Entrepreneurship
Module 7

John Smith
MGT500
Aug 06, 2011

Essay Questions:

Google Case Study
1. Do you think Google will be able to maintain its entrepreneurial culture in spite of its recent growth and increased size? Why or why not? It appears that Google will maintain its entrepreneurial spirit at least for the foreseeable future. Google now employs over 28,000 people around the globe and as of February this year, maintained a market share of 65.6% in the search engine industry (Kell, 2011). On top of this their additional product lines are impacting the market on global scale such as Gmail and Google Maps, making Google a major player in the technology sector. However, even with all explosive growth, Google recently confirmed its desire to maintain its entrepreneurial roots. As stated by Google CFO Patrick Pichette, “With scale there always becomes this tension of how do you keep the start-up philosophy, we don't want to lose our start-up philosophy" (Millman 2011). The question then becomes not do you want to remain entrepreneurial, but rather how do you maintain it. When the size of an organization reaches 28,000 it is inevitable that a more bureaucratic model becomes necessary to maintain organized operations. With bureaucracy and the stability it brings, innovation and flexibility tend to suffer. However, Google has proven it can maintain and grow revenues even while it aggressively expands the size of its operation. This is demonstrated by Google continuing to reinvent itself with new products and services using the canvas of the Internet in order to create new works of art. While the new products and services Google created offer proof enough of their ability to maintain the entrepreneurial culture, it is one of the corporate policies that is the best indicator. It has been reported Google has policy that allows its employees to use up 20% of their work time for projects of their own invention (Millman 2011). This is the type of real action in combination with big plans that allow companies to remain entrepreneurial past the start- up phase.

2. In your opinion, what were the key factors in determining the success of Google’s entrepreneurial founders? There were a number of key factors in determining the success of the Google’s founders.

Timing – Google was founded in the late nineties right as the Internet was becoming commonplace. This time period was like the gold rush days of the 1800’s, leading up to the dot com boom.

PageRank algorithm – Google was the first company to utilize page rank algorithms, instead of the status quo keyword search algorithms. The key word search made it easy for advertisers to game the system by including a particular key word many times a website. This practice increased the frequency of spam and was not very useful to users. Google’s page rank algorithm was revolutionary by favoring websites linked with other pages. The higher the linked page was rated the more valuable the link.

Simplicity – one key aspect of Google’s appeal was and still is the simplicity of the interface. Whereas other companies focused on combining many different sources of information on the same web page as a search function, Google focused on maintaining a simple and dedicated search function interface. This holds appeal for many users it is the reason many home pages are set to www.google.com.

Scalability – Google’s model did not require a huge infrastructure and was successful at a very small scale to begin with and then grow rapidly as its popularity increased. This was exceptionally important as Google grew from the initial investment $100,000 in August of 1998, to the next round of $25 million less than a year later (Google History 2011).

Open Source – While many companies such as Microsoft, Sun Microsystems, and Apple maintain strict controls on their code, Google has gone the opposite direction. By making much of their content open source it encourages development from outside the company and encourages a devout customer loyalty.

3. As you look into the future, what do you think represents a bigger threat to Google: established companies like Microsoft or smaller, entrepreneurial companies? Explain. I personally don’t think either the bigger or the smaller companies represent a significant threat to Google. The companies like Microsoft do cross into Google’s market space; however their incursions tend to be too invasive and turn much of the market off. An example of this was the huge push for Microsoft’s new search engine Bing. Many customers just go along with flow because it comes standard in Internet Explorer, however the growing market of users that use browsers such as Firefox, Opera, and Chrome tend to actively resist any Microsoft product if they can help it. Especially distasteful was the infiltration of Bing code into so many subsystems without user consent or knowledge. Unfortunately for the small companies, the Wild Wild West days of the internet are over. The timing and the current dominance of Google will make them very difficult to catch. I believe the high growth sectors for the near future will be social media outlets and media aggregators like YouTube. Small companies trying to move into Google’s immediate space will struggle. I also believe Google represents the biggest threat to Google. As it continues to grow, it takes on more ambitious projects. Unfortunately in order to continue adding the latest whiz bang projects Google flirts dangerously close to invasion of privacy. All great projects rely on data, the more specific the more valuable. This does lead to some really unequivocal and valuable services it also has a very big brother feel to it. This will get Google in trouble with privacy groups and with governments in the future as is has in the past. Just last May they were hit with a $50 million dollar lawsuit alleging privacy concerns. While that amount may seem trivial to a company of Google’s size, it is the precedent it sets, and sets the tone for what is to come.

References

Certo, S. C., & Certo, S. T. (2006). Modern management. Upper Saddle River, NJ: Pearson/Prentice Hall.
Google history - Company. (n.d.). Google. Retrieved August 11, 2011, from http://www.google.com/about/corporate/company/history.html
Kell, J. (2011, February 11). Google's Lead In Search-Market Share Narrows - ComScore - FoxBusiness.com. Home - FoxBusiness.com. Retrieved August 11, 2011, from http://www.foxbusiness.com/markets/2011/02/11/googles-lead-search-market-share-narrows-comscore/
Milman, O. (2011, July 22). Google “start-up philosophy” provides a valuable lesson for start-ups. Business News, Business Advice and Information for Australian SMEs | SmartCompany. Retrieved August 11, 2011, from http://www.smartcompany.com.au/start-up/20110722-google-start-up-philosophy-provides-a-valuable-lesson-for-start-ups.html