GOOGLE INC.

Google Inc.

[Professor Name]

Table of Contents

Introduction2

PART 1: Products and Services2

Industry Performance and Relevant Issues5

PART 2: Strategic Goals of Google6

Industry Factors and Competition8

PART 3: Computation of Financial Ratios12

Analysis of Financial Performance13

PART 4: Recommendations17

Conclusion18

Works Cited19

Google Inc.

Introduction

Google is the major player in the online search industry, with a market share of nearly 65%, based on percentage of search traffic. Google's founders, Sergey Brin and Larry Page, developed the core search algorithm while attending graduate school at Stanford University; Google's core search algorithm assesses relevancy by looking at how often a given web page is referred to from elsewhere on the internet (Girard, 47). Google has maintained its technological lead by consistently improving its search results, though most of these details are not available to the public (Ghemawat, 21). 

PART 1: Products and Services

Google offers a wide range of free services that include: web search; image, video, music and literature search; e-mail (Gmail); Google News; a shopping search; mapping services; a satellite imagery service (Google Earth) and many more. Google prides itself on its product and technological innovation, spending about 13% of revenue on R&D (Lowe, 56). Google generates income through advertising from AdWords, which is an auction-based advertising program that enables targeted advertisements to be delivered across Google sites and the Google network (Lowe, 61).

AdWords enables advertisers to present ads to internet users based on their search queries. Advertisements are ranked for display based on a combination of maximum cost per click set by the advertisers and other relevant factors. AdWords allows for campaign management and keyword targeting (Adler, 8). It also has a traffic estimator, budgetary delivery, performance reports and multiple payment options. AdWords Discounter automatically adjusts pricing so that advertisers never pay more than one cent over the next highest bidder. For larger advertisers it offers creative services, vertical market experts, bulk posting, dedicated client service representatives and AdWords API (Application Program Interface) (Slater, 239).

The substantial cash flow that Google generates has allowed it to purchase popular internet properties such as YouTube. Management has decreed that they will not pay dividends in the foreseeable future and rather than sitting on piles of cash, the company has focused on boosting its return on capital employed by making acquisitions. Google initially had significant difficulties monetizing YouTube's traffic, leading many shareholders to question the wisdom of the acquisition (IBIS World, 2011a). In 2009, Google introduced in-video advertising and sponsored videos to YouTube; detailed figures on that particular sites' profitability are not available (IBIS World, 2011a). Major products and services that are currently being offered by Google to customers of diverse segments are listed below.

Advertising Category:

Google Search

AdWords

AdSense program

Google Mobile

Google Display

Google Local

Google Tags

Mobile advertising

Videos, text, images, and other interactive ads

Google Places

Google Boost

Search Category:

An enormous catalog of websites and supplementary online content

Operating systems and platforms:

Google Chrome OS and Google Chrome

Google Books

Google TV

Android

Enterprise Category:

Google Apps (such as Google Docs, Gmail, Google Calendar, Google Sites, etc.)

Google Site Search (custom search engine)

Google Maps Application Programming Interface

Google Search Appliance (real-time search of business applications, intranet applications, and public websites)

Google Checkout

Google ...