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Google

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Submitted By drahil
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3/3/2016

Google: The World’s First Information Utility? ­ Springer

4 How Google innovates
Innovation at Google has been internally focused on building an IT infrastructure that is robust and enables easy creation of new products and services. Going forward, the information utility will require more externally­ oriented innovation focused on supporting external developers and customer applications. But how does Google foster the innovation that leads to new applications? This is an important question because most companies cannot expect to imitate its IT infrastructure, but they can imitate its innovation strategies. Google uses the following four strategies.

4.1 Explicit focus on R&D
Google’s extraordinary revenue enables it to have a luxury few firms can enjoy today – an R&D lab that focuses on developing revolutionary hardware and software ideas along with complementary services. More than one­half of the company’s employees are engineers and scientists, and there might be hundreds of projects in development at any given time. Many prototypes are made available on the lab’s website for the interested public to download and try in the beta stage. By launching these beta products and services publicly to be tried out, Google can see which ones take off, get feedback, and incrementally improve them without having to scrap a product that might take off with further development.

4.2 Acquisition of talented people
Google is among the most active high­tech companies in hiring top engineering talent, including technology industry legends and young guru programmers. During the technology bust, Google seized the opportunity to hire bright technologists who focused on search technology (Vise and
Malseed 2005). Although Google’s revenue did not grow rapidly at first, its employee brainpower did grow fast. Many of the individuals hired by Google were visionary inventors or technical leaders for their former employer, and whose technology was relevant to Google.2 Working at Google is not only attractive to people in industry, but also to university professors who have opted out of academic careers to work for Google (Pittsburgh Business Times
2005).
To ensure the quality of its workers, Google’s employment screening process has become one of the most rigorous among all technology companies.
Applicants are asked complex technical questions from at least half a dozen interviewers, with a recruitment committee hearing everyone’s feedback
(Schmidt and Varian 2005). An entire interview process at Google can take several months. It is estimated that Google still has around 100 applicants for every professional job (Iyer and Davenport 2008).

4.3 Innovation culture
Google not only hires talented people, but provides them with an environment that encourages risk taking, creativity, and team work. Unlike many corporate environments, Google’s headquarters operates most like a graduate school with daily guest speakers, mentoring by senior engineers, projects by individuals or teams, and encouragement of an open mind and out­of­the­box thinking. Google has also adopted a very flat organizational structure to allow engineering ideas to be widely circulated.
To encourage innovation, Google implemented a 20 % rule wherein engineers must spend 80 % of their time at work on Google’s core products, but have freedom to dedicate the remaining 20 % of their work time to “pet projects”.
Such freedom has enabled the engineers at Google to develop products such as Google News, Google Finance, Orkut, and GTalk. Similarly, Google’s cloud computing initiative, which seeks to train the next generation of computer scientists to work with large scale databases, emerged from a computer scientist’s 20 % rule project. The pilot involved developing a course supported by a large­scale computer cluster with storage, an open source version of Google’s MapReduce software, and data to work with for computer science graduate students at the University of Washington. With the aid of
IBM, the project is being extended to six elite computer science programs whose faculty will do the teaching and later to other universities as well

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Google: The World’s First Information Utility? ­ Springer

(Baker 2007). The initiative will create a new generation of computer scientists able to develop and support the infrastructure and applications for information utilities.
According to Iyer and Davenport (2008, p. 67), an important part of Google’s innovation culture is rigorous data­based evaluation of project ideas, progress and results. They say that “A key ingredient of innovation at the company is the extensive, aggressive use of data testing to support ideas.” Google engineers use click stream data from its own or its partner’s websites to test and support new ideas or product offerings. They conduct thousands of natural experiments everyday on the Internet, such as offering multiple versions of a page design, an ad, or a word choice. They also offer tools to customers such as Google Analytics which allows customers to understand the value of their advertising. They use email to circulate ideas for new products that any employee can comment on and rate the ideas, providing an in­house market test. Once launched in beta, products are again evaluated by internal and external users and the data is used by management teams to determine whether they can be improved, launched, or scraped.

4.4 Acquisition of innovative companies
Although much is made of Google’s internal innovation, the new products and services that have captured significant user market share (though not revenue as yet) have been external acquisitions such as online video with YouTube and blogging with Blogger (Carr 2008a). Many of the purely internal innovations have not had the same traction, but part of Google’s genius is to know how to incorporate other technologies into its core infrastructure.
Between 2001 and 2007, Google acquired over 40 start­up companies and leveraged their technology and engineering talent. These acquisitions have not only created complements that might be monetized through the information utility, but also have contributed to Google’s core infrastructure.
For example, AdSense and AdWords were both enhanced with technologies acquired in 2003 from Sprinks and Akwan IT (Tab. 2).

Tab. 2
Core and complementary services from acquisitions

Technology

Acquired

Google services (Complements)

Applied
Symantics

Online advertising

2003

AdSense, AdWatch

Sprinks

Paid advertising

2003

AdSense, AdWords

Akwan IT

Distributed data processing 2005

Google File System

Android Inc.

Mobile phone software 2005

Google Android

Xunlei

Network file sharing

2007

Google File System

Adscape

Video game advertising 2007

(In development)

DoubleClick

Online media advertising 2007

(In development)

PeakStream

Parallel processing

2007

MapReduce

2001

Google Groups

Company
Core Infrastructure

Complementary services
Deja

Usenet search services http://link.springer.com/article/10.1007/s12599­008­0011­6/fulltext.html

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Google: The World’s First Information Utility? ­ Springer

Kaltix

Personalized Internet search 2003

iGoogle

Where 2
Technologies

Internet mapping

2004

Google Maps

Keyhole

Satellite imagery

2004

Google Earth

Zipdash

Mobile GPS traffic updates 2004

Google Ride Finder

Urchin Software

Web analytics

2005

Google Analytics

Android Inc

Mobile phone software 2005

Google Mobile/Google SMS

DodgeBall

Mobile social networking 2005

Google Mobile

Measure Map

Blogging analytics

2006

Google Analytics

Upstartle

Writely online word processing 2006

Google Docs

2Web
Technologies

Web spreadsheet

2006

Google Spreadsheet

YouTube

Internet video

2006

(In development)

ImageAmerica

High resolution aerial cameras 2007

Google Maps

Tusli

Mobile social networking 2007

Google Blogger API

Zingku

Mobile social networking 2007

Google Mobile

GrandCentral

Web­based voice services and mobile phone integration

2007

(In development)

Jaiku

Web­based activity stream sharing and mobile phone integration 2007

(In development)

Postini

Communications security 2007

(In development)

Source: Various news sources

To summarize the previous sections, Google’s business model has produced large revenue that has allowed the company to generate complementary products and partnerships and create a virtuous cycle that brings benefits to all participants. Google’s business runs on a robust IT infrastructure that provides the speed needed for efficient search while enabling scalability and reliability at low cost. These achievements are the result of an innovation model that gives highly talented people considerable freedom in a culture that encourages team work, sharing of ideas and risk taking, but evaluates their ideas with real world data and holds them accountable for results. These features constitute the basis for Google to become an information utility over the next decade.

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