{"id":226,"date":"2018-06-14T19:04:59","date_gmt":"2018-06-14T19:04:59","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch14\/"},"modified":"2026-02-17T19:23:14","modified_gmt":"2026-02-17T19:23:14","slug":"ch14","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch14\/","title":{"raw":"14.1 Introduction","rendered":"14.1 Introduction"},"content":{"raw":"
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Learning Objectives<\/span><\/p>\r\n\r\n<\/header>\r\n

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After studying this section you should be able to do the following:<\/p>\r\n\r\n

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  1. Understand the extent of Google\u2019s rapid rise and its size and influence when compared with others in the media industry.<\/li>\r\n \t
  2. Recognize the shift away from traditional advertising media to Internet advertising.<\/li>\r\n \t
  3. Gain insight into the uniqueness and appeal of Google\u2019s corporate culture.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

    Google has been called a one-trick pony (Li, 2009), but as tricks go, it\u2019s got an exquisite one. Google\u2019s \u201ctrick\u201d is matchmaking\u2014pairing Internet surfers with advertisers and taking a cut along the way. This cut is substantial\u2014about $23 billion in 2009. In fact, as Wired<\/em>\u2019s Steve Levy puts it, Google\u2019s matchmaking capabilities may represent \u201cthe most successful business idea in history\u201d (Levy, 2009). For perspective, consider that as a ten-year-old firm, and one that had been public for less than five years, Google had already grown to earn more annual advertising dollars than any<\/em> U.S. media company. No television network, no magazine group, no newspaper chain brings in more ad bucks than Google. And none is more profitable. While Google\u2019s stated mission is \u201cto organize the world\u2019s information and make it universally accessible and useful,\u201d advertising drives profits and lets the firm offer most of its services for free.<\/p>\r\n\r\n

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    Figure 14.1<\/span> U.S. Advertising Spending (by selected media)<\/p>\r\n

    \r\n\"Online\r\n<\/a><\/p>\r\n

    Online advertising represents the only advertising category trending with positive growth. Figures for 2009 and beyond are estimates.<\/p>\r\n\r\n

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    Data retrieved via eMarketer.com.<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n

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    Figure 14.2<\/span> U.S. Online Ad Spending (by format)<\/p>\r\n

    \r\n\"Search\r\n<\/a><\/p>\r\n

    Search captures the most online ad dollars, and Google dominates search advertising. Figures for 2009 and beyond are estimates.<\/p>\r\n\r\n

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    Data retrieved via eMarketer.com.<\/p>\r\n\r\n<\/div>\r\n<\/div>\r\n

    As more people spend more time online, advertisers are shifting spending away from old channels to the Internet; and Google is swallowing the lion\u2019s share of this funds transfer (Pontin, 2009). By some estimates Google has 76 percent of the search advertising business (Sherman, 2009). Add to that Google\u2019s lucrative AdSense network that serves ads to sites ranging from small time bloggers to the New York Times<\/em>, plus markets served by Google\u2019s acquisition of display ad leader DoubleClick, and the firm controls in the neighborhood of 70 percent of all<\/em> online advertising dollars (Baker, 2008). Google has the world\u2019s strongest brand (Rao, 2009) (its name is a verb\u2014just Google it<\/em>). It is regularly voted among the best firms to work for in America (twice topping Fortune<\/em>\u2019s list). While rivals continue to innovate (see Note 14.85 \u201cSearch: Google Rules, but It Ain\u2019t Over\u201d) through Q1 2009, Google continues to dominate the search market.<\/p>\r\n\r\n

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    Figure 14.3<\/span> U.S. Search Market Share (Volume of Searches, March 2010)1<\/sup><\/p>\r\n

    \r\n\"U.S.\r\n<\/a><\/p>\r\n\r\n<\/div>\r\n

    Wall Street has rewarded this success. The firm\u2019s market capitalization (market cap)<\/a><\/span>, the value of the firm calculated by multiplying its share price by the number of shares, makes Google the most valuable media company on the planet. By early 2009, Google\u2019s market cap was greater than that of News Corp (which includes Fox, MySpace, and the Wall Street Journal<\/em>), Disney (including ABC, ESPN, theme parks, and Pixar), Time Warner (Fortune<\/em>, Time<\/em>, Sports Illustrated<\/em>, CNN, and Warner Bros.), Viacom (MTV, VH1, and Nickelodeon), CBS, and the New York Times<\/em>\u2014combined! Not bad for a business started by two twenty-something computer science graduate students. By 2007 that duo, Sergey Brin and Larry Page, were billionaires, tying for fifth on the Forbes<\/em> 400 list of wealthiest Americans.<\/p>\r\n\r\n

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    Genius Geeks and Plum Perks<\/h4>\r\n

    Brin and Page have built a talent magnet. At the Googleplex, the firm\u2019s Mountain View, California headquarters, geeks are lavished with perks that include on-site laundry, massage, carwash, bicycle repair, free haircuts, state of the art gyms, and Wi-Fi<\/a><\/span> equipped shuttles that ferry employees between Silicon Valley and the San Francisco Bay area. The Googleplex is also pretty green. The facility gets 30 percent of its energy from solar cells, representing the largest corporate installation of its kind (Weldon, 2007).<\/p>\r\n

    The firm\u2019s quirky tech-centric culture is evident everywhere. A T-Rex skeleton looms near the volleyball court. Hanging from the lobby ceiling is a replica of SpaceShipOne, the first commercial space vehicle. And visitors to the bathroom will find \u201ctesting on the toilet,\u201d coding problems or other brainteasers to keep gray matter humming while seated on one of the firm\u2019s $800 remote-controlled Japanese commodes. Staff also enjoy an A-list lecture series attracting luminaries ranging from celebrities to heads of state.<\/p>\r\n

    And of course there\u2019s the food\u2014all of it free. The firm\u2019s founders felt that no employee should be more than 100 feet away from nourishment, and a tour around Google offices will find espresso bars, snack nooks, and fully stocked beverage refrigerators galore. There are eleven gourmet cafeterias on-site, the most famous being \u201cCharlie\u2019s Place,\u201d first run by the former executive chef for the Grateful Dead.<\/p>\r\n

    CEO Eric Schmidt says the goal of all this is \u201cto strip away everything that gets in our employees\u2019 way\u201d (Wolgemuth, 2008). And the perks, culture, and sense of mission have allowed the firm to assemble one of the most impressive rosters of technical talent anywhere. The Googleplex is like a well-fed Manhattan project, and employee ranks include a gaggle of geniuses that helped invent critical technologies such as the Macintosh user interface, the python programming language, the XML standard, and even the protocols that underlie the Internet itself.<\/p>\r\n

    Engineers find Google a particularly attractive place to work, in part due to a corporate policy of offering \u201c20 percent time,\u201d the ability to work the equivalent of one day a week on new projects that interest them. It\u2019s a policy that has fueled innovation. Google Vice President Marissa Mayer (who herself regularly ranks among Fortune<\/em>\u2019s most powerful women in business) has stated that roughly half of Google products got their start in 20 percent time (Casnocha, 2009).<\/p>\r\n\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

    Studying Google gives us an idea of how quickly technology-fueled market disruptions can happen, and how deeply these disruptions penetrate various industries. We\u2019ll also study the underlying technologies that power search, online advertising, and customer profiling. We\u2019ll explore issues of strategy, privacy, fraud, and discuss other opportunities and challenges the firm faces going forward.<\/p>\r\n\r\n

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    Key Takeaways<\/span><\/p>\r\n\r\n<\/header>\r\n

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