Strategic Use of Information Technology: Google's Business Model
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This report examines Google's strategic use of information technology, focusing on its business model and market position. It delves into Google's early history, the evolution of search engines, and the competitive landscape of the online search industry. The report analyzes Google's business model, emphasizing its online advertising revenue generation through AdWords. It also explores Google's strategies for maintaining market dominance, including product diversification, acquisitions, and targeted advertising. Furthermore, the report highlights key products and services, such as AdWords and Google Analytics, and discusses Google's expansion into new advertising mediums like radio and print. Overall, the report provides a comprehensive analysis of Google's strategic IT implementations and its impact on its business success.
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UC Irvine
I.T. in Business
Title
Strategic Use of Information Technology - Google
Permalink
https://escholarship.org/uc/item/0nj460xn
Authors
Chen, Rex
Lam, Oisze
Kraemer, Kenneth
Publication Date
2007-02-01
eScholarship.org Powered by the California Digital Library
University of California
I.T. in Business
Title
Strategic Use of Information Technology - Google
Permalink
https://escholarship.org/uc/item/0nj460xn
Authors
Chen, Rex
Lam, Oisze
Kraemer, Kenneth
Publication Date
2007-02-01
eScholarship.org Powered by the California Digital Library
University of California
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2
INTRODUCTION
Arguably the most popular search engine available today, Google is widely known for its
unparalleled search engine technology, embodied in the web page ranking algorithm, PageRank i
and running on an efficient distributed computer system. In fact, the verb “to Google” has
ingrained itself in the vernacular as a synonym of “[performing] a web search.”1 The key to
Google’s success has been its strategic use of both software and hardware information
technologies. The IT infrastructure behind the search engine includes huge storage databases
and numerous server farms to produce significant computational processing power. These
critical IT components are distributed across multiple independent computers that provide
parallel computing resources. This architecture has allowed Google’s business to reach a market
capital over $100 billion and become one of the most respected and admirable companies in the
world.
MARKET ENVIRONMENTS
Search Engine
Internet search engines were first developed in the early 1990s to facilitate the sharing of
information among researchers. The original effort to develop a tool for information search
occurred simultaneously across multiple universities is shown in Table 1. Although
functionalities of these systems were very limited, they provided the foundation for future web-
based search engines.
TABLE 1. Early Search Engines
Search Engine Name University Year Inventor
Archie McGill University 1990 Alan Emtage
Veronica University of Nevada 1993 Many students
WWW Wanderer Massachusetts Institute of Technology 1993 Matthew Gray
Source: Battelle, 2005.
Search Industry
During the 1990s, the Internet experienced exponential growth with thousands of new web pages
being created daily. Online document search became the chief method of navigating the ever-
expanding World Wide Web, as Internet users sought useful information among the largely
disorganized pages. As a result, the online search industry was born.
Early web-based search engine had roots in university-based research, with the exception of
AltaVista (Table 2). WebCrawler was known as the first search engine to perform full-text web
search as opposed to searching library indices. In 1996, increased competition between search
engines triggered the search engine size wars, as the companies competed to index the largest
i PageRank was named after co-founder Larry Page. The PageRank patent (U.S. Patent # 6,285,999), granted in
2001, and belongs to the trustees of Stanford University rather than Google with Larry Page as the inventor.
INTRODUCTION
Arguably the most popular search engine available today, Google is widely known for its
unparalleled search engine technology, embodied in the web page ranking algorithm, PageRank i
and running on an efficient distributed computer system. In fact, the verb “to Google” has
ingrained itself in the vernacular as a synonym of “[performing] a web search.”1 The key to
Google’s success has been its strategic use of both software and hardware information
technologies. The IT infrastructure behind the search engine includes huge storage databases
and numerous server farms to produce significant computational processing power. These
critical IT components are distributed across multiple independent computers that provide
parallel computing resources. This architecture has allowed Google’s business to reach a market
capital over $100 billion and become one of the most respected and admirable companies in the
world.
MARKET ENVIRONMENTS
Search Engine
Internet search engines were first developed in the early 1990s to facilitate the sharing of
information among researchers. The original effort to develop a tool for information search
occurred simultaneously across multiple universities is shown in Table 1. Although
functionalities of these systems were very limited, they provided the foundation for future web-
based search engines.
TABLE 1. Early Search Engines
Search Engine Name University Year Inventor
Archie McGill University 1990 Alan Emtage
Veronica University of Nevada 1993 Many students
WWW Wanderer Massachusetts Institute of Technology 1993 Matthew Gray
Source: Battelle, 2005.
Search Industry
During the 1990s, the Internet experienced exponential growth with thousands of new web pages
being created daily. Online document search became the chief method of navigating the ever-
expanding World Wide Web, as Internet users sought useful information among the largely
disorganized pages. As a result, the online search industry was born.
Early web-based search engine had roots in university-based research, with the exception of
AltaVista (Table 2). WebCrawler was known as the first search engine to perform full-text web
search as opposed to searching library indices. In 1996, increased competition between search
engines triggered the search engine size wars, as the companies competed to index the largest
i PageRank was named after co-founder Larry Page. The PageRank patent (U.S. Patent # 6,285,999), granted in
2001, and belongs to the trustees of Stanford University rather than Google with Larry Page as the inventor.
3
number of textual documents over the Internet. AltaVista was the first forefront search engine
winner, becoming the most successful and widely adored search engine in the mid 1990s.
TABLE 2. Web-based Search Engines
Search Engine Name University Year Inventor
WebCrawler University of Washington 1994 Brian Pinkerton
AltaVista Digital Equipment Corporation 1994 Louis Monier
Lycos Carnegie Mellon University 1994 Michael Mauldin
Excite Stanford University 1994 Six alumni
Inktomi University of California at Berkeley 1996 Eric Brewer and Paul Gauthier
Google Stanford University 1997 Sergey Brin and Larry Page
Source: Battelle, 2005.
Many start-up search engine companies were founded by technically brilliant academic
researchers and graduate students. However, many of these founders were young, arrogant, and
lacked business knowledge and experiences necessary to run a company. In addition, most of
these start-up companies were impacted by the dot-com bubble and failed to remain operational.
Some search companies tried to raise capital by going public, but failed on most occasions, as in
the case for AltaVista. The majority of web-based search engine companies went through a
series of acquisitions one after another, and some, such as Excite, Lycos, and AltaVista, were
acquired by companies outside of the search industry. For example, Google’s main competitor,
Yahoo, acquired or licensed technology from a number of other search engine companies
including AltaVista and Inktomi.
The lack of focus on core products in many search engine companies led to the decline of quality
search results, driving users to hunt for better alternatives. Many found their way to Google.com
because of the positive user experience. Google’s popularity spread quickly by free advertising
and by the word of mouth. Google was not the first company to enter the search industry, but it
produced search results that were the most relevant to its users. The co-founders of Google had a
vision of a distinguishing search engine from other platforms by providing fast, accurate and
reliable search results. However, during the early stages, Google tried unsuccessfully to license
its PageRank system to AltaVista, Excite, Yahoo, and other search engines. These companies
were too focused on selling advertisements and were not interested in funding new “search” tools.
Google then turned to other sources of capital, first from angel investors and later, venture
capitalists. As the number of queries on Google.com grew, Google became a popular brand
name that attracted additional investors.
Search Engine Market Share
Prior to the dot-com bubble in 2000, the search engine market was highly fragmented with fierce
competition in the market space. However, after undergoing industry consolidation, the search
engine industry was led by Yahoo, and followed by MSN, AOL, and Google. At the time,
Google had less than 1% market share in 2000 but quickly gained momentum in 2001 and 2002.
In 2001, Yahoo still led the search industry market share. Toward the end of 2002, Google
surpassed Yahoo as the market leader in search engine, and has never looked back since,
number of textual documents over the Internet. AltaVista was the first forefront search engine
winner, becoming the most successful and widely adored search engine in the mid 1990s.
TABLE 2. Web-based Search Engines
Search Engine Name University Year Inventor
WebCrawler University of Washington 1994 Brian Pinkerton
AltaVista Digital Equipment Corporation 1994 Louis Monier
Lycos Carnegie Mellon University 1994 Michael Mauldin
Excite Stanford University 1994 Six alumni
Inktomi University of California at Berkeley 1996 Eric Brewer and Paul Gauthier
Google Stanford University 1997 Sergey Brin and Larry Page
Source: Battelle, 2005.
Many start-up search engine companies were founded by technically brilliant academic
researchers and graduate students. However, many of these founders were young, arrogant, and
lacked business knowledge and experiences necessary to run a company. In addition, most of
these start-up companies were impacted by the dot-com bubble and failed to remain operational.
Some search companies tried to raise capital by going public, but failed on most occasions, as in
the case for AltaVista. The majority of web-based search engine companies went through a
series of acquisitions one after another, and some, such as Excite, Lycos, and AltaVista, were
acquired by companies outside of the search industry. For example, Google’s main competitor,
Yahoo, acquired or licensed technology from a number of other search engine companies
including AltaVista and Inktomi.
The lack of focus on core products in many search engine companies led to the decline of quality
search results, driving users to hunt for better alternatives. Many found their way to Google.com
because of the positive user experience. Google’s popularity spread quickly by free advertising
and by the word of mouth. Google was not the first company to enter the search industry, but it
produced search results that were the most relevant to its users. The co-founders of Google had a
vision of a distinguishing search engine from other platforms by providing fast, accurate and
reliable search results. However, during the early stages, Google tried unsuccessfully to license
its PageRank system to AltaVista, Excite, Yahoo, and other search engines. These companies
were too focused on selling advertisements and were not interested in funding new “search” tools.
Google then turned to other sources of capital, first from angel investors and later, venture
capitalists. As the number of queries on Google.com grew, Google became a popular brand
name that attracted additional investors.
Search Engine Market Share
Prior to the dot-com bubble in 2000, the search engine market was highly fragmented with fierce
competition in the market space. However, after undergoing industry consolidation, the search
engine industry was led by Yahoo, and followed by MSN, AOL, and Google. At the time,
Google had less than 1% market share in 2000 but quickly gained momentum in 2001 and 2002.
In 2001, Yahoo still led the search industry market share. Toward the end of 2002, Google
surpassed Yahoo as the market leader in search engine, and has never looked back since,
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claiming more than 50% of the market for the past three years (Table 3). As of 2006, major
players in the search industry market include Google, Yahoo, and MSN, with Google
maintaining its market dominance.
TABLE 3. Search Engine Market Share
Company 2004 2005 2006
Google 57.81% 63.16% 66.63%
Yahoo! 18.24% 16.51% 14.74%
MSN 13.83% 12.06% 10.92%
AOL 0.68% 3.81% 3.93%
Ask Jeeves 1.24% 1.13% 1.31%
Others 8.20% 3.33% 2.47%
Source: Netapplications.com, statistical data
GOOGLE’S BUSINESS MODEL AND STRATEGY
Business Model
Since its beginning as a research project from two Computer Science doctorate students at
Stanford University, Google has continued to follow its mission “to organize the world's
information and make it universally accessible and useful.” 2 From Google’s founding in 1997
until 2000, the company did not have a well-defined business model to generate revenues. In
2001, Google’s two co-founders hired Eric Schmidt, the chairman and CEO of Novell and
former CTO at Sun Microsystems, as the new CEO of Google to help drive the effort in creating
a business model for Google.
With new management leadership, Google created a core business in online advertising, enabled
by the millions of users using its search engine everyday. Revenue generation and profit growth
in online advertising came from both Google’s search engine homepage and partner websites
that display Google sponsored advertisements. Google created a cost-per-click pricing scheme
for sponsored advertisements such that advertisers only pay a base fee, and for the number of
referrals to their site.
Equation for calculating Google’s Revenue
Revenues = Users * * * *
Queries
User
Ads
Query
Clicks
Ad
Revenue
Click
Source: Varian, 2005.
From the metric above, Google’s revenue is affected by three factors: quantity (users *
queries/user * ads/query), quality (clicks/ads), and price (revenue/click). Quantity is dependent
on the number of keywords, advertisers, and users. Quality is based on advertisements relevant
to users and is determined by the click-through rate. Lastly, price is affected by the conversion
claiming more than 50% of the market for the past three years (Table 3). As of 2006, major
players in the search industry market include Google, Yahoo, and MSN, with Google
maintaining its market dominance.
TABLE 3. Search Engine Market Share
Company 2004 2005 2006
Google 57.81% 63.16% 66.63%
Yahoo! 18.24% 16.51% 14.74%
MSN 13.83% 12.06% 10.92%
AOL 0.68% 3.81% 3.93%
Ask Jeeves 1.24% 1.13% 1.31%
Others 8.20% 3.33% 2.47%
Source: Netapplications.com, statistical data
GOOGLE’S BUSINESS MODEL AND STRATEGY
Business Model
Since its beginning as a research project from two Computer Science doctorate students at
Stanford University, Google has continued to follow its mission “to organize the world's
information and make it universally accessible and useful.” 2 From Google’s founding in 1997
until 2000, the company did not have a well-defined business model to generate revenues. In
2001, Google’s two co-founders hired Eric Schmidt, the chairman and CEO of Novell and
former CTO at Sun Microsystems, as the new CEO of Google to help drive the effort in creating
a business model for Google.
With new management leadership, Google created a core business in online advertising, enabled
by the millions of users using its search engine everyday. Revenue generation and profit growth
in online advertising came from both Google’s search engine homepage and partner websites
that display Google sponsored advertisements. Google created a cost-per-click pricing scheme
for sponsored advertisements such that advertisers only pay a base fee, and for the number of
referrals to their site.
Equation for calculating Google’s Revenue
Revenues = Users * * * *
Queries
User
Ads
Query
Clicks
Ad
Revenue
Click
Source: Varian, 2005.
