+b (2017)
- the small amount of tax it pays, eg Ireland
- search revenue falling, eg 13 to 8%
- losing market share to rivals like Baidu & Microsoft
- revenue from desktop search still exceeds mobile search
- increased capital expenditure, eg from US$ 3.3b (2012) to US$ 11b. (2014)
- Bias - even though there is concern about Google's potential for bias against political parties, etc., the larger concern is the bias against people who do not hold power in society like women, minorities, etc. For example, the use of gender bias in words like "he", "himself", etc, rather than "she", "herself", etc.
"...long-standing structural bias in society was replicated on the Web, which was reflected in Google's algorithms......and who knows how long, unknown to anyone at Google..."
Farhad Manjoo, 2018
Associated with these potential flaws is that Google's algorithms favour recency and activity. This means that the platform is vulnerable to being manipulated in favour of misinformation and rumour in the aftermath of a major news event. Regulators in Europe have fined Google for search bias and there are similar claims in America.
From 2017 to mid-2019, Google was fined 3 times for a total of around $US 9 b.
Also,
"...The question is whether Google can build a business outside of advertising, which accounts for roughly 85% of its revenue..."
Daisuke Wakabayayashi 2019
Some areas Google is looking at include Google Cloud, Waymo (self-driving cars), Loon (a service to provide cellular connectivity using balloons)
Google's experience in China
"...Google withdrew from China eight years ago to protest against the country's censorship and online hacking. Now the Internet giant is working on a censored search engine for China that will filter websites and search terms that are blacklisted by the Chinese government..."
Li Yuan et al 2018
This is the latest example of how American tech companies are trying to tailor their products to enter the massive Chinese market - even if it means restricting free speech.
Other examples include LinkedIn, Facebook, etc restricting posts, information, etc in order to not offend the Chinese authorities.
The lure of this massive market has resulted in Google announcing in June 2018 a US$ 550m. investment in the Chinese online retailer, JD.com And it plans to open a research centre in China focusing on AI intelligence.
With Google's absence in the Chinese market, competitors such as Baidu (China's dominant search engine) have filled the space
NB "...in the first half of 2018, China's national Internet regulator shut down or revoked the licences of more than 3000 websites..."
Li Yuan et al 2018
In summary
Google was initially founded with a mission of organising all knowledge and this has been broadened to include driverless cars, manufacture of phones, aging, personal assistant, etc