Indian Institute of Management Ahmedabad

A report on study of organizational life cycle of Google Inc.

In partial fulfilment of the requirements of the course

Organizational Dynamics
On

22/10/2008
By

Group-12 Section A

Introduction
Google Inc. is an American public corporation, earning revenue from advertising related to its Internet search, e-mail, online mapping, office productivity, social networking, and video sharing services as well as selling advertising-free versions of the same technologies. The Google headquarters, the Googleplex, is located in Mountain View, California. As of 30 June 2008 the company has 19,604 full-time employees. The annual revenue for 2007 was $16.6 billion. The company is listed on the NASDAQ stock exchange under the ticker symbol GOOG and under the London Stock Exchange under the ticker symbol GGEA.

Growth Through Creativity (1996-1999)

Google began as a research project in January 1996 by Larry Page and Sergey Brin, two Ph.D. students at Stanford University, California. They hypothesized that a search engine that analyzed the relationships between websites would produce better results than existing techniques, which essentially ranked results according to the number of times the search term appeared on a page. Originally the search engine used the Stanford University website with the domain google.stanford.edu. Google is now an American Public Corporation specializing in Internet searching and online advertising. The domain google.com was registered on September 14, 1997, and the company was incorporated as Google Inc. on September 7, 1998 at a friend's garage in Menlo Park, California. In August 1998 Sun co-founder Andy Bechtolsheim provides the first funding of $100,000. Also in June 1999 Google got a funding of $25 million from Sequoia Capital and Kleiner Perkins. It was also during this stage that Google grew from 2 employees to 40 employees. Google moved to a new office at Mountain View Location: 2400 E. Bayshore. Mountain View is a few miles south of Stanford University, and north of the older towns of Silicon Valley: Sunnyvale, Santa Clara, San Jose.

Structure There was hardly any formal structure in place as Page and Brin and his coterie of few hires set about creating new products and services. The passion and dedication exemplified by the 40 odd staff rebuffed the need of any hierarchy among the employees.

Innovation The key to Googles success has always been its underlying technology called PageRank--a unique algorithm formula originally developed by Page and Brin that sorts results according to their perceived importance. Products and Services They developed a internet search engine that analyzed the relationships between websites would produce better results than existing techniques, which essentially ranked results according to the number of times the search term appeared on a page and hence provided the end user better and more contextual results. Goal Google's mission was to organize the world's information and make it universally accessible and useful and to become The Perfect Search Engine for the consumers. Reward system Google offered ten reasons to work for Google, including cool technology, stock options, free snacks and drinks, and the proposition that millions of people "will use and appreciate your software." The Crisis With no concrete revenue model it was hard for Google to find the funding for its initial development and maintenance stage.

Growth Through Direction (2000-2002)

Google was perfectly positioned to pounce when the Internet stock bubble burst in 2000, prompting firings and bankruptcies all around Silicon Valley but not at Google. For a healthy, growing start-up, the timing could not have been better. The pair found themselves atop one of the only firms hiring amid the market crash that destroyed legions of public technology companies. As a private enterprise immune to the poison from Wall Street, Google now had access to outstanding software engineers and mathematicians who suddenly found themselves unemployed or holding a pile of worthless stock options. The pool of talent presented a one-time opportunity to add enormous brainpower and depth to Google that would have been impossible under normal business conditions.