From the metric above, Google’s revenue is affected by three factors: quantity (users *
queries/user * ads/query), quality (clicks/ads), and price (revenue/click). Quantity is dependent
on the number of keywords, advertisers, and users. Quality is based on advertisements relevant
to users and is determined by the click-through rate. Lastly, price is affected by the conversion
5
probability between the click-through rate and the consumers actually purchasing products or
services on the advertiser’s site.
The ability for advertisers to determine the value per click can be computed using Google’s
conversion tracking or internal tool to calculate online advertising retention rate. Furthermore,
advertisers can bid on the maximum price they are willing to pay per click for their specific
advertisements. Minimal value of the bid starts from $0.01 cost-per-click with an upper limit of
$100. To control costs, advertisers can set an upper bound dollar limit they are willing to spend
for online marketing. Once cost-per-click reaches the budget limit set by the advertiser, their
advertisements are taken offline.
Business Strategy
Google is generally secretive about its business strategy, but it is evident that Google is building
the foundation for all of its products and services under the central theme of leveraging advanced
search technology and personalized advertising. For example, Google’s popular web-based
email service called GMail, allows users to store and search old emails rapidly using text search
integrated into the email client and then placing sponsored advertisements on the side based upon
email content a user is currently reading. The GMail client is also able to identify email contents
in which it can link information onto Google Maps and track packages from UPS and USPS.
Existing search results are primarily textual-based. More advanced search technologies will
allow users to search for other information besides textual data, such as multimedia content (e.g.
audio, image, video). To maintain its reputation as a forefront technology leader and innovator,
Google has been aggressively acquiring software start-up companies that can be easily integrated
into its existing solutions, and can instantaneously gain visibility through Google’s leverage.
However, this strategy of growing through small acquisitions is also used by Yahoo, one of
Google’s major competitors, although the underlying methodology of the acquisitions is different.
Yahoo’s acquisitions have been focused on acquiring search technology companies having
specialized search functionalities. For example, Yahoo acquired Inktomi, Overture, and Stata
Labs to perform web search, locating advertiser key words, and retrieval of Yahoo email client,
respectively. Yahoo has a group of search technologies for different products and services, while
Google has only one search technology.
Over time with greater competition, an online advertising network may be commoditized and
Google will need to develop new business models to entice new customers and enhance
relationships with existing ones for customer lock-ins (Elgin, 2004). For existing customers,
Google has Advanced Tools & Reporting to support sophisticated advertisers, and Google plans
to tighten integration with other Google related products in advertising. Since Q4 of 2005,
Google is offering Google Analytics as a free service. Google Analytics, formerly called Urchin,
is a web-based service that provides log analysis and web statistics that lets advertisers know
about their visitors and how they interact with their site. Google Analytics is integrated with
AdWords and allows advertisers to optimize their keywords so they can better target resources
for their marketing campaigns and deliver higher return on investment. This has served well for
many small and medium size businesses using AdWords as the primary marketing tool for
reaching to the customers.
probability between the click-through rate and the consumers actually purchasing products or
services on the advertiser’s site.
The ability for advertisers to determine the value per click can be computed using Google’s
conversion tracking or internal tool to calculate online advertising retention rate. Furthermore,
advertisers can bid on the maximum price they are willing to pay per click for their specific
advertisements. Minimal value of the bid starts from $0.01 cost-per-click with an upper limit of
$100. To control costs, advertisers can set an upper bound dollar limit they are willing to spend
for online marketing. Once cost-per-click reaches the budget limit set by the advertiser, their
advertisements are taken offline.
Business Strategy
Google is generally secretive about its business strategy, but it is evident that Google is building
the foundation for all of its products and services under the central theme of leveraging advanced
search technology and personalized advertising. For example, Google’s popular web-based
email service called GMail, allows users to store and search old emails rapidly using text search
integrated into the email client and then placing sponsored advertisements on the side based upon
email content a user is currently reading. The GMail client is also able to identify email contents
in which it can link information onto Google Maps and track packages from UPS and USPS.
Existing search results are primarily textual-based. More advanced search technologies will
allow users to search for other information besides textual data, such as multimedia content (e.g.
audio, image, video). To maintain its reputation as a forefront technology leader and innovator,
Google has been aggressively acquiring software start-up companies that can be easily integrated
into its existing solutions, and can instantaneously gain visibility through Google’s leverage.
However, this strategy of growing through small acquisitions is also used by Yahoo, one of
Google’s major competitors, although the underlying methodology of the acquisitions is different.
Yahoo’s acquisitions have been focused on acquiring search technology companies having
specialized search functionalities. For example, Yahoo acquired Inktomi, Overture, and Stata
Labs to perform web search, locating advertiser key words, and retrieval of Yahoo email client,
respectively. Yahoo has a group of search technologies for different products and services, while
Google has only one search technology.
Over time with greater competition, an online advertising network may be commoditized and
Google will need to develop new business models to entice new customers and enhance
relationships with existing ones for customer lock-ins (Elgin, 2004). For existing customers,
Google has Advanced Tools & Reporting to support sophisticated advertisers, and Google plans
to tighten integration with other Google related products in advertising. Since Q4 of 2005,
Google is offering Google Analytics as a free service. Google Analytics, formerly called Urchin,
is a web-based service that provides log analysis and web statistics that lets advertisers know
about their visitors and how they interact with their site. Google Analytics is integrated with
AdWords and allows advertisers to optimize their keywords so they can better target resources
for their marketing campaigns and deliver higher return on investment. This has served well for
many small and medium size businesses using AdWords as the primary marketing tool for
reaching to the customers.
6
Google has begun targeting its vertical sales in advertising to focus on Fortune 1,000 companies,
where they have only captured one-forth of the market share. 3 Fortune 500 companies have not
caught on as quickly using online marketing, and have relied more on traditional marketing
techniques. However, according to a study conducted by Advertising Age, “Nearly half of the
chief marketing officers at Fortune 500 companies said they plan to increase their online
advertising budgets by 30% in 2006.” 4 Out of the $250 billion dollar advertising industry in the
United States alone, only $11 billion is spent online with about $5 billion attributed to search
advertising where Google has 79% of the market share. To reach new markets faster, Google is
expanding its advertising business beyond online marketing to other mediums, including radio
and print. Google has already exhibited some efforts to diversify its advertising business by
acquiring dMarc Broadcasting in January 2006, a company that develops a unique automated-
radio–advertising-selling process between radio stations and advertisers (Perez, 2006). Google
plans to integrate its AdWords platform with dMarc’s software that automates the buying and
placing of radio advertisements. Google is also experimenting with integrating its AdWords
platform with print media by running classified advertisements for its AdWords customers
through a limited trial in PC Magazine, Maximum PC, Budget Living, and the Chicago Sun
Times (Hoover, 2006).
GOOGLE’S PRODUCTS AND SERVICES
Key Product and Services
Online advertising is Google’s core product and accounts for 90% of the company’s revenue.
AdWords, a cost-per-click pricing scheme, was a result of Google’s newly formed business
model in online advertising. AdWords allows advertisers to pay Google once visitors click on an
advertisement after entering a search query (Figure 1). Unlike other online marketing that use
image and animated banners, these advertisements are text-based to maintain an uncluttered page
design. This is a concept that Google’s co-founders believe is essential for an enjoyable user
search engine experience since most users typically want to find information and promptly leave
the search results page. Increasing the covered audience is a complementary product called
AdSense which involves placing targeted AdWords advertisements on Google’s partner websites
(Figure 2).
FIGURE 1. Google AdWords
Google has begun targeting its vertical sales in advertising to focus on Fortune 1,000 companies,
where they have only captured one-forth of the market share. 3 Fortune 500 companies have not
caught on as quickly using online marketing, and have relied more on traditional marketing
techniques. However, according to a study conducted by Advertising Age, “Nearly half of the
chief marketing officers at Fortune 500 companies said they plan to increase their online
advertising budgets by 30% in 2006.” 4 Out of the $250 billion dollar advertising industry in the
United States alone, only $11 billion is spent online with about $5 billion attributed to search
advertising where Google has 79% of the market share. To reach new markets faster, Google is
expanding its advertising business beyond online marketing to other mediums, including radio
and print. Google has already exhibited some efforts to diversify its advertising business by
acquiring dMarc Broadcasting in January 2006, a company that develops a unique automated-
radio–advertising-selling process between radio stations and advertisers (Perez, 2006). Google
plans to integrate its AdWords platform with dMarc’s software that automates the buying and
placing of radio advertisements. Google is also experimenting with integrating its AdWords
platform with print media by running classified advertisements for its AdWords customers
through a limited trial in PC Magazine, Maximum PC, Budget Living, and the Chicago Sun
Times (Hoover, 2006).
GOOGLE’S PRODUCTS AND SERVICES
Key Product and Services
Online advertising is Google’s core product and accounts for 90% of the company’s revenue.
AdWords, a cost-per-click pricing scheme, was a result of Google’s newly formed business
model in online advertising. AdWords allows advertisers to pay Google once visitors click on an
advertisement after entering a search query (Figure 1). Unlike other online marketing that use
image and animated banners, these advertisements are text-based to maintain an uncluttered page
design. This is a concept that Google’s co-founders believe is essential for an enjoyable user
search engine experience since most users typically want to find information and promptly leave
the search results page. Increasing the covered audience is a complementary product called
AdSense which involves placing targeted AdWords advertisements on Google’s partner websites
(Figure 2).
FIGURE 1. Google AdWords
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FIGURE 2.. Google AdSense
FIGURE 3. Google Toolbar Plug-in for Web Browser
Other Google Products and Services
Besides online advertising services, Google leverages its search technology into a number of
other search related services. One of these services is a product search website called Froogle.
Froogle allows online shoppers the basis to search for product categories and brands, access to
product reviews, and compare item prices. The use of search was further expanded beyond
finding content on web pages to assist users to search for imagery information such as maps and
satellite overlays through Google Earth. A similar concept was developed in a location-based
service called Google Local in which users can search for nearby locations such as the closest
coffee shop which will be labeled on a map displaying the shops in the surrounding area. Other
search related services offered by Google that have gained popularity among users include an
image search: Google Images, a searchable email client: GMail, a desktop file search tool:
Google Desktop, and a web-based video streaming tool: Google Video. As the number of
Google search queries increased, Google expanded their search accessibility by offering a
Google search toolbar that users can download as a plug-in to many standard web browsers such
as Internet Explorer and Mozilla Firefox (Figure 3). Many of the products and services Google
develops depend on advertisements to generate revenues, but some such as Google Images,
Google Earth, and Google SketchUp do not.
The only hardware equipment that Google sells to date is a standalone search product solution
for the enterprise market. A listing of products and services offered by Google is shown in Table
4. The product offers corporate employees, partners, and customers to easily find information
and product solutions through their internal networks. These products are known as Google
Mini and Google Search Appliance, depending on the documents index capacity. Google pre-
FIGURE 2.. Google AdSense
FIGURE 3. Google Toolbar Plug-in for Web Browser
Other Google Products and Services
Besides online advertising services, Google leverages its search technology into a number of
other search related services. One of these services is a product search website called Froogle.
Froogle allows online shoppers the basis to search for product categories and brands, access to
product reviews, and compare item prices. The use of search was further expanded beyond
finding content on web pages to assist users to search for imagery information such as maps and
satellite overlays through Google Earth. A similar concept was developed in a location-based
service called Google Local in which users can search for nearby locations such as the closest
coffee shop which will be labeled on a map displaying the shops in the surrounding area. Other
search related services offered by Google that have gained popularity among users include an
image search: Google Images, a searchable email client: GMail, a desktop file search tool:
Google Desktop, and a web-based video streaming tool: Google Video. As the number of
Google search queries increased, Google expanded their search accessibility by offering a
Google search toolbar that users can download as a plug-in to many standard web browsers such
as Internet Explorer and Mozilla Firefox (Figure 3). Many of the products and services Google
develops depend on advertisements to generate revenues, but some such as Google Images,
Google Earth, and Google SketchUp do not.
The only hardware equipment that Google sells to date is a standalone search product solution
for the enterprise market. A listing of products and services offered by Google is shown in Table
4. The product offers corporate employees, partners, and customers to easily find information
and product solutions through their internal networks. These products are known as Google
Mini and Google Search Appliance, depending on the documents index capacity. Google pre-
8
installs its own search software and other customized software components in these hardware
products. Google’s bundling of software packages and hardware platform has alienated external
hardware and software vendors the same services in other platform configurations.
TABLE 4. Other Notable Products and Services by Google
Product/Service Name Description
Google Earth Satellite imagery of geographical locations
Google Maps View driving maps and directions
Google Local Search for local businesses and shops
Google News Search for news stories
Google Video Search for TV programs and video clips
Google Desktop Search Search for offline information stored on computers
Google Image Search Search for images online
Google SketchUp 3-D model design tool
Google Checkout Online payment processing service
Google Search Appliance Enterprise search engine
GMail Web-based email client
GTalk Internet instant messaging and VoIP
Orkut Online social network community
Froogle Electronic shopper product search
Others: Google Page Creator, Google Analytics, Picasa, Blogger, Google Mobile, Google
SMS, Google Finance, Google Groups, Google Scholar, Google Pack, Google Book
Search, Google Code, Google Alerts, Google Calendar
Source: Google website, listing of services and products
How Google Innovates
Google is a technology innovator that focuses on developing revolutionary ideas as well as
complementary products and services. More than two-thirds of the company’s employees are
engineers and scientists. The company is a powerhouse of new technology innovations driven
by software, and has a division unit called Google Labs which the company termed as an
“engineer’s playground.”5 Google Labs was developed since the early days of the company, and
there is a place on the website to showcase new experimental products developed by Google
employees. The product prototypes are available for anyone to download as beta version prior to
commercial release. Unlike many engineering developments that never see daylight, this gives
engineers a sense of satisfaction that their ideas turn into products that people can use.
