Google Business Model
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Palaniappan N
Jul 30, 2013, 2:54:50 PM7/30/13
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why the Google Business Model is a winning Business Model?
The answer is a complex one, and involves more factors. It's a mix of smart decisions, excellent marketing strategy, great advisors, highly innovative and risky business model, and great products.
These are the key resons why the Google Business Model won:
1.- Google had - and still has - a simple, clean, clear, minimalistic user interface. no frills, just the logo and the search box - easy and fast to load. And this was a key feature with the slow internet connections of the early years 1999 -2001 - while Yahoo and most of the other search engines were more like generalistic portals, full of confusion, full of useless features and useless links, full of annoying banner ads, heavy and slow to load.
Google had a clear understanding on psychology of perception, and how the interaction eye/brain works, while the bigger competitors didn't.
Bottom line is: If the user visits a search engine, what he wants to get is simply that: just a search engine.
A search engine which is fast and reliable. If the user wants a generalistic portal, he goes to a portal, not to a search engine.
Larry Page and Sergey Brin, the Google Executives, understood this, and this was what they delivered. And made their users happy.
2.- Google had - and has - reliable search results (not always, but most of the time). Page and Brin's PageRank algorithm worked well.
3.- Google got good advice from VC's and from Wilson Sonsini Goodrich & Rosati. Larry Page and Sergey Brin have been advised and assisted since the beginning by John Doerr, VC Partner of Kleiner Perkins and by Wilson Sonsini Goodrich & Rosati, the leading law firm of Silicon Valley.
Insight on Google Business Model
4.- Google introduced a smart, innovative and quite risky business model - Adwords - and the pay per click concept. The risk proved winning, and the innovative business model worked. Still today Adwords is the main source of revenues of Google Inc.
5.- In the following years, Google became a powerhouse with an impressive pipeline of new great products - Google Maps, Google Earth, Google Video, Gmail. And slim revenues.
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Palaniappan.N
The answer is a complex one, and involves more factors. It's a mix of smart decisions, excellent marketing strategy, great advisors, highly innovative and risky business model, and great products.
These are the key resons why the Google Business Model won:
1.- Google had - and still has - a simple, clean, clear, minimalistic user interface. no frills, just the logo and the search box - easy and fast to load. And this was a key feature with the slow internet connections of the early years 1999 -2001 - while Yahoo and most of the other search engines were more like generalistic portals, full of confusion, full of useless features and useless links, full of annoying banner ads, heavy and slow to load.
Google had a clear understanding on psychology of perception, and how the interaction eye/brain works, while the bigger competitors didn't.
Bottom line is: If the user visits a search engine, what he wants to get is simply that: just a search engine.
A search engine which is fast and reliable. If the user wants a generalistic portal, he goes to a portal, not to a search engine.
Larry Page and Sergey Brin, the Google Executives, understood this, and this was what they delivered. And made their users happy.
2.- Google had - and has - reliable search results (not always, but most of the time). Page and Brin's PageRank algorithm worked well.
3.- Google got good advice from VC's and from Wilson Sonsini Goodrich & Rosati. Larry Page and Sergey Brin have been advised and assisted since the beginning by John Doerr, VC Partner of Kleiner Perkins and by Wilson Sonsini Goodrich & Rosati, the leading law firm of Silicon Valley.
Insight on Google Business Model
4.- Google introduced a smart, innovative and quite risky business model - Adwords - and the pay per click concept. The risk proved winning, and the innovative business model worked. Still today Adwords is the main source of revenues of Google Inc.
5.- In the following years, Google became a powerhouse with an impressive pipeline of new great products - Google Maps, Google Earth, Google Video, Gmail. And slim revenues.
6.- Google worked very hard on Brand Building. It seems that brand building was much more important to them than just revenues and profits. The strategy worked. And it was a key asset in the subsequent IPO at the Nasdaq.
7 - Google was an innovator of the Business Model. Google delivered all these great new products basically for free, enticing and luring million of users worldwide, with the result of building the Brand in an outstanding, quite unbelievable way - and did it so fast.
Eric Schmidt was made CEO of the company, David Drummond, an attorney of Wilson Sonsini Goodrich & Rosati who had advised Google founders since the early days, joined Google as Chief Legal Officer, Wilson Sonsini Goodrich & Rosati took care of the IPO at Nasdaq.
At the IPO in August 2004 Google share price was set at $85, which to many financial analysts seemed eccessive and unreasonable. In nov. 2007 Google shares had topped $700.
And in nov. 2007 Google stock market capitalization reached $230 billion, while annual revenues reached $16 billion and profits $4 billion.
An excellent return for Google shareholders
7 - Google was an innovator of the Business Model. Google delivered all these great new products basically for free, enticing and luring million of users worldwide, with the result of building the Brand in an outstanding, quite unbelievable way - and did it so fast.
Eric Schmidt was made CEO of the company, David Drummond, an attorney of Wilson Sonsini Goodrich & Rosati who had advised Google founders since the early days, joined Google as Chief Legal Officer, Wilson Sonsini Goodrich & Rosati took care of the IPO at Nasdaq.
At the IPO in August 2004 Google share price was set at $85, which to many financial analysts seemed eccessive and unreasonable. In nov. 2007 Google shares had topped $700.
And in nov. 2007 Google stock market capitalization reached $230 billion, while annual revenues reached $16 billion and profits $4 billion.
An excellent return for Google shareholders
Palaniappan.N
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