While many of its biggest competitors in the search engine field were in dire financial straits, with no hope of recovery, Google moved to a larger headquarters in Mountain View. With its search engine, Google had a best-of-breed product, a source of revenue through advertising, and a potent brand that conveyed not just excellence but a sense of fun and integrity too. The company also had the people and technology to scale up rapidly on all fronts, from computer infrastructure to ad sales and support staff to new product offerings. The company's most valuable online real estate remained unspoiled by ads of any sort, so it could load more quickly. Search results pages also loaded swiftly, since Google stuck to showing only targeted text ads, not bandwidth-hogging multimedia spots Structure Google hired Silicon Valley veteran Wayne Rosing as the first VP of engineering operations. They opened first international office, in Tokyo. Eric Schmidt became the CEO of Google. Larry and Sergey were named presidents of products and technology, respectively. He directed the company to increase its revenues from outside of North America which comprises of 60% of search requests. Products & Services The first 10 language versions of Google.com are released: French, German, Italian, Swedish, Finnish, Spanish, Portuguese, Dutch, Norwegian, Chinese, Japanese, Korea and Danish. Google Ad Words launches with 350 customers. The self-service ad program promises online activation with a credit card, keyword targeting and performance feedback. Google Toolbar is released. It's a browser plug-in that makes it possible to search without visiting the Google homepage. Google launched an extraordinary new feature that would revolutionize many aspects of Internet usage over time. Called Google Image Search, the service included millions of photographs and other graphics available with the click of a mouse. The first Google hardware is released: it's a yellow box called the Google Search Appliance that businesses can plug into their computer network to enable search capabilities for their own documents.

The company embarked on a mission to push its business and brand out to Internet users, rather than waiting for users to come to the Google.com homepage. In its new program, publishers of news, shopping, and other Web sites could sign up to add a Google search box to their own sites, giving their users access to Google search while earning money for the referrals. It was a change in trajectory that had plenty of upside for both Google and Web publishers of all sizes. Suddenly, Web sitesfirst in the U.S. and soon thereafter anywhere in the worldcould enhance their offerings with high-quality search and be paid for it rather than having to pony up. This new approach was to give Google unprecedented contact with millions of Internet users and Web site owners around the world. It would also boost exposure of the brand name at the very moment that its competitors were fading from view. On June 26, 2000, Google took a giant leap toward universal recognition by inking a pact with Yahoo to provide the Internet powerhouse with Googlegenerated search results. The deal vastly expanded its presence and profile on the Web, exposing it to millions of additional users daily. As one of the oldest, best known, and busiest sites on the Internet, Yahoo was an important customer, and its decision to make Google its new behind-the-scenes search provider, in place of incumbent and rival Inktomi, had important ramifications for the young company's future prospects. Yahoo officials said they chose Google for an array of reasons related to its search expertise and its focus on giving end users more comprehensive results.

Goal To provide users with the most complete and relevant information. Google hoped that its prosperity and ingenuity would be applied to solving major world problems. They aspired to make Google an institution that makes the world a better place.

Innovation Google had a rule that software engineers spend at least 20 percent of their time, or one day a week, working on whatever projects interested them. The 20 percent rule was a way of encouraging innovation, and Google saw this as essential to establishing and maintaining the right culture and creating a place where bright technologists would want to work and be motivated to come up with breakthrough ideas.

Google Ad Words launches with 350 customers. The self-service ad program promises online activation with a credit card, keyword targeting and performance feedback. Reward System Google's revenue might not be growing rapidly, but its employee brainpower was. Instead of paying these engineers big salaries, Google offered them mediocre pay and thousands of stock options that might prove valuable someday if the company prospered. Challenges Sustaining the growth and competing with Microsoft were one of the challenges faced by Google. IN doing so, Google wanted to acquire AOL business against both Inktomi, which provided search results, and Overture, which provided the search-related ads, was not as easy as gaining Case's loyalty as a Google searcher. The only way to get AOL to switch, it appeared during hardfought negotiations, was to provide it with a very large financial guarantee, running to many millions of dollars. In exchange, Google would take over both search and search-related advertising on America Online and share revenue. AOL also demanded stock options as part of the deal.

Growth Through Coordination (2003-2008)