One of the most important characteristic for Google’s innovative thinking is attributed to its
work atmosphere. Unlike a typical corporate environment, Google’s headquarters in Mountain
View, called the Googleplex, is reminiscent of a college campus, and operate like a graduate
school atmosphere with numerous guest speakers everyday and where open mind is encouraged.
Other technology companies have previously tried to mimic a similar university culture but
Google goes a long way in providing flexibility, openness, and fun workplace for its employees.
To minimize management from getting into the way of the engineers, Google adopts a very flat
organizational structure.
installs its own search software and other customized software components in these hardware
products. Google’s bundling of software packages and hardware platform has alienated external
hardware and software vendors the same services in other platform configurations.
TABLE 4. Other Notable Products and Services by Google
Product/Service Name Description
Google Earth Satellite imagery of geographical locations
Google Maps View driving maps and directions
Google Local Search for local businesses and shops
Google News Search for news stories
Google Video Search for TV programs and video clips
Google Desktop Search Search for offline information stored on computers
Google Image Search Search for images online
Google SketchUp 3-D model design tool
Google Checkout Online payment processing service
Google Search Appliance Enterprise search engine
GMail Web-based email client
GTalk Internet instant messaging and VoIP
Orkut Online social network community
Froogle Electronic shopper product search
Others: Google Page Creator, Google Analytics, Picasa, Blogger, Google Mobile, Google
SMS, Google Finance, Google Groups, Google Scholar, Google Pack, Google Book
Search, Google Code, Google Alerts, Google Calendar
Source: Google website, listing of services and products
How Google Innovates
Google is a technology innovator that focuses on developing revolutionary ideas as well as
complementary products and services. More than two-thirds of the company’s employees are
engineers and scientists. The company is a powerhouse of new technology innovations driven
by software, and has a division unit called Google Labs which the company termed as an
“engineer’s playground.”5 Google Labs was developed since the early days of the company, and
there is a place on the website to showcase new experimental products developed by Google
employees. The product prototypes are available for anyone to download as beta version prior to
commercial release. Unlike many engineering developments that never see daylight, this gives
engineers a sense of satisfaction that their ideas turn into products that people can use.
One of the most important characteristic for Google’s innovative thinking is attributed to its
work atmosphere. Unlike a typical corporate environment, Google’s headquarters in Mountain
View, called the Googleplex, is reminiscent of a college campus, and operate like a graduate
school atmosphere with numerous guest speakers everyday and where open mind is encouraged.
Other technology companies have previously tried to mimic a similar university culture but
Google goes a long way in providing flexibility, openness, and fun workplace for its employees.
To minimize management from getting into the way of the engineers, Google adopts a very flat
organizational structure.
9
Google engineer Joe Beda praised the positive atmosphere inside the Google headquarters: “The
intrapersonal environment at Google is very energizing. When someone comes up with a new
idea, the most common response is excitement and a brainstorming session.” 6 Google
implemented a 20 percent rule in which engineers spend 80% of their time at work on Google’s
core products, and the freedom to dedicate the remaining 20% of their working time on any “pet
projects.” The 20 percent rule was a way of encouraging innovation at Google. Adopting the
philosophy of 20 percent rule has enabled the engineers at Google to develop a number of
products including Froogle, Google News, Google Finance, Orkut, and GTalk. In 2005, the
company changed this policy slightly with a 70/20/10 rule, where 70% of time is spent on search
and advertising, 20% on a work-related product, and 10% on other ideas. Google’s product
framework following this work policy is shown in Figure 4 below. Following the principles
from management guru Peter Drucker that “knowledge workers believe they are paid to be
effective,” Google employees are provided with free laundry services, free gourmet food, barbers,
massages, gym, commuting buses with Wi-Fi access, as well as on-site oil changes, car washes,
and physician doctors.
FIGURE 4. Google 70/20/10 Product Framework
Source: Google Analyst Day, slide presentation, March 2006.
Acquisition and Incorporation of Companies
Google is very aggressive in acquiring innovative technologies and ideas. For the past five years,
Google has acquired over 25 technology companies (Table 5). Google has subsequently
transformed many of these technologies acquired from the buyouts into Google products and
services such as Google Earth and Google Analytics (Table 5, Derived Google Services).
Google engineer Joe Beda praised the positive atmosphere inside the Google headquarters: “The
intrapersonal environment at Google is very energizing. When someone comes up with a new
idea, the most common response is excitement and a brainstorming session.” 6 Google
implemented a 20 percent rule in which engineers spend 80% of their time at work on Google’s
core products, and the freedom to dedicate the remaining 20% of their working time on any “pet
projects.” The 20 percent rule was a way of encouraging innovation at Google. Adopting the
philosophy of 20 percent rule has enabled the engineers at Google to develop a number of
products including Froogle, Google News, Google Finance, Orkut, and GTalk. In 2005, the
company changed this policy slightly with a 70/20/10 rule, where 70% of time is spent on search
and advertising, 20% on a work-related product, and 10% on other ideas. Google’s product
framework following this work policy is shown in Figure 4 below. Following the principles
from management guru Peter Drucker that “knowledge workers believe they are paid to be
effective,” Google employees are provided with free laundry services, free gourmet food, barbers,
massages, gym, commuting buses with Wi-Fi access, as well as on-site oil changes, car washes,
and physician doctors.
FIGURE 4. Google 70/20/10 Product Framework
Source: Google Analyst Day, slide presentation, March 2006.
Acquisition and Incorporation of Companies
Google is very aggressive in acquiring innovative technologies and ideas. For the past five years,
Google has acquired over 25 technology companies (Table 5). Google has subsequently
transformed many of these technologies acquired from the buyouts into Google products and
services such as Google Earth and Google Analytics (Table 5, Derived Google Services).
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TABLE 5. Companies Acquired by Googleii
Company Technology Date Acquired Derived Google Services
Deja Usenet Search Services February 2001 Google Groups
Outride Inc Personalized Internet Search February 2003 Personalized Internet Search
Pyra Labs Blogging February 2003 Blogger.com
Neotonic Software E-Mail Customer Support April 2003 E-mail Groups, GMail
Applied Symantics Online Advertising April 2003 AdSense, AdWatch
Kaltix Personalized Internet Search September 2003 Google Personal
Genius Labs Blogging Entity October 2003 Blogger.com
Sprinks Paid Advertising October 2003 AdSense and AdWords
Ignite Logic Web Templates April 2004 *
Picasa Photo Management Software July 2004 Picasa/Blogger
Where 2 Technologies Internet Mapping August 2004 *
Keyhole Satellite Imagery October 2004 Google Maps/Google Earth
Zipdash Mobile GPS Traffic Updates December 2004 Google Ride Finder
Urchin Software Web Analytics March 2005 Google Analytics
Dodgeball Mobile Social Networking May 2005 Google Mobile/Google SMS
Reqwireless Wireless Software June 2005 *
Akwan IT Distributed Data Processing July 2005 *
Android Inc Mobile Phone Software August 2005 Google Mobile/Google SMS
dMarc Broadcasting Radio Advertising January 2006 *
Measure Map Blogging Analytics February 2006 Google Analytics
Writely Web-based Word Processing March 2006 *
"@"Last Software 3-D Design Tool Maker March 2006 *
2Web Technologies Web Spreadsheet June 2006 Google Spreadsheet
Neven Vision Biometric Identification August 2006 *
JotSpot Wiki Host Site October 2006 *
YouTube Internet Video November 2006 *
Endoxon Internet and Mobile Mapping December 2006 *
Adscape Video Game Advertising February 2007 *
Source: Various news sources
Acquisition of People
Likewise, Google is among the most active high-tech company in the footprint for hiring top
engineering talents. During the technology bust, Google seized opportunity to hire bright
technologists and focused on doing what they do best: search. Google co-founders Brin and
Page had their pick of talents since they were hiring while everyone else was firing (Vise, 2005).
Google’s revenue did not grow rapidly at first, but its employee brainpower was. Instead of
paying these engineers high salaries, Google offered them mediocre pay but generous stock
options. Many of these individuals hired by Google were either inventors of successful
technologies or technical leads for a division of their former employer.
The knowledge and skills from these talents were difficult to replace and in some cases,
irreplaceable. A high profile example of this to date was when a former Microsoft Vice
President and academic professor, Kai-Fu Lee left Microsoft to work for Google. Lee was
known as an industry expert in speech recognition and played a pivotal role in driving
ii * Denotes unidentifiable derived Google services
TABLE 5. Companies Acquired by Googleii
Company Technology Date Acquired Derived Google Services
Deja Usenet Search Services February 2001 Google Groups
Outride Inc Personalized Internet Search February 2003 Personalized Internet Search
Pyra Labs Blogging February 2003 Blogger.com
Neotonic Software E-Mail Customer Support April 2003 E-mail Groups, GMail
Applied Symantics Online Advertising April 2003 AdSense, AdWatch
Kaltix Personalized Internet Search September 2003 Google Personal
Genius Labs Blogging Entity October 2003 Blogger.com
Sprinks Paid Advertising October 2003 AdSense and AdWords
Ignite Logic Web Templates April 2004 *
Picasa Photo Management Software July 2004 Picasa/Blogger
Where 2 Technologies Internet Mapping August 2004 *
Keyhole Satellite Imagery October 2004 Google Maps/Google Earth
Zipdash Mobile GPS Traffic Updates December 2004 Google Ride Finder
Urchin Software Web Analytics March 2005 Google Analytics
Dodgeball Mobile Social Networking May 2005 Google Mobile/Google SMS
Reqwireless Wireless Software June 2005 *
Akwan IT Distributed Data Processing July 2005 *
Android Inc Mobile Phone Software August 2005 Google Mobile/Google SMS
dMarc Broadcasting Radio Advertising January 2006 *
Measure Map Blogging Analytics February 2006 Google Analytics
Writely Web-based Word Processing March 2006 *
"@"Last Software 3-D Design Tool Maker March 2006 *
2Web Technologies Web Spreadsheet June 2006 Google Spreadsheet
Neven Vision Biometric Identification August 2006 *
JotSpot Wiki Host Site October 2006 *
YouTube Internet Video November 2006 *
Endoxon Internet and Mobile Mapping December 2006 *
Adscape Video Game Advertising February 2007 *
Source: Various news sources
Acquisition of People
Likewise, Google is among the most active high-tech company in the footprint for hiring top
engineering talents. During the technology bust, Google seized opportunity to hire bright
technologists and focused on doing what they do best: search. Google co-founders Brin and
Page had their pick of talents since they were hiring while everyone else was firing (Vise, 2005).
Google’s revenue did not grow rapidly at first, but its employee brainpower was. Instead of
paying these engineers high salaries, Google offered them mediocre pay but generous stock
options. Many of these individuals hired by Google were either inventors of successful
technologies or technical leads for a division of their former employer.
The knowledge and skills from these talents were difficult to replace and in some cases,
irreplaceable. A high profile example of this to date was when a former Microsoft Vice
President and academic professor, Kai-Fu Lee left Microsoft to work for Google. Lee was
known as an industry expert in speech recognition and played a pivotal role in driving
ii * Denotes unidentifiable derived Google services
11
Microsoft’s China strategy. Microsoft feared this was not only a loss of talent, but a leakage of
critical confidential information which resulted in a legal battle against Google for a one year
non-competitive agreement signed by Lee. The case was settled between Microsoft and Google
with the court judge placing a temporary restraining order for the type of projects Lee can work
on at Google. Lee effectively started working for Google without further delay.
Various news surfacing in the technology industry estimates that over 100 former Microsoft
employees to date have left their former employers and opted-out to work for Google instead. If
this estimated figure is fairly accurate, approximately 1.76% of Google’s total employee pool
would be ex-Microsoft workers.iii Among the complaints, these former Microsoft employees
criticized that there were duplicate efforts within the company and more time spent on
maintaining software at Microsoft instead of innovating new product ideas. Google has hired
many notable technologists which include technology industry legends and young guru
programmers (Table 6).
Working at Google is not only attractive in the industry, but is equally enticing from many of
those in academia. In fact, many university professors have opted out from their academic career
track of getting tenureship to work for Google. For example, in December 2005, Andrew Moore,
Professor of Computer Science at Carnegie Mellon University and an expert in data mining and
artificial intelligence, decided to join Google and lead Google’s new Pittsburgh engineering
office.7
To ensure the quality of its workers at Google, the employment screening process has become
one of most rigorous among all technology companies, comparable to Microsoft, and perhaps
even more difficult. Applicants are asked to solve complex technical questions from at least half
a dozen interviewers. Google is very careful in their recruiting and their hiring process is based
on a committee hearing everyone’s feedback (Schmidt & Varian, 2005). An entire interview
process at Google can take several months before a decision is made.
iii As of December 31st, 2005, there are 5,680 full-time employees. Calculation for 1.76% (~100 / 5680).
Microsoft’s China strategy. Microsoft feared this was not only a loss of talent, but a leakage of
critical confidential information which resulted in a legal battle against Google for a one year
non-competitive agreement signed by Lee. The case was settled between Microsoft and Google
with the court judge placing a temporary restraining order for the type of projects Lee can work
on at Google. Lee effectively started working for Google without further delay.
Various news surfacing in the technology industry estimates that over 100 former Microsoft
employees to date have left their former employers and opted-out to work for Google instead. If
this estimated figure is fairly accurate, approximately 1.76% of Google’s total employee pool
would be ex-Microsoft workers.iii Among the complaints, these former Microsoft employees
criticized that there were duplicate efforts within the company and more time spent on
maintaining software at Microsoft instead of innovating new product ideas. Google has hired
many notable technologists which include technology industry legends and young guru
programmers (Table 6).
