GOOGLE 2010
Note: the concept of envelopment is critical to this case. Platform providers that serve different markets frequently have similar components and overlapping user bases. By leveraging these common components and shared user relationships one platform provider can enter another’s market, offering a bundle that includes both platforms’ functions. The targeted platform providers is vulnerable to a share loss because it cannot match the attacker’s offer
Examples: Microsoft’s Windows Media Player vs. Real Networks.
This case encourages you to analyze two envelopment attacks Google could pursue:
1) software: one approach targets Microsoft’s licensed software products – Office, Exchange, Windows, with ad-supported Internet-enabled software. To match Google’s advertising/software bundle and fend off this attack, Microsoft has entered the paid search business with Bing
2) e-Commerce - -this focuses on eBay and bundles Google’s search, listing, and payment processing services. Ebay is vulnerable because it does not own a major search engine.
Assignment questions:
1) What were the key factors behind Google’s early success?
2) Was their success based on having a late-mover advantage vs. first mover advantage? How can you tell?
3) Do you expect the search business to become more concentrated (i.e. dominated by fewer firms)? Is search a winner-take-all business?
4) In renewing its deal with AOL, could Google afford to pay more than 100% of the revenue generated from AOL searches? How did Microsoft’s maximum affordable bid for AOL’s search traffic compare to Google’s? Run the numbers to show your answer.
5) In addition to enhancing its core search businesses, should Google also branch out into new arenas? Which of the following would you recommend:
a. Building a full fledged portal like Yahoo’s
b. Targeting Microsoft’s desktop software hegemony
c. Becoming an e-commerce intermediary like eBay?
d. How would you rank these?
6) Do you view Google’s distinctive governance structure, corporate culture, and organizational processes as strengths or potential limitations?
Attachment:- 529405_2_Google-2010.pdf
Attachment:- 529405_1_Google-2008.pdf