Around the world, businessmen, investors, and their lawyers would consider themselves fools to do a deal without googling the other party. Authors writing books, including this one, find facts and files fast using Google. High-ranking government officials use it to find documents themselves instead of asking aides to track them down. When scientists attack certain vexing problems, they Google the genetic code to discover relationships they didn't know existed. Teenagers eager to know the words to a popular song simply Google it. Accomplished chefs and hungry hacks with leftovers in the refrigerator Google the ingredients to figure out what meal to whip up quickly. CIA agents use Google to track terrorist groups. Software engineers turn to Google to answer computing questions instead of opening a book or asking a colleague. Patients Google their ailments. Employees Google their bosses. Athletes Google their competition. And globe-

trotters and armchair travellers alike use Google to learn about far-off destinations without ever leaving home. Structure In Feb,2003 Google acquires Pyra Labs, the creators of Blogger. In March, 2004 Google formalize the enterprise unit with the hire of Dave Girouard as general manager. Google went public with share. In February, 2006 Dr. 19,605,052 shares of Class A common stock Larry Brilliant becomes the executive takes place on Wall Street on August 18, 2004 with an opening price: $85 per director of Google.org. In October, 2004 Google opens an office in Dublin, Ireland, with 150 multilingual Googlers.

Products & Services

Google launched Google Grants, our in-kind advertising program for nonprofit organizations to run in-kind ad campaigns for their cause. Google launched Google Print (which later becomes Google Book Search), indexing small excerpts from books to appear in search results. Google launched Orkut as a way for us to tap into the sphere of social networking. Google Desktop Search is introduced: users can now search for files and documents stored on their own hard drive using Google technology.

Google introduces Google Local, offering relevant neighbourhood business listings, maps, and directions. Google launches Google Maps with features such as satellite views and directions. Google launches Google Earth: a satellite imagery-based mapping service combining 3D buildings and terrain with mapping capabilities and Google search.

Google launches

Google Talk, a downloadable Windows application that

enables Gmail users to talk or IM with friends quickly and easily talk using a computer microphone and speaker (no phone required) for free.

Google new open source browser chrome. T-Mobile announces the G1, the first phone built on the Android operating system Google acquired Youtube.com

Goal Google's mission statement is simply to bring the world's information and knowledge to each and every person's fingertips. It believes that its greatest productivity and accomplishment is a user's full accessibility to the world around him. Google runs a unique and exceptional work atmosphere, from its constant technological advances to its friendly work environment; Google's future seems limitless. Sergey Brin and Larry Page would like to see Google and other firms achieve in the future is the production of affordable, clean-burning fuel that does not harm the environment. Innovation To foster innovation, Google created "Founders Awards," multimillion-dollar stock awards to be presented regularly to small teams of people that developed the best new ideas. Big money like that was unheard of at most companies, and its goal, he said, was to retain brilliant innovators who might otherwise leave, taking their ideas with them. Google started working on Open-source software during this stage. Google also ventured into the mobile domain during this stage. Future Google is continuously working on innovative range of products and services which will help us in witnessing some magnificent services in near future some of being a real-time taxicab locator, TV search and Google Mars.

(Greiners Model of Organizational Growth)

SWOT ANALYSIS
Strengths Google is king of search-related advertising, and search-related ads are the fastest growing sector of the online ad business, which is growing at 41% annually Google earned $16 billion in online ad revenues in 2007 Google's market cap, now hovering at around $132 billion, is bigger than IBM and Chevron. Unlike high-flying Internet bubble companies of the 1990s, Google is profitable, with revenues growing an average 110% quarterly since it went public in August 2004. Google has a war chest of $7.6 billion for doing whatever it pleases.

Weakness Too dependant on search based advertising.99 percent of its revenues come from search-related advertising. The remaining 1 percent comes from sales of its enterprise search appliance. Lack of focus: Spreading too thin Stymied by its own success: Whether they like it or not, they are a media company," said Allen Weiner, an analyst at Gartner. "What they provide is very valuable aspects of media, all wrapped up in search. But they're missing the internal talent and internal capability to think like a media company. Everything is from a technology perspective, and that is a real shortcoming." Opportunities Display advertising Real-time cab locator Google Mars and variety of other products

Threat Legal trials Competition from Yahoo, MSN (Ad Centre) Click fraud

Eroding public perception: Fear about collecting search habits, Federal lawsuit

REFERENCES
http://www.google.com/intl/en/corporate/history.html http://investor.google.com/board.html http://www.google.com/intl/en/corporate/execs.html http://en.wikipedia.org/wiki/Google http://www.oppapers.com/ The Google Story David A Wise