Working at Google is not only attractive in the industry, but is equally enticing from many of
those in academia. In fact, many university professors have opted out from their academic career
track of getting tenureship to work for Google. For example, in December 2005, Andrew Moore,
Professor of Computer Science at Carnegie Mellon University and an expert in data mining and
artificial intelligence, decided to join Google and lead Google’s new Pittsburgh engineering
office.7
To ensure the quality of its workers at Google, the employment screening process has become
one of most rigorous among all technology companies, comparable to Microsoft, and perhaps
even more difficult. Applicants are asked to solve complex technical questions from at least half
a dozen interviewers. Google is very careful in their recruiting and their hiring process is based
on a committee hearing everyone’s feedback (Schmidt & Varian, 2005). An entire interview
process at Google can take several months before a decision is made.
iii As of December 31st, 2005, there are 5,680 full-time employees. Calculation for 1.76% (~100 / 5680).
12
TABLE 6. Respected Individuals Hired by Google
Top Talents Hired Previous Positions Held
Vint Cerf Senior VP at Worldcom, also known as the Father of Internet
Kai-Fu Lee VP at Microsoft, lead Microsoft China Research Lab, VP of Apple
Adam Bosworth BEA and Microsoft, pivotal role in Internet Explorer
Joe Beda Lead of Avalon team at Microsoft
Mark Lucovsky Microsoft, pivotal role in Windows operating system
Meir Brand Microsoft and AOL executive
Louis Monier Director at EBay, founder of AltaVista search engine
Udi Manber CEO of Amazon spin-off A9 online search, Chief Scientist at Yahoo
Rob Pike Scientist from Bell Labs, worked on operating systems
Peter Norvig scientists at NASA, Junglee, SUN Microsystems Labs
Joshua Bloch Java coder guru from SUN Microsystems
Guido van Rossum Inventor of Python programming language
Cedric Beust Weblogic developer at BEA Systems
Darin Fisher Firefox developer
Ben Goodger Firefox developer
Brian Rydner Mozilla developer
Mike Pinkerton Lead Camino developer open source project
Sean Egan Lead Gaim developer open source project
Dr. Larry Brilliant Award-winning physician
Andy Hertzfeld Apple Computer's original Macintosh development team
Elliot Schrage Business and Foreign Policy at the Council on Foreign Relations
Andrew W. Moore Carnegie Mellon University Professor of Computer Science and Robotics
Alan Davidson Associate Director for Advocacy Group Center for Democracy & Technology
Nikesh Arora Chief Marketing Officer at T-Mobile
Johnny Chou President of UTStarcom China operations
Joerg Heilig Director of Engineering at SUN Microsystems
Hal Varian Consultant for Google, Management Professor at UC Berkeley
Wray Buntine Consultant for Google, Senior Research Scientist at Helsinki Institute of IT
Source: Various news sources
Strategic Partners and Alliances
As a formidable player in search technology, Google has gained respect and visibility in the
technology industry. It is without surprise that other technology companies are considering
partnering or forming business alliances that can leverage synergies with Google’s search
expertise. Interestingly, companies that have been competing with Microsoft in some market
sectors seem to be partners with Google, as in the case for America Online and SUN
Microsystems. In late 2005, Google invested $1 billion in AOL for a 5% stake (Mills, 2005).
The partnership enables AOL to use Google’s search engine power while Google receives rights
to sell additional sponsored advertisement through AOL’s user network. An unconfirmed article
from News.com reports that up to 10% of Google’s advertising revenue came from AOL (Olsen
& Mills, 2005).
In a joint R&D collaboration, Google has partnered with NASA where Google applies its search
technology on terabytes of incoming data to Earth from various NASA space projects. For the
project, Google agreed to supply capital to build a new R&D facility in Mountain View that will
occupy both Google and NASA engineers (Lewis & Fox, 2005). To expand the enterprise
search business, Google has partnered with BearingPoint, formerly KPMG consulting. Google
TABLE 6. Respected Individuals Hired by Google
Top Talents Hired Previous Positions Held
Vint Cerf Senior VP at Worldcom, also known as the Father of Internet
Kai-Fu Lee VP at Microsoft, lead Microsoft China Research Lab, VP of Apple
Adam Bosworth BEA and Microsoft, pivotal role in Internet Explorer
Joe Beda Lead of Avalon team at Microsoft
Mark Lucovsky Microsoft, pivotal role in Windows operating system
Meir Brand Microsoft and AOL executive
Louis Monier Director at EBay, founder of AltaVista search engine
Udi Manber CEO of Amazon spin-off A9 online search, Chief Scientist at Yahoo
Rob Pike Scientist from Bell Labs, worked on operating systems
Peter Norvig scientists at NASA, Junglee, SUN Microsystems Labs
Joshua Bloch Java coder guru from SUN Microsystems
Guido van Rossum Inventor of Python programming language
Cedric Beust Weblogic developer at BEA Systems
Darin Fisher Firefox developer
Ben Goodger Firefox developer
Brian Rydner Mozilla developer
Mike Pinkerton Lead Camino developer open source project
Sean Egan Lead Gaim developer open source project
Dr. Larry Brilliant Award-winning physician
Andy Hertzfeld Apple Computer's original Macintosh development team
Elliot Schrage Business and Foreign Policy at the Council on Foreign Relations
Andrew W. Moore Carnegie Mellon University Professor of Computer Science and Robotics
Alan Davidson Associate Director for Advocacy Group Center for Democracy & Technology
Nikesh Arora Chief Marketing Officer at T-Mobile
Johnny Chou President of UTStarcom China operations
Joerg Heilig Director of Engineering at SUN Microsystems
Hal Varian Consultant for Google, Management Professor at UC Berkeley
Wray Buntine Consultant for Google, Senior Research Scientist at Helsinki Institute of IT
Source: Various news sources
Strategic Partners and Alliances
As a formidable player in search technology, Google has gained respect and visibility in the
technology industry. It is without surprise that other technology companies are considering
partnering or forming business alliances that can leverage synergies with Google’s search
expertise. Interestingly, companies that have been competing with Microsoft in some market
sectors seem to be partners with Google, as in the case for America Online and SUN
Microsystems. In late 2005, Google invested $1 billion in AOL for a 5% stake (Mills, 2005).
The partnership enables AOL to use Google’s search engine power while Google receives rights
to sell additional sponsored advertisement through AOL’s user network. An unconfirmed article
from News.com reports that up to 10% of Google’s advertising revenue came from AOL (Olsen
& Mills, 2005).
In a joint R&D collaboration, Google has partnered with NASA where Google applies its search
technology on terabytes of incoming data to Earth from various NASA space projects. For the
project, Google agreed to supply capital to build a new R&D facility in Mountain View that will
occupy both Google and NASA engineers (Lewis & Fox, 2005). To expand the enterprise
search business, Google has partnered with BearingPoint, formerly KPMG consulting. Google
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endorses customized Google Search Appliance hardware, and Google Desktop software that
BearingPoint can offer its customers a new enterprise search solution. Google has already
trained over 100 BearingPoint IT professionals to facilitate the technology consulting firm
(Regan, 2006).
Perhaps the most important of all partnerships is between Google and SUN Microsystems. In the
joint effort, Google is hiring engineers to assist on the OpenOffice project, an open source office
suite that SUN Microsystems supports. In addition to the collaboration, Google has deep
historical relationships with SUN Microsystems; Google’s CEO, Eric Schmidt, and the
company’s first angel investor, Andy Bechtolsheim, are both co-founders of SUN Microsystems.
A summary of the strategic alliances Google has formed with these technology companies is
shown in Table 7.
TABLE 7. Strategic Google Partners and Alliances
Company Collaboration Efforts Date
NASA R&D; Google provide funding for a new joint R&D center September 2005
SUN
Microsystems
OpenOffice, an open source office suite October 2005
America Online AOL adopts Google’s search engine; Google advertises in
AOL network
December 2005
Bearing Point Enterprise search technology services with unstructured data February 2006
Source: Various news sources
INFORMATION TECHNOLOGY AT GOOGLE
The focus of information technology at Google for both software and hardware is speed and cost.
These two metrics are valued more than any other criteria such as reliability of machines or high-
performance enterprise computing hardware. Ultimately, the result must transform a response
time of user query using Google’s search engine to be completed within a one second time-frame.
Started in Larry Page’s dormitory room, the information technology at Google has transformed
into a full-blown large cluster PC network that functions similar to a computing grid.iv Even
though information technology infrastructure has changed dramatically over the years, the model
of IT use at Google has stayed the same. This model follows the original principles adopted by
the co-founders of building a prototype system that uses commodity hardware and intelligent
software. The shift of computer industry with PCs becoming commodity electronic hardware
over the years has worked in favor of Google’s IT strategy in getting the best cost performance
ratio (Patterson & Hennessy, 2004). Thus, instead of purchasing the latest microprocessors,
Google IT performs calculations to look for the best value of processing power per dollar and
purchasing many PCs that are only a few months old in the market, but at a much lower
discounted price. This is suitable for Google because the framework of their search engine is
built around parallelizing many user query requests across multiple machines and if more
iv Computing grid is an emerging model in technology that provides higher scientific computations through the use
of many networked computer systems, thereby imitating supercomputer processing capabilities.
endorses customized Google Search Appliance hardware, and Google Desktop software that
BearingPoint can offer its customers a new enterprise search solution. Google has already
trained over 100 BearingPoint IT professionals to facilitate the technology consulting firm
(Regan, 2006).
Perhaps the most important of all partnerships is between Google and SUN Microsystems. In the
joint effort, Google is hiring engineers to assist on the OpenOffice project, an open source office
suite that SUN Microsystems supports. In addition to the collaboration, Google has deep
historical relationships with SUN Microsystems; Google’s CEO, Eric Schmidt, and the
company’s first angel investor, Andy Bechtolsheim, are both co-founders of SUN Microsystems.
A summary of the strategic alliances Google has formed with these technology companies is
shown in Table 7.
TABLE 7. Strategic Google Partners and Alliances
Company Collaboration Efforts Date
NASA R&D; Google provide funding for a new joint R&D center September 2005
SUN
Microsystems
OpenOffice, an open source office suite October 2005
America Online AOL adopts Google’s search engine; Google advertises in
AOL network
December 2005
Bearing Point Enterprise search technology services with unstructured data February 2006
Source: Various news sources
INFORMATION TECHNOLOGY AT GOOGLE
The focus of information technology at Google for both software and hardware is speed and cost.
These two metrics are valued more than any other criteria such as reliability of machines or high-
performance enterprise computing hardware. Ultimately, the result must transform a response
time of user query using Google’s search engine to be completed within a one second time-frame.
Started in Larry Page’s dormitory room, the information technology at Google has transformed
into a full-blown large cluster PC network that functions similar to a computing grid.iv Even
though information technology infrastructure has changed dramatically over the years, the model
of IT use at Google has stayed the same. This model follows the original principles adopted by
the co-founders of building a prototype system that uses commodity hardware and intelligent
software. The shift of computer industry with PCs becoming commodity electronic hardware
over the years has worked in favor of Google’s IT strategy in getting the best cost performance
ratio (Patterson & Hennessy, 2004). Thus, instead of purchasing the latest microprocessors,
Google IT performs calculations to look for the best value of processing power per dollar and
purchasing many PCs that are only a few months old in the market, but at a much lower
discounted price. This is suitable for Google because the framework of their search engine is
built around parallelizing many user query requests across multiple machines and if more
iv Computing grid is an emerging model in technology that provides higher scientific computations through the use
of many networked computer systems, thereby imitating supercomputer processing capabilities.
14
processing is required, the system can simply increase more machines to serve even greater user
requests. The overall price per performance is more important than individual peak
performances, and this enables Google to achieve superior speed at a fraction of the cost rather
than using a few, but expensive high-end server systems. The end equation for Google’s IT in
selecting machines is calculated by the cost per query, and is derived by the sum of capital
expenses and operating costs divided by performance. For accuracy, the calculation takes into
inherent effects due to hardware depreciation and maintenance repairs. At the data centers, the
primary cost factor is capital expenditure credited to hardware, followed by personnel and
hosting costs (Barozzo, et al., 2003).
FIGURE 5. Equation for Calculating IT Cost at Google
Cost = Capital Expense + Operating Cost
Query Performance
Source: Barroso, et al, 2003.
To address the reliability problem with commodity PCs, Google solves the issue mainly in
software by implementing reliability and redundancy functionality in its architecture. Similar to
reducing operational costs in hardware, Google adopts numerous open-source software solutions
with available software functionalities and libraries. In many instances, when Google uses a
particular open-source project rigorously, the company would hire active developers from the
open source project and bring them on board. For example, lead software architect and guru
programmers for open source projects such as Mozilla Firefox, Camino, and Gaim have joined
Google in the past two years (Table 6). The software engineering process at Google focuses
highly on programmer productivity with developers responsible for writing software. A separate
team takes the responsibility of making the software distributed and run in parallel. Even an
increased productivity of a few percent in programming time can result in thousands of dollars in
savings. The CFO of Google, George Reyes, describes “Revenue per employee [as] a key metric.
Google's revenue per employee is double that of its competitors, a comparison of $1.44 million
per head versus $700,000 per head for rivals.”8
Software Technology
A large portion of IT at Google depends on complex software components and architecture
design. Generally, a search engine is a program that helps find information stored on a computer
system. Three important steps in software technology are essential for developing a web-based
search engine. These operations are web page crawling, indexing, and searching. The non-stop
“web crawler” collects documents from the web. The information is stored in a searchable index,
and a metric for finding desired result is computed based upon user query. One of Google’s co-
founders, Sergey Brin, wrote a web crawler to find and store web page indexes that later became
Googlebot, while Larry Page, Google’s other co-founder, came up with a unique technique to
calculate web page relevance called PageRank. 9
processing is required, the system can simply increase more machines to serve even greater user
requests. The overall price per performance is more important than individual peak
performances, and this enables Google to achieve superior speed at a fraction of the cost rather
than using a few, but expensive high-end server systems. The end equation for Google’s IT in
selecting machines is calculated by the cost per query, and is derived by the sum of capital
expenses and operating costs divided by performance. For accuracy, the calculation takes into
inherent effects due to hardware depreciation and maintenance repairs. At the data centers, the
primary cost factor is capital expenditure credited to hardware, followed by personnel and
hosting costs (Barozzo, et al., 2003).
