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  • Writer's pictureGreat Companies

Google Business Model

Google is an American multinational technology company specializing in Internet-related services and products. These include online advertising technologies, search, cloud computing, software, and hardware. Google was founded in 1998 by Larry Page and Sergey Brin. Rapid growth since incorporation has triggered a chain of products, acquisitions, and partnerships beyond Google's core search engine(Google Search). It offers services designed for work and productivity (Google Docs, Sheets and Slides), email (Gmail/Inbox), scheduling and time management (Google Calendar), cloud storage (Google Drive), social networking (Google+), instant messaging and video chat (Google Allo/Duo), language translation (Google Translate), mapping and turn-by-turn navigation (Google Maps/Waze), video sharing (YouTube), notetaking (Google Keep), and photo organizing and editing (Google Photos). The company leads the development of the Android mobile operating system, the Google Chrome web browser, and Chrome OS, a lightweight operating system based on the Chrome browser.

How does the model work?

Google’s business model is polyhedral.

This means that everybody sees a different face of the company:

Users: see free searches, free email, free maps, free browser, etc. and pay for some premium services like advanced email and google earth features, cloud services, payment services, etc.

Companies: see website space where to put their ads taking advantage of geolocation, segmentation (specially in Youtube and Google+), etc.

Developers: see a way to monetize their knowledge by means of Android apps in a kind of 2.0 of coding (here is the platform, now fill it with your contribution). Google get IP agreements with mobile OEMs, gets paid to check and use their servers as repository for downloading the apps, etc.

Offline: and lately it is trying to move outside the Web with autonomous cars, working humanoid robots, smartglasses, etc. offered to a general public.

What makes it so special?

There are many reasons for Google’s popularity. The Google homepage is very simple, easy to use, and loads quickly. It provides users with better results than any other search engine and can find a lot of information quickly. Google shows fewer ads on its homepage than its competitors, Bing and Yahoo. The ads Google shows are more related to its users’ interests. Displaying fewer ads gives Google an advantage over Yahoo and Bing because its pages are easier to read. Google is extremely good at ranking sites in order of their relevance to users. It places value on sites that can link to other pages with similar information. The more popular sites that link to your page, the better the chance that your website contains useful information. Other features like google maps, gmail etc are now an integral part of our lives.

Action oriented insights

Google has spent a decade trying to gain relevance in social, going back to its Orkut network in 2004 and including products like Buzz and Friend Connect. But giants like facebook, twitter etc are potential social media competitors that can steal the spotlight. Smartphone users tend not to go to to search for hotels, clothes or gifts. They go to particular apps, meaning there is no central front door to the mobile Web. While Google remains at the middle of mobile computing with Android and popular apps like Maps, YouTube and Gmail, it doesn't control the discovery experience.

Yelp has criticized Google for giving preferential treatment to reviews of restaurants and local businesses on its own service. The European Commission has spent almost four years investigating antitrust-related complaints against the company.

Why is Google faced with a need-to-grow-but-can't-grow conundrum?

Google controls one-third of the global digital ad market and more than 40 percent of the U.S. market, according to eMarketer. In its core online ad business, any increase to its share—certainly via acquisition—will be rigidly scrutinized.

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