Google: A Strategic Move

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Google Inc.: A Strategic Move


Sergey Brin and Larry Page met in spring 1995 at a gathering in Stanford University. Between January 1996 and December 1997, they created "BackRub", the precursor of Google search engine. The objective was to better organize and huge amount of data on the Internet. Eventually the name was changed to "Google" to signify the immense amount of information that resided on the Internet. Google is transformed from the word googol, referring to 1 followed by 100 zeros.

Brin and Page incorporated Google in 1998, just nine years ago, with $1 million dollars from family and investors. The quality of Google's search technology attracted a growing amount of users. Many companies had Google as its main web search engine. It took the company till 2001 to be profitable because of its great financial performance. From there they sold 19.6 million shares from which they raised $1.7 billion dollars.

Today, Google has continued to expand from being a Web search company to offering an increasing array of services. It has now over 50% share of the total search market. In 2005 Google incorporated "Google Payment Corp." as he is working on a PayPal-like payment system. They have very recently released a Web-only video search engine that allows users to view videos without entering the host's site. It has been rumored also that Google plans to compete more directly with Microsoft in Internet browsing and operating systems.

(Source: Fred David's Strategic Management 11th ed. Page 34-35)

Summary of a Strategy

Google is a single-product-line business of search engine technology. In order to compete with other huge companies such as Microsoft and Yahoo, Google has to develop a strategy for different...

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.... There were many other ways Google could have gone. One alternative was to create another corporation, part of the Google group, to work with other kinds of unrelated or related products and another corporation for marketing consulting. Google is very good at marketing, they began selling ads, so having a marketing consulting agency could be a good way to go. For that they already have the experience and it doesn't involve as much money. Perhaps that would be a choice for the future; I believe that Google made a right choice with this strategy.




• Fred R. David's Strategic Management Pg. 34 – 48 Cohesion Case.


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