FIGURE 5. Equation for Calculating IT Cost at Google
Cost = Capital Expense + Operating Cost
Query Performance
Source: Barroso, et al, 2003.
To address the reliability problem with commodity PCs, Google solves the issue mainly in
software by implementing reliability and redundancy functionality in its architecture. Similar to
reducing operational costs in hardware, Google adopts numerous open-source software solutions
with available software functionalities and libraries. In many instances, when Google uses a
particular open-source project rigorously, the company would hire active developers from the
open source project and bring them on board. For example, lead software architect and guru
programmers for open source projects such as Mozilla Firefox, Camino, and Gaim have joined
Google in the past two years (Table 6). The software engineering process at Google focuses
highly on programmer productivity with developers responsible for writing software. A separate
team takes the responsibility of making the software distributed and run in parallel. Even an
increased productivity of a few percent in programming time can result in thousands of dollars in
savings. The CFO of Google, George Reyes, describes “Revenue per employee [as] a key metric.
Google's revenue per employee is double that of its competitors, a comparison of $1.44 million
per head versus $700,000 per head for rivals.”8
Software Technology
A large portion of IT at Google depends on complex software components and architecture
design. Generally, a search engine is a program that helps find information stored on a computer
system. Three important steps in software technology are essential for developing a web-based
search engine. These operations are web page crawling, indexing, and searching. The non-stop
“web crawler” collects documents from the web. The information is stored in a searchable index,
and a metric for finding desired result is computed based upon user query. One of Google’s co-
founders, Sergey Brin, wrote a web crawler to find and store web page indexes that later became
Googlebot, while Larry Page, Google’s other co-founder, came up with a unique technique to
calculate web page relevance called PageRank. 9
15
When user sends a search query to the Google web server, the text query gets extracted by an
intelligent parser that correspondingly executes other ancillary tasks such as spell-checking to
ensure the query is a valid entry prior to performing the actual search. Index servers first map
the query word to a list of documents and assign relevance scores for each document. When this
phase is done, the document servers then fetch each document from disk to extract the title and
other relevant keyword snippets from the web page. Replication of data is necessary to ensure
fast performance and reliability. Google has stored multiple copies of web content across many
clusters. Load balancing is an important characteristic to perform all of the operations described
above. Once the result for a search lookup is determined, a web page response is generated and
displayed on the web browser as output. Along with document and index servers for web search,
Google has other servers including images, news, and advertising as shown in Figure 6.
FIGURE 6. Google Search Query Architecture
Google Web Server
Conversion Tools
Ad server
User Query
Document
Servers
Index
Servers
News server
Spell checker
Image Server
Similar to other search engines, Google has more than 150 criteria to determine relevancy of a
web page. However, PageRank is the most essential criterion for accurate results, and is the core
technology that differentiates Google’s search engine from its competitors. 10 PageRank uses a
family of algorithms that calculates the ratio of the number of outgoing vs. ingoing links to a web
page, and assigns numerical weight for the indexed web pages (to intuitively understand how
PageRank works, see Appendix One). Calculating outgoing and ingoing links may seem to be a
trivial operation, but the technique becomes computationally demanding and difficult as Google
needs to analyze billions of web pages, perform calculations, and assign a ranking score for all of
the web pages collected. The fundamental mathematical formula used by PageRank has been
published by the Google co-founders through academic research papers and various web
postings that contain discussions on the topic. However, competitors are still not able to imitate
a search engine using the PageRank concept as efficiently as Google since numerous
optimizations in the mathematical algorithm are necessary to calculate large-scale web pages
along with other software tools for creating efficient and scalable distributed system.
When user sends a search query to the Google web server, the text query gets extracted by an
intelligent parser that correspondingly executes other ancillary tasks such as spell-checking to
ensure the query is a valid entry prior to performing the actual search. Index servers first map
the query word to a list of documents and assign relevance scores for each document. When this
phase is done, the document servers then fetch each document from disk to extract the title and
other relevant keyword snippets from the web page. Replication of data is necessary to ensure
fast performance and reliability. Google has stored multiple copies of web content across many
clusters. Load balancing is an important characteristic to perform all of the operations described
above. Once the result for a search lookup is determined, a web page response is generated and
displayed on the web browser as output. Along with document and index servers for web search,
Google has other servers including images, news, and advertising as shown in Figure 6.
FIGURE 6. Google Search Query Architecture
Google Web Server
Conversion Tools
Ad server
User Query
Document
Servers
Index
Servers
News server
Spell checker
Image Server
Similar to other search engines, Google has more than 150 criteria to determine relevancy of a
web page. However, PageRank is the most essential criterion for accurate results, and is the core
technology that differentiates Google’s search engine from its competitors. 10 PageRank uses a
family of algorithms that calculates the ratio of the number of outgoing vs. ingoing links to a web
page, and assigns numerical weight for the indexed web pages (to intuitively understand how
PageRank works, see Appendix One). Calculating outgoing and ingoing links may seem to be a
trivial operation, but the technique becomes computationally demanding and difficult as Google
needs to analyze billions of web pages, perform calculations, and assign a ranking score for all of
the web pages collected. The fundamental mathematical formula used by PageRank has been
published by the Google co-founders through academic research papers and various web
postings that contain discussions on the topic. However, competitors are still not able to imitate
a search engine using the PageRank concept as efficiently as Google since numerous
optimizations in the mathematical algorithm are necessary to calculate large-scale web pages
along with other software tools for creating efficient and scalable distributed system.
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16
During the late 1990s, Google realized that a major problem with search engines in the foreseen
future was scale. The quality of search results depend not only on the methodology used for
ranking web pages, but on quantity or amount of data sets the system is able to process.
Intuitively, the larger set of information coverage, the better. In 1997, a research paper published
by Brin and Page describes the important problem of achieving scale as “Storage space must be
used efficiently to store indices...indexing system must process hundreds of gigabytes of data
efficiently. Queries must be handled quickly, at a rate of hundreds to thousands per second”
(Brin & Page, 1997). Achieving scale is critical for the ever increasing computational capacity
demanded by many of Google’s products and services, led by the search engine. Jeff Dean, a
Google Fellow, says, “At Google, everything is about scale.” 11 To address the scalability issue,
an efficient file system capable of maintaining terabytes of data across multiple storage locations
is needed to store all of the collected indexes for calculating and retrieving user queries.
Optimizations in data extraction utilities were developed to speed up processing large data sets.
Eventually, this led to two important software developments internally at Google: the creation of
a new file system called Google File System and a data processing tool known as MapReduce.
The Google File System (GFS) is a scalable distributed file system designed and developed
internally that suits the need of large data-intensive applications. GFS was implemented based
on observations of application need for concurrently accessing several large gigabyte-size data
files across terabytes of storage disks spread over thousands of machines (Ghemawat, et al.,
2003). Individual files are broken up into fixed size chucks and assigned a unique identifier
label for later retrieval. Permissions for data access are set to “read-only.” Only when a “write
operation” is needed as in the case of storing a new file, specific permissions are then granted by
the master server.12
Google uses MapReduce, a programming tool developed in C++ that implements parallel
computations for large data sets greater than one terabyte. v As described by Jeff Dean, one of
the main architects behind MapReduce, “The run-time system takes care of the details of
partitioning the input data, scheduling the program’s execution across a set of machines,
handling machine failures, and managing the required inter-machine communication. This
enables programmers without any experience in parallel and distributed systems to easily utilize
the resources of a large distributed system” (Dean & Ghemawat, 2004). Within Google,
MapReduce has been used by its programmers in a wide variety of applications including web
access log statistics and document clustering.13
A major portion of software engineering practices at Google is focused on writing code and
developing new software web-based applications rather than traditional standalone applications
that run on local machines. Following the theme of speed in its search engines, these
applications need to run quickly and efficiently. In particular, many web-based applications
offered in Google’s products and services use an innovative software design methodology known
as Asynchronous JavaScript and XML (AJAX). AJAX is a web development technique for
creating interactive web-based applications while refreshing the page, and has been used in a
number of Google products including GMail, Google Earth, and Google Finance. Sergey Brin
v A “terabyte” is a unit of computer storage totaling 240 bytes and is equivalent to 1,024 gigabytes. The terminology
of “Map” and “Reduce” traces roots from concepts in functional programming languages.
During the late 1990s, Google realized that a major problem with search engines in the foreseen
future was scale. The quality of search results depend not only on the methodology used for
ranking web pages, but on quantity or amount of data sets the system is able to process.
Intuitively, the larger set of information coverage, the better. In 1997, a research paper published
by Brin and Page describes the important problem of achieving scale as “Storage space must be
used efficiently to store indices...indexing system must process hundreds of gigabytes of data
efficiently. Queries must be handled quickly, at a rate of hundreds to thousands per second”
(Brin & Page, 1997). Achieving scale is critical for the ever increasing computational capacity
demanded by many of Google’s products and services, led by the search engine. Jeff Dean, a
Google Fellow, says, “At Google, everything is about scale.” 11 To address the scalability issue,
an efficient file system capable of maintaining terabytes of data across multiple storage locations
is needed to store all of the collected indexes for calculating and retrieving user queries.
Optimizations in data extraction utilities were developed to speed up processing large data sets.
Eventually, this led to two important software developments internally at Google: the creation of
a new file system called Google File System and a data processing tool known as MapReduce.
The Google File System (GFS) is a scalable distributed file system designed and developed
internally that suits the need of large data-intensive applications. GFS was implemented based
on observations of application need for concurrently accessing several large gigabyte-size data
files across terabytes of storage disks spread over thousands of machines (Ghemawat, et al.,
2003). Individual files are broken up into fixed size chucks and assigned a unique identifier
label for later retrieval. Permissions for data access are set to “read-only.” Only when a “write
operation” is needed as in the case of storing a new file, specific permissions are then granted by
the master server.12
Google uses MapReduce, a programming tool developed in C++ that implements parallel
computations for large data sets greater than one terabyte. v As described by Jeff Dean, one of
the main architects behind MapReduce, “The run-time system takes care of the details of
partitioning the input data, scheduling the program’s execution across a set of machines,
handling machine failures, and managing the required inter-machine communication. This
enables programmers without any experience in parallel and distributed systems to easily utilize
the resources of a large distributed system” (Dean & Ghemawat, 2004). Within Google,
MapReduce has been used by its programmers in a wide variety of applications including web
access log statistics and document clustering.13
A major portion of software engineering practices at Google is focused on writing code and
developing new software web-based applications rather than traditional standalone applications
that run on local machines. Following the theme of speed in its search engines, these
applications need to run quickly and efficiently. In particular, many web-based applications
offered in Google’s products and services use an innovative software design methodology known
as Asynchronous JavaScript and XML (AJAX). AJAX is a web development technique for
creating interactive web-based applications while refreshing the page, and has been used in a
number of Google products including GMail, Google Earth, and Google Finance. Sergey Brin
v A “terabyte” is a unit of computer storage totaling 240 bytes and is equivalent to 1,024 gigabytes. The terminology
of “Map” and “Reduce” traces roots from concepts in functional programming languages.
17
has confidence in his company’s expertise in AJAX technologies and its ability to overcome
technical difficulties internally: “[our] company has had good experience with AJAX. There are
important technical challenges to overcome with some technologies but no impediments that
can't be overcome…For the performance-critical areas, the company uses its own internal
solutions” (Mills, 2006b). The primary operating system used by Google engineers is based on
the Linux platform. In particular Ubuntu Linux distribution is popular within Google.
Technology Infrastructure
Delivering fast search results not only requires software optimizations, but also a lot of hardware
computing power to do the task. Google uses typical Intel x86-based PCs to function as servers.
The benefits of falling prices in commodity PCs, increasing computing processing power,
increasing storage capacity, and other component upgrades are major cost-saving advantages for
Google’s IT. The computational framework for delivering high-performance computing at
Google is made possible by using low-cost hardware. In order to save software costs and to
allow the commodity PCs to function together in a distributed manner, machines at the data
centers run customized versions of the Linux operating system. Google has researchers within
the company to measure performance benchmarks by taking empirical measurements to calculate
complex hardware metrics such as CPU execution time and clock cycles per instruction.
In the early stages as a research project, Google’s data center drew on Stanford University’s
computing resources or equipment donated by the industry. When Google was downloading
web pages from the Internet, Stanford University was generous in lending huge chunks of
network bandwidth for the project. In fact, there were numerous occasions when Google’s
network bandwidth usage took all of the university’s network capacity and shut down the entire
campus network (Battelle, 2005). When Google transcended from a research project to a
commercial product, it had to look for outside data center vendors.
To gather all of the old and new documents collected from the web, Google runs a large number
of server farms in the data centers. These data centers are located at different regions within the
United States and around the world. Some estimate that Google has more than two dozen data
centers across the world to date. Many of the data centers are served by different network
service providers to reduce catastrophic downtime.20
A main data center hub is located in the Silicon Valley which serves California, while the other
major data center is located in Virginia, which is connected to the data centers in Europe (Vise &
Malseed, 2005). The computing framework in Figure 7 shows that individual data centers serve
users in proximity areas.
has confidence in his company’s expertise in AJAX technologies and its ability to overcome
technical difficulties internally: “[our] company has had good experience with AJAX. There are
important technical challenges to overcome with some technologies but no impediments that
can't be overcome…For the performance-critical areas, the company uses its own internal
solutions” (Mills, 2006b). The primary operating system used by Google engineers is based on
the Linux platform. In particular Ubuntu Linux distribution is popular within Google.
Technology Infrastructure
Delivering fast search results not only requires software optimizations, but also a lot of hardware
computing power to do the task. Google uses typical Intel x86-based PCs to function as servers.
The benefits of falling prices in commodity PCs, increasing computing processing power,
increasing storage capacity, and other component upgrades are major cost-saving advantages for
Google’s IT. The computational framework for delivering high-performance computing at
Google is made possible by using low-cost hardware. In order to save software costs and to
allow the commodity PCs to function together in a distributed manner, machines at the data
centers run customized versions of the Linux operating system. Google has researchers within
the company to measure performance benchmarks by taking empirical measurements to calculate
complex hardware metrics such as CPU execution time and clock cycles per instruction.
In the early stages as a research project, Google’s data center drew on Stanford University’s
computing resources or equipment donated by the industry. When Google was downloading
web pages from the Internet, Stanford University was generous in lending huge chunks of
network bandwidth for the project. In fact, there were numerous occasions when Google’s
network bandwidth usage took all of the university’s network capacity and shut down the entire
campus network (Battelle, 2005). When Google transcended from a research project to a
commercial product, it had to look for outside data center vendors.
To gather all of the old and new documents collected from the web, Google runs a large number
of server farms in the data centers. These data centers are located at different regions within the
United States and around the world. Some estimate that Google has more than two dozen data
centers across the world to date. Many of the data centers are served by different network
service providers to reduce catastrophic downtime.20
A main data center hub is located in the Silicon Valley which serves California, while the other
major data center is located in Virginia, which is connected to the data centers in Europe (Vise &
Malseed, 2005). The computing framework in Figure 7 shows that individual data centers serve
users in proximity areas.
18
FIGURE 7. Google Computing Framework
XML
HTML
Atom
WSDL
POP3/
SMTP
Ad
System
Google
Linux
Google
News
GMail
Google
Mobile
Google
Video
Google
Maps
Google
Images
Google
TalkBook
Search
Data
Center Data
Center
Data
Center
Data
Center
Data
Center
Data
Center
Data
Center
Source: Arnold, 2005.
Although it is difficult to know the configuration of Google’s data center today, historical
information is available for discussion. As of 2000, Google had over 6,000 processors with disk
storage reaching the one petabyte milestone, likely one of the highest storage networks in the
private industry, and comparable to supercomputer research center sites in the U.S. vi In addition,
a data center has minimally 40 racks with each rack containing 80 PCs. To support connectivity
between PCs, each PC has at least two Gigabit/sec Ethernet interfaces that are individually
connected to two high capacity Cisco switches (Figure 8) (Patterson & Hennessy, 2004).
vi A “petabyte” is a unit of computer storage totaling 250 bytes and is equivalent to 1,024 terabytes.
FIGURE 7. Google Computing Framework
XML
HTML
Atom
WSDL
POP3/
SMTP
Ad
System
Linux
News
GMail
Mobile
Video
Maps
Images
TalkBook
Search
Data
Center Data
Center
Data
Center
Data
Center
Data
Center
Data
Center
Data
Center
Source: Arnold, 2005.
Although it is difficult to know the configuration of Google’s data center today, historical
information is available for discussion. As of 2000, Google had over 6,000 processors with disk
storage reaching the one petabyte milestone, likely one of the highest storage networks in the
private industry, and comparable to supercomputer research center sites in the U.S. vi In addition,
a data center has minimally 40 racks with each rack containing 80 PCs. To support connectivity
between PCs, each PC has at least two Gigabit/sec Ethernet interfaces that are individually
connected to two high capacity Cisco switches (Figure 8) (Patterson & Hennessy, 2004).
vi A “petabyte” is a unit of computer storage totaling 250 bytes and is equivalent to 1,024 terabytes.
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FIGURE 8. Google Data Center PC Cluster vii
Source: Patterson & Hennessy, 2004.
In a normal scenario, Google upgrades machines in its data center every two to three months,
mainly to increase processing power and storage capacity. By far, most of the computing
resource utilization in its data centers derive from the search engine’s persistent web crawler, and
less so on the millions of daily user query computations. To handle the workload, Google’s IT
infrastructure is believed to have 100,000+ PCs as of April 2004 and as many as 250,000 PCs by
the end of 2004 (Ferguson, 2005). Some estimate that these numbers may double roughly every
nine months as the search engine continues to crawl, index, and search the billions of new web
pages. Having more machines to maintain may seem to burden the IT department, but in fact the
issue is not very problematic since thousands of servers in each data center have identical
configurations.
Although using “white box” hardware helps Google reduce costs, it comes with its drawbacks.
Commodity PCs are less reliable and more prone to problems. A number of PCs are rebooted on
a daily basis due to either software or hardware failures. Hardware attributes about one-tenth of
the failures and about two to three percent of the PCs need to be replaced per year. DRAM
accounts for 95% of all failures (Vise & Malseed, 2005). However, Google takes extreme
precautions for these failures and have developed mechanisms to allow fault-tolerance in their
distributed system. For example, to overcome rack or data center failure, Google’s customized
Linux operating system has the ability to automatically replicate data files across different
storage devices to at least three other data center locations (Arnold, 2005).
Another major drawback with PCs is higher power usage than typical commercial data centers
since they use suboptimal power supplies with relatively simple packaging and cooling devices.
Energy efficiency is critical to Google’s IT operation due to high power consumption. The
purchasing of hardware contributes largely to the IT costs at Google. However, the power costs
of running these servers may become an increasing concern since it requires a huge amount of
power consumption (Shankland, 2005). While cost per MBit/second is decreasing, cost per
kilowatt hour is increasing. To address this issue, Google has made it a priority to purchase
machines that offer the best watts per unit of performance. Some of the other major issues in
vii The data center diagram as of 2000. OC12 and OC48 are fiber optic lines that support network link speed of 622
Mbit and 2.4Gbit. Fx = network switches, R = racks that contain stacks of PCs.
FIGURE 8. Google Data Center PC Cluster vii
Source: Patterson & Hennessy, 2004.
In a normal scenario, Google upgrades machines in its data center every two to three months,
mainly to increase processing power and storage capacity. By far, most of the computing
resource utilization in its data centers derive from the search engine’s persistent web crawler, and
less so on the millions of daily user query computations. To handle the workload, Google’s IT
infrastructure is believed to have 100,000+ PCs as of April 2004 and as many as 250,000 PCs by
the end of 2004 (Ferguson, 2005). Some estimate that these numbers may double roughly every
nine months as the search engine continues to crawl, index, and search the billions of new web
pages. Having more machines to maintain may seem to burden the IT department, but in fact the
issue is not very problematic since thousands of servers in each data center have identical
configurations.
Although using “white box” hardware helps Google reduce costs, it comes with its drawbacks.
Commodity PCs are less reliable and more prone to problems. A number of PCs are rebooted on
a daily basis due to either software or hardware failures. Hardware attributes about one-tenth of
the failures and about two to three percent of the PCs need to be replaced per year. DRAM
accounts for 95% of all failures (Vise & Malseed, 2005). However, Google takes extreme
precautions for these failures and have developed mechanisms to allow fault-tolerance in their
distributed system. For example, to overcome rack or data center failure, Google’s customized
Linux operating system has the ability to automatically replicate data files across different
storage devices to at least three other data center locations (Arnold, 2005).
Another major drawback with PCs is higher power usage than typical commercial data centers
since they use suboptimal power supplies with relatively simple packaging and cooling devices.
Energy efficiency is critical to Google’s IT operation due to high power consumption. The
purchasing of hardware contributes largely to the IT costs at Google. However, the power costs
of running these servers may become an increasing concern since it requires a huge amount of
power consumption (Shankland, 2005). While cost per MBit/second is decreasing, cost per
kilowatt hour is increasing. To address this issue, Google has made it a priority to purchase
machines that offer the best watts per unit of performance. Some of the other major issues in
vii The data center diagram as of 2000. OC12 and OC48 are fiber optic lines that support network link speed of 622
Mbit and 2.4Gbit. Fx = network switches, R = racks that contain stacks of PCs.
20
data center operations include heat generated by racks, and lack of network management tools to
monitor all hardware failures automatically. Google works alongside with third party data
centers to improve server racks, cooling devices such as fans, placement of cables, and optimal
data center layouts. Some of these components are custom-built specifically to solve the heating
problem.
Both software and hardware play an important role in Google’s information technology. In
software, high-performance is vital, while in hardware cost reduction is crucial (Table 8). The
use of software and hardware IT at Google is inherently strategic to the company’s success in
delivering products and services that are fast and accurate. Beyond the importance of PageRank
technology, software and hardware practices at Google are likewise worthy differentiators from
other competitors that are unable to replicate the process.
TABLE 8. Google’s Software and Hardware IT Strategy viii
Software (high performance) Hardware (cost reduction)
Google Linux Operating System Commodity PC and PC Components
Google File System Use Standardized Devices
MapReduce Libraries PC Clusters
Programming Models Automatic Backups
Intelligent System Geographic Distribution
Replication and Redundancy Co-location Sites
FIRM GROWTH
Financial Performance
Google was first funded by angel investors that include corporate executives and retired
technologists. The first capital for Google occurred on August 1998 in the amount of $100,000
from Andy Bechtolsheim, a co-founder of SUN Microsystems. Shortly thereafter in September
1998, Google raised another $1 million from other private investors including David Cheriton
from Netscape and Amazon executive, Ram Shriram (Rivlin, 2004). In early 1999, Google went
through a round of venture capital funding, raising $25 million from Sequoia Capital, Kleiner
Perkins Caufield & Byers (KPCB), and a few private investors. When news spread that Google
received funding from the prestigious venture capital firms, many technologists and investors in
Silicon Valley took a closer look at Google.
Unlike many start-up companies that were greatly impacted by the dot-com bubble, Google grew
slowly, yet steadily, with positive cash flow. Google began to generate robust advertising
revenues in 2002, mainly through google.com. By 2003 and 2004, the company achieved over
100% annual growth in advertising revenues from both its Google site and partner network
(Figure 9). Google maintained very healthy revenue growth from 2002 to 2005 with over $6
billion in revenues by the end of fiscal year 2005 (Figure 10).
viii This table is a modified version of a software/hardware fusion diagram from reference33.
data center operations include heat generated by racks, and lack of network management tools to
monitor all hardware failures automatically. Google works alongside with third party data
centers to improve server racks, cooling devices such as fans, placement of cables, and optimal
data center layouts. Some of these components are custom-built specifically to solve the heating
problem.
Both software and hardware play an important role in Google’s information technology. In
software, high-performance is vital, while in hardware cost reduction is crucial (Table 8). The
use of software and hardware IT at Google is inherently strategic to the company’s success in
delivering products and services that are fast and accurate. Beyond the importance of PageRank
technology, software and hardware practices at Google are likewise worthy differentiators from
other competitors that are unable to replicate the process.
TABLE 8. Google’s Software and Hardware IT Strategy viii
Software (high performance) Hardware (cost reduction)
Google Linux Operating System Commodity PC and PC Components
Google File System Use Standardized Devices
MapReduce Libraries PC Clusters
Programming Models Automatic Backups
Intelligent System Geographic Distribution
Replication and Redundancy Co-location Sites
FIRM GROWTH
Financial Performance
Google was first funded by angel investors that include corporate executives and retired
technologists. The first capital for Google occurred on August 1998 in the amount of $100,000
from Andy Bechtolsheim, a co-founder of SUN Microsystems. Shortly thereafter in September
1998, Google raised another $1 million from other private investors including David Cheriton
from Netscape and Amazon executive, Ram Shriram (Rivlin, 2004). In early 1999, Google went
through a round of venture capital funding, raising $25 million from Sequoia Capital, Kleiner
Perkins Caufield & Byers (KPCB), and a few private investors. When news spread that Google
received funding from the prestigious venture capital firms, many technologists and investors in
Silicon Valley took a closer look at Google.
Unlike many start-up companies that were greatly impacted by the dot-com bubble, Google grew
slowly, yet steadily, with positive cash flow. Google began to generate robust advertising
revenues in 2002, mainly through google.com. By 2003 and 2004, the company achieved over
100% annual growth in advertising revenues from both its Google site and partner network
(Figure 9). Google maintained very healthy revenue growth from 2002 to 2005 with over $6
billion in revenues by the end of fiscal year 2005 (Figure 10).
viii This table is a modified version of a software/hardware fusion diagram from reference33.
21
FIGURE 9. Advertising Revenues
Source: Google Analyst Day, slide presentation, March 2006.
FIGURE 10. Revenue Growth
Source: Google Analyst Day, slide presentation, March 2006.
For several years, Google enjoyed being a private company without having to disclose financial
and other information to the public. However, in April 2004 Google filed with the SEC to
become public later that summer to raise $2.7 billion in order to reward its employees and
investors. However, the IPO process took an unconventional Dutch-auction method where
normal individual investors along with financial institutions can participate in purchasing Google
IPO shares online. Besides not following the typical Wall Street IPO process, remarkably,
Google sold only Class A shares while its management retained all Class B shares, in which
Class B shares has ten times more voting rights. This essentially means that the Google
management team retains majority control of the company and its board of directors when the
company becomes public.
FIGURE 9. Advertising Revenues
Source: Google Analyst Day, slide presentation, March 2006.
FIGURE 10. Revenue Growth
Source: Google Analyst Day, slide presentation, March 2006.
For several years, Google enjoyed being a private company without having to disclose financial
and other information to the public. However, in April 2004 Google filed with the SEC to
become public later that summer to raise $2.7 billion in order to reward its employees and
investors. However, the IPO process took an unconventional Dutch-auction method where
normal individual investors along with financial institutions can participate in purchasing Google
IPO shares online. Besides not following the typical Wall Street IPO process, remarkably,
Google sold only Class A shares while its management retained all Class B shares, in which
Class B shares has ten times more voting rights. This essentially means that the Google
management team retains majority control of the company and its board of directors when the
company becomes public.
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Prior to the IPO, Google received a lot of media attention and created a website solely discussing
the event. ix On August 13 th, 2004, Google went public on the Nasdaq Stock Market under the
symbol GOOG with a selling price set at $85 per share. At the close of the IPO, Google raised
$1.67 billion from the public. As of 2006, Google’s stock price was around $300 to $500 per
share. Many investors have complained that Google’s stock has become too expensive to
purchase, at least from the number value perspective. The Google management does not believe
in stock splits to lower cost of their stock price while increasing the number of shares. In fact,
Brin and Page have quoted billionaire investor, Warren Buffet, as their role model and would
like Google to follow the same financial methodology that was set for Berkshire Hathaway
holding company on the opposition of stock splits (Mills, 2006a).
Global Expansion
The international markets are critical for many technology companies in expanding new business
opportunities and generating more revenues. Similarly, this principle is reminiscent in Google’s
case, as the international markets contribute from 30% to 40% of the company’s total revenues
every quarter for the past two years.4 In order to tap into the international market, Google’s
search engine has been translated to allow multi-language search capabilities, while maintaining
its philosophy of objective and unbiased search results (Brin, 2001). The strong international
markets for Google include the United Kingdom, Western Europe, Japan, Canada, and Australia.
Google has transformed from a start-up firm to a multi-national corporation; however, the
majority of its employees are still based in the Mountain View headquarters. Google has
international presence in all continents of the world other than Africa and Antarctica. However,
the location of its international employee base is divided into two primary groups: engineering
and product development team, and a sales force team (Table 9). Google offers customer
interfaces in over 40 different languages and close to 50 different currency exchanges to date.
TABLE 9. Google International Locations
Continent Engineering and Product Developments Sales Force
North America U.S. - Mountain View, CA (Headquarter),
Kirkland, WA, Phoenix, AZ, Pittsburgh,
PA, New York, NY, Santa Monica, CA,
Others - Waterloo, Canada
U.S. – 14 different sites
Others - Toronto, Canada, Montreal, Canada
Mexico City, Mexico
South America Belo Horizonte, Brazil Sao Paulo, Brazil
Asia India - Bangalore, Hyderabad
Others - Beijing, China, Tokyo, Japan,
Taipei, Taiwan
India - Hyderabad, Delhi, Mumbai, India
Others - Tokyo, Japan, Seoul, Korea, Hong
Kong, China
Europe London, U.K., Munich, Germany,
Trondheim, Norway, Zurich, Switzerland
Copenhagen, Denmark, Paris, France, Hamburg,
Germany, Amsterdam, Netherlands, Madrid,
Spain, Stockholm, Sweden, Zurich, Switzerland,
Istanbul, Turkey, London, UK, Manchester, UK,
Tel Aviv, Israel, Dublin, Ireland, Milan, Italy,
Rome, Italy
Australia None Melbourne, Sydney
Source: Various news sources
ix The website on Google’s Initial Public Offering, http://www.ipogoogle.org/
Prior to the IPO, Google received a lot of media attention and created a website solely discussing
the event. ix On August 13 th, 2004, Google went public on the Nasdaq Stock Market under the
symbol GOOG with a selling price set at $85 per share. At the close of the IPO, Google raised
$1.67 billion from the public. As of 2006, Google’s stock price was around $300 to $500 per
share. Many investors have complained that Google’s stock has become too expensive to
purchase, at least from the number value perspective. The Google management does not believe
in stock splits to lower cost of their stock price while increasing the number of shares. In fact,
Brin and Page have quoted billionaire investor, Warren Buffet, as their role model and would
like Google to follow the same financial methodology that was set for Berkshire Hathaway
holding company on the opposition of stock splits (Mills, 2006a).
Global Expansion
The international markets are critical for many technology companies in expanding new business
opportunities and generating more revenues. Similarly, this principle is reminiscent in Google’s
case, as the international markets contribute from 30% to 40% of the company’s total revenues
every quarter for the past two years.4 In order to tap into the international market, Google’s
search engine has been translated to allow multi-language search capabilities, while maintaining
its philosophy of objective and unbiased search results (Brin, 2001). The strong international
markets for Google include the United Kingdom, Western Europe, Japan, Canada, and Australia.
Google has transformed from a start-up firm to a multi-national corporation; however, the
majority of its employees are still based in the Mountain View headquarters. Google has
international presence in all continents of the world other than Africa and Antarctica. However,
the location of its international employee base is divided into two primary groups: engineering
and product development team, and a sales force team (Table 9). Google offers customer
interfaces in over 40 different languages and close to 50 different currency exchanges to date.
TABLE 9. Google International Locations
Continent Engineering and Product Developments Sales Force
North America U.S. - Mountain View, CA (Headquarter),
Kirkland, WA, Phoenix, AZ, Pittsburgh,
PA, New York, NY, Santa Monica, CA,
Others - Waterloo, Canada
U.S. – 14 different sites
Others - Toronto, Canada, Montreal, Canada
Mexico City, Mexico
South America Belo Horizonte, Brazil Sao Paulo, Brazil
Asia India - Bangalore, Hyderabad
Others - Beijing, China, Tokyo, Japan,
Taipei, Taiwan
India - Hyderabad, Delhi, Mumbai, India
Others - Tokyo, Japan, Seoul, Korea, Hong
Kong, China
Europe London, U.K., Munich, Germany,
Trondheim, Norway, Zurich, Switzerland
Copenhagen, Denmark, Paris, France, Hamburg,
Germany, Amsterdam, Netherlands, Madrid,
Spain, Stockholm, Sweden, Zurich, Switzerland,
Istanbul, Turkey, London, UK, Manchester, UK,
Tel Aviv, Israel, Dublin, Ireland, Milan, Italy,
Rome, Italy
Australia None Melbourne, Sydney
Source: Various news sources
ix The website on Google’s Initial Public Offering, http://www.ipogoogle.org/
23
THREATS AND CHALLENGES
Business Risks
Google is vulnerable in various aspects. Weak customer lock-in, eroding public trust, lawsuits,
and too much dependence on search advertising are risks that the company faces. Google’s stock
price has been viewed as overvalued by many financial analysts and resulted in a recent decline.
Google has almost twice as many search advertising click-through as its nearest competitor;
however, they lack maturity and customer lock-in that Yahoo possesses. Yahoo has the
advantage of having over 141 million customer profiles that can be integrated with their search
engine to customize search results tailored for individual interests. Google only began
subscribing customers via GMail and its personalized homepage for users.
The competitive threat from Microsoft is foreboding. Microsoft is expected to aggressively
compete head to head with Google by leveraging its Windows monopoly to win the search
market. Microsoft’s search engine will be embedded into the core of Microsoft’s next-
generation operating system, Windows Vista. At a technology conference in March 2006, Neil
Holloway, Microsoft President for Europe, Middle East and Africa indicates, "What we're saying
is that in six months' time we'll be more relevant in the U.S. market place than Google" (Reuters,
2006a). Only time will tell whether Microsoft is able to compete successfully in the search
market, Microsoft certainly has scale, industry influence, and capital. They can quickly ramp up
using its $7 billion plus budget in R&D annually. Steve Ballmer, CEO of Microsoft, has
acknowledged that in recent years Microsoft has not been spending enough R&D in the area of
search technology, and has promised to put a big emphasis on it in the future (Linn, 2004).
Microsoft is known to setup a R&D center on search technology in Mountain View, California.
While Yahoo and Microsoft’s MSN are leading the assault as large companies in search engines,
there are many new start-ups in the search industry that specialize in niche search capabilities
(Table 10). Larry Ellison, CEO of Oracle, has claimed that Oracle will be filling the gap in
enterprise search business, a market that Google has not penetrated rigorously (Reuters, 2006b).
In order for Google to stay ahead of its competitors, it must broaden its horizons. “Google needs
to make that leap into display advertising,” says Charlene Li, a Forrester Research analyst.
“Right now, their advertising base is really comprised of direct marketers, not traditional brand
marketers, and they really don't have the expertise and credibility that Microsoft and Yahoo and
AOL have in that area” (Elgin, 2004). Google is beginning to diversify its revenue stream by
branching into different areas of advertising. Google Video, a pay-for-video service allows
content owners to charge fees for users to watch programs on their PCs. Content include NBA
basketball games, music videos, news, and CBS prime-time shows. Google’s acquisition of
dMarc is also evidence of its efforts to expand its customer base to attract the offline customers
as well, specifically through the radio broadcast medium.
THREATS AND CHALLENGES
Business Risks
Google is vulnerable in various aspects. Weak customer lock-in, eroding public trust, lawsuits,
and too much dependence on search advertising are risks that the company faces. Google’s stock
price has been viewed as overvalued by many financial analysts and resulted in a recent decline.
Google has almost twice as many search advertising click-through as its nearest competitor;
however, they lack maturity and customer lock-in that Yahoo possesses. Yahoo has the
advantage of having over 141 million customer profiles that can be integrated with their search
engine to customize search results tailored for individual interests. Google only began
subscribing customers via GMail and its personalized homepage for users.
The competitive threat from Microsoft is foreboding. Microsoft is expected to aggressively
compete head to head with Google by leveraging its Windows monopoly to win the search
market. Microsoft’s search engine will be embedded into the core of Microsoft’s next-
generation operating system, Windows Vista. At a technology conference in March 2006, Neil
Holloway, Microsoft President for Europe, Middle East and Africa indicates, "What we're saying
is that in six months' time we'll be more relevant in the U.S. market place than Google" (Reuters,
2006a). Only time will tell whether Microsoft is able to compete successfully in the search
market, Microsoft certainly has scale, industry influence, and capital. They can quickly ramp up
using its $7 billion plus budget in R&D annually. Steve Ballmer, CEO of Microsoft, has
acknowledged that in recent years Microsoft has not been spending enough R&D in the area of
search technology, and has promised to put a big emphasis on it in the future (Linn, 2004).
Microsoft is known to setup a R&D center on search technology in Mountain View, California.
While Yahoo and Microsoft’s MSN are leading the assault as large companies in search engines,
there are many new start-ups in the search industry that specialize in niche search capabilities
(Table 10). Larry Ellison, CEO of Oracle, has claimed that Oracle will be filling the gap in
enterprise search business, a market that Google has not penetrated rigorously (Reuters, 2006b).
In order for Google to stay ahead of its competitors, it must broaden its horizons. “Google needs
to make that leap into display advertising,” says Charlene Li, a Forrester Research analyst.
“Right now, their advertising base is really comprised of direct marketers, not traditional brand
marketers, and they really don't have the expertise and credibility that Microsoft and Yahoo and
AOL have in that area” (Elgin, 2004). Google is beginning to diversify its revenue stream by
branching into different areas of advertising. Google Video, a pay-for-video service allows
content owners to charge fees for users to watch programs on their PCs. Content include NBA
basketball games, music videos, news, and CBS prime-time shows. Google’s acquisition of
dMarc is also evidence of its efforts to expand its customer base to attract the offline customers
as well, specifically through the radio broadcast medium.
24
TABLE 10. Start-up Search Firms
Company Name Search Techniques
A2B Location Search
Accoona Artificial Intelligence/Semantic Search
Blinkx Media and Implicit Search
Gravee Social Search
Grokker Enterprise Search
Kosmix Health Search
Nexidia Media Search
PageBull Visual Search
PubSub Weblog and Newsgroup Search
Riya Photo Search
Simplyhired Job Search
SurfWax Targeted Search
Teoma Clustering Categorization
Transparensee Systems Relevant Matching
Trulia Real Estate Search
Truveo Video Search
Vast Classified Search
Vivisimo Clustering Categorization
Wisenut Vertical Category Search
Source: Various news sources
Then, there are political, copyright, and privacy issues that Google constantly deals with.
Google has been the subject of much debate at GMail’s release, as the correlation between
GMail and Google’s search poses enormous privacy risks. A California state senator proposed a
law to ban advertising function where Google sponsored ads is displayed based on keywords
found in an email read. Privacy advocates addressed the danger of having personal email
retained in Google’s servers even after being deleted by the user explicitly. 14 However, many
critics are triggered by public reaction to information stored on external computers that
sometimes fall into the wrong hands. Computer users should be aware of the perils they
potentially face and should not expect more privacy in an email than sending a telegram or
postcard. Google also faced an onslaught of lawsuits, especially over the past 18 months
(LaPlante, 2006). There have been numerous occasions when Google’s AdWords customers had
to pay for clicks that turned out to be fraudulent or manipulated in some way. Other threats
include allegations of stolen source code in their Orkut software; “Google bombing” where some
users deliberately undermine the effectiveness of the PageRank algorithm by changing site
linkages to web pages to gain ranking scores; and copyright law violations for digitizing books
without the permission of copyright holders in the Google Book Search initiative. These issues
still remain controversial and some are still being fought in court.
Current and Future Perspectives
Google has already started initiatives to target radio, print media, and other media advertising.
GTalk, Google’s advertisement-free instant messaging and Internet telephony application may
become an appealing option as well. The company is looking to advance its VoIP services with
potential for GTalk to become an advertisement-supported voice-calling product, integrating
TABLE 10. Start-up Search Firms
Company Name Search Techniques
A2B Location Search
Accoona Artificial Intelligence/Semantic Search
Blinkx Media and Implicit Search
Gravee Social Search
Grokker Enterprise Search
Kosmix Health Search
Nexidia Media Search
PageBull Visual Search
PubSub Weblog and Newsgroup Search
Riya Photo Search
Simplyhired Job Search
SurfWax Targeted Search
Teoma Clustering Categorization
Transparensee Systems Relevant Matching
Trulia Real Estate Search
Truveo Video Search
Vast Classified Search
Vivisimo Clustering Categorization
Wisenut Vertical Category Search
Source: Various news sources
Then, there are political, copyright, and privacy issues that Google constantly deals with.
Google has been the subject of much debate at GMail’s release, as the correlation between
GMail and Google’s search poses enormous privacy risks. A California state senator proposed a
law to ban advertising function where Google sponsored ads is displayed based on keywords
found in an email read. Privacy advocates addressed the danger of having personal email
retained in Google’s servers even after being deleted by the user explicitly. 14 However, many
critics are triggered by public reaction to information stored on external computers that
sometimes fall into the wrong hands. Computer users should be aware of the perils they
potentially face and should not expect more privacy in an email than sending a telegram or
postcard. Google also faced an onslaught of lawsuits, especially over the past 18 months
(LaPlante, 2006). There have been numerous occasions when Google’s AdWords customers had
to pay for clicks that turned out to be fraudulent or manipulated in some way. Other threats
include allegations of stolen source code in their Orkut software; “Google bombing” where some
users deliberately undermine the effectiveness of the PageRank algorithm by changing site
linkages to web pages to gain ranking scores; and copyright law violations for digitizing books
without the permission of copyright holders in the Google Book Search initiative. These issues
still remain controversial and some are still being fought in court.
Current and Future Perspectives
Google has already started initiatives to target radio, print media, and other media advertising.
GTalk, Google’s advertisement-free instant messaging and Internet telephony application may
become an appealing option as well. The company is looking to advance its VoIP services with
potential for GTalk to become an advertisement-supported voice-calling product, integrating
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phone number and Web searches into the interface. Among new products, Google is planning to
release the GDrive, an online disk storage drive for users. In addition, there is evidence that
Google is moving into telecommunications business as the company has been interested in
buying dark fibers nationwide owned by various telecom service providers. x Google placed a
job listing seeking telecom expertise who could procure dark fiber for the company. It is rare for
companies to buy sizable amounts of cable unless they have huge data demands (e.g. banks), but
it may be an attempt for Google to further cut down costs in network usage in the future (Hansen,
2005). Other future product speculations include a Google web browser. Google has also
expressed interest in the wireless market space and has formed partnerships with mobile phone
vendors Samsung and China Mobile.
At the 2006 Consumer Electronics Show in Las Vegas, Page announced Google’s plans to
distribute a consumer software bundle called Google Pack. Google Pack is the answer to Page’s
frustration that new home computers do not come with enough easy-to-use applications. It
contains Google software including Google Desktop, GTalk, anti-virus, anti-spyware, FireFox
browser, and Adobe Reader. Dell Computer is considering using GooglePack as part of its pre-
installed software packages for selling new PCs.
In 2006, Google released the 802.11 Wi-Fi initiatives in the San Francisco area. A Wi-Fi VPN
client called Google Secure Access allows all San Francisco’s residents wireless Internet access.
Supplying free Wi-Fi is a major step of making information more available and to get people
onto the Internet more easily, a significant move to ubiquitous, affordable Internet access.
Furthermore, Google invest in wireless start-up companies that are developing Wi-Fi community
networks including FON and Meraki.
Google is partnering with other companies to invest approximately $100 million to develop
broadband Internet over power lines. Network computer maker Wyse Technology says there
were speculations about a $200 Google-branded PC that would likely be marketed in China and
India through local telecommunication companies. The only relevant source of information to
support the claim is Google’s funding support of the one laptop per child (OLPC) non-profit
association dedicated to research and development of cheap laptop computer for children in
developing markets. The initiatives potentially allow more users access to educational
information over the Internet, benefiting society and increasing the standard of living around the
world.
CONCLUSION
In only a short period of time, Google has become a dominant player in search technology and a
formidable threat to many other technology firms in various industry sectors including
advertising, standard software, web application development, and telecommunication networks.
Behind the scenes, the use of information technology has been strategic and critical for Google’s
search engine success and other Google products and services. A variety of advanced concepts
in computer science have been applied to many of Google’s products and services ranging from
topics in distributed systems, machine learning, software architecture, and communications
x Dark fiber refers to fiber optic cable that is already laid out, but is not in use and involves huge operational cost.
phone number and Web searches into the interface. Among new products, Google is planning to
release the GDrive, an online disk storage drive for users. In addition, there is evidence that
Google is moving into telecommunications business as the company has been interested in
buying dark fibers nationwide owned by various telecom service providers. x Google placed a
job listing seeking telecom expertise who could procure dark fiber for the company. It is rare for
companies to buy sizable amounts of cable unless they have huge data demands (e.g. banks), but
it may be an attempt for Google to further cut down costs in network usage in the future (Hansen,
2005). Other future product speculations include a Google web browser. Google has also
expressed interest in the wireless market space and has formed partnerships with mobile phone
vendors Samsung and China Mobile.
At the 2006 Consumer Electronics Show in Las Vegas, Page announced Google’s plans to
distribute a consumer software bundle called Google Pack. Google Pack is the answer to Page’s
frustration that new home computers do not come with enough easy-to-use applications. It
contains Google software including Google Desktop, GTalk, anti-virus, anti-spyware, FireFox
browser, and Adobe Reader. Dell Computer is considering using GooglePack as part of its pre-
installed software packages for selling new PCs.
In 2006, Google released the 802.11 Wi-Fi initiatives in the San Francisco area. A Wi-Fi VPN
client called Google Secure Access allows all San Francisco’s residents wireless Internet access.
Supplying free Wi-Fi is a major step of making information more available and to get people
onto the Internet more easily, a significant move to ubiquitous, affordable Internet access.
Furthermore, Google invest in wireless start-up companies that are developing Wi-Fi community
networks including FON and Meraki.
Google is partnering with other companies to invest approximately $100 million to develop
broadband Internet over power lines. Network computer maker Wyse Technology says there
were speculations about a $200 Google-branded PC that would likely be marketed in China and
India through local telecommunication companies. The only relevant source of information to
support the claim is Google’s funding support of the one laptop per child (OLPC) non-profit
association dedicated to research and development of cheap laptop computer for children in
developing markets. The initiatives potentially allow more users access to educational
information over the Internet, benefiting society and increasing the standard of living around the
world.
CONCLUSION
In only a short period of time, Google has become a dominant player in search technology and a
formidable threat to many other technology firms in various industry sectors including
advertising, standard software, web application development, and telecommunication networks.
Behind the scenes, the use of information technology has been strategic and critical for Google’s
search engine success and other Google products and services. A variety of advanced concepts
in computer science have been applied to many of Google’s products and services ranging from
topics in distributed systems, machine learning, software architecture, and communications
x Dark fiber refers to fiber optic cable that is already laid out, but is not in use and involves huge operational cost.
26
networks. Google’s vision of applying advanced computing concepts and innovative ideas has
allowed the company to stay as a forefront leader. However, there are even greater challenges
for Google as it matures into a multi-national corporation. How will Google be able to enter
international markets where information dissemination is highly regulated and controlled by the
foreign governments? Can Google continue to sustain its rapid growth while continue to hold on
its unique work culture? With the massive amount of information collected on a daily basis, will
Google invade privacy concerns? Will Google be able to maintain its technology leadership as
competition gets even more intense? And how real is the threat from Microsoft as it claims to
defend itself and compete rigorously with Google in the search market? The story behind
Google is only a start. Only time will tell Google’s destiny. Many futurists predict that Google
may perhaps become the most important technology company this decade, similar to how
Microsoft and Intel have changed the technology industry in the past.
networks. Google’s vision of applying advanced computing concepts and innovative ideas has
allowed the company to stay as a forefront leader. However, there are even greater challenges
for Google as it matures into a multi-national corporation. How will Google be able to enter
international markets where information dissemination is highly regulated and controlled by the
foreign governments? Can Google continue to sustain its rapid growth while continue to hold on
its unique work culture? With the massive amount of information collected on a daily basis, will
Google invade privacy concerns? Will Google be able to maintain its technology leadership as
competition gets even more intense? And how real is the threat from Microsoft as it claims to
defend itself and compete rigorously with Google in the search market? The story behind
Google is only a start. Only time will tell Google’s destiny. Many futurists predict that Google
may perhaps become the most important technology company this decade, similar to how
Microsoft and Intel have changed the technology industry in the past.
27
APPENDIX 1 – Page Rank Algorithm
PageRank Sample Calculation
Initially, assign all five pages the same score (a non-zero number, in this case 100).
Each page’s score is determined by the sum of a number, calculated by the score of the linking page(s) divided
by the number of outgoing link(s). For example, the “About us” page has one incoming link (from “Home
page”). Initially, “Home page” has a score of 100 and contains two outgoing links. Hence, the new score for
“About us” page is 50, calculated by 100 (score of “Home page”) divided by two (number of “Home page”
outgoing links). Calculation for the more complicated “Home page” is: 100/1 + 100/2 + 100/2 + 100/3 = 233
When scores for all five pages are recalculated, the process is repeated using the new scores assigned (in this
case: 50, 233, 33, 33, 150). The process is repeated over and over again until the scores convergences, and this
number is the final scores that will go into ranking system (in this case: 91,182,45,45,136)
FIGURE 11. PageRank Calculation
Source: The Economist, 2004.
PageRank Toolbar
PageRank is also displayed in the Google toolbar (Figure 3) that can be plug-in to standard
web browsers. However, rather than showing actual PageRank calculation, the toolbar uses a
range from 1 to 10 for showing page relevance using a logarithmic scale.
TABLE 11. PageRank Toolbar Bar Translation
Toolbar PageRank
(log base 10)
Real PageRank
0 0 to 10
1 100 to 1,000
2 1,000 to 10,000
3 10,000 to 100,000
4 100,000+
Source: Rogers, n.d.
APPENDIX 1 – Page Rank Algorithm
PageRank Sample Calculation
Initially, assign all five pages the same score (a non-zero number, in this case 100).
Each page’s score is determined by the sum of a number, calculated by the score of the linking page(s) divided
by the number of outgoing link(s). For example, the “About us” page has one incoming link (from “Home
page”). Initially, “Home page” has a score of 100 and contains two outgoing links. Hence, the new score for
“About us” page is 50, calculated by 100 (score of “Home page”) divided by two (number of “Home page”
outgoing links). Calculation for the more complicated “Home page” is: 100/1 + 100/2 + 100/2 + 100/3 = 233
When scores for all five pages are recalculated, the process is repeated using the new scores assigned (in this
case: 50, 233, 33, 33, 150). The process is repeated over and over again until the scores convergences, and this
number is the final scores that will go into ranking system (in this case: 91,182,45,45,136)
FIGURE 11. PageRank Calculation
Source: The Economist, 2004.
PageRank Toolbar
PageRank is also displayed in the Google toolbar (Figure 3) that can be plug-in to standard
web browsers. However, rather than showing actual PageRank calculation, the toolbar uses a
range from 1 to 10 for showing page relevance using a logarithmic scale.
TABLE 11. PageRank Toolbar Bar Translation
Toolbar PageRank
(log base 10)
Real PageRank
0 0 to 10
1 100 to 1,000
2 1,000 to 10,000
3 10,000 to 100,000
4 100,000+
Source: Rogers, n.d.
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ENDNOTES
1 “Google,” word search in Wikipedia, http://en.wikipedia.org/wiki/Google
2 Google Company Website, http://www.google.com/intl/en/corporate/index.html
3 Google Analyst Day, slide presentation, March 2006. http://investor.google.com/pdf/20060302_analyst_day.pdf
4 AdAge article http://adage.com/paypoints/buyArticle.cms/login?newsId=47341
5 Google Company Website, Google's technology playground, http://labs.google.com/
6 Joe Beda's blog, March 2005. http://www.eightypercent.net/Archive/2005/03/24.html
7 “CMU professor to head Google-Pittsburgh center,” Pittsburgh Business Times, December 2005.
http://www.bizjournals.com/pittsburgh/stories/2005/12/12/daily35.html
8 Google Analyst Day, conference meeting with analysts, March 2006.
http://news.zdnet.com/2100-9588_22-6045103.html
9 Google Company Website, Googlebot: Google’s Web Crawler http://www.google.com/webmasters/bot.html
10 “Search Engine” word search in Wikipedia, http://en.wikipedia.org/wiki/Search_engine
11 Dr. Jeff Dean’s speech at the University of Washington, October 2003.
http://www.uwtv.org/programs/displayevent.asp?rid=2459
12 “Google File System,” word search in Wikipedia, http://en.wikipedia.org/wiki/Google_File_System
13 Wikipedia word search for “MapReduce” http://en.wikipedia.org/wiki/MapReduce
14 “Privacy Subtleties of GMail” http://www.templetons.com/brad/gmail.html
ENDNOTES
1 “Google,” word search in Wikipedia, http://en.wikipedia.org/wiki/Google
2 Google Company Website, http://www.google.com/intl/en/corporate/index.html
3 Google Analyst Day, slide presentation, March 2006. http://investor.google.com/pdf/20060302_analyst_day.pdf
4 AdAge article http://adage.com/paypoints/buyArticle.cms/login?newsId=47341
5 Google Company Website, Google's technology playground, http://labs.google.com/
6 Joe Beda's blog, March 2005. http://www.eightypercent.net/Archive/2005/03/24.html
7 “CMU professor to head Google-Pittsburgh center,” Pittsburgh Business Times, December 2005.
http://www.bizjournals.com/pittsburgh/stories/2005/12/12/daily35.html
8 Google Analyst Day, conference meeting with analysts, March 2006.
http://news.zdnet.com/2100-9588_22-6045103.html
9 Google Company Website, Googlebot: Google’s Web Crawler http://www.google.com/webmasters/bot.html
10 “Search Engine” word search in Wikipedia, http://en.wikipedia.org/wiki/Search_engine
11 Dr. Jeff Dean’s speech at the University of Washington, October 2003.
http://www.uwtv.org/programs/displayevent.asp?rid=2459
12 “Google File System,” word search in Wikipedia, http://en.wikipedia.org/wiki/Google_File_System
13 Wikipedia word search for “MapReduce” http://en.wikipedia.org/wiki/MapReduce
14 “Privacy Subtleties of GMail” http://www.templetons.com/brad/gmail.html
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