GOOGLE

SWOT ANALYSIS

Strength
Undisputed market leadership in search engine
 Search- Oh my they own 70 something percent of total market share. They are a verb for goodness sakes
that means the word they profit most from.

Source- (https://www.netmarketshare.com/search-engine-market-share.aspx?qprid=4&qpcustomd=0)

First mover advantage for many products and services

 Android- 80% of global market share. A brilliant move to give it away for free to equipment makers, and
gather data on users and maintain its near monopoly of search.
 Affiliate program- Adsense is the #1 money maker for most websites on the net. This drives a lot of traffic
to Google and their ad partners. No one comes close to touching it.
 Management- Android + YouTube purchased were turned into mega hits, and were both forward thinking.
They now dominate their respective areas, and benefit each other.
Organizational culture and spirit of creativity

 Incredibly loyal employees who love working there. They want the company to succeed. Ample anecdotes
on the net to read about this.
 Pipeline of products coming out. Google invests a tremendous amount into R+D. More details below
 They have the best engineers on the world, and everyone wants to work for them.
Ecosystem of products and services

 Management- Android + YouTube purchased were turned into mega hits, and were both forward thinking.
They now dominate their respective areas, and benefit each other. They comprise a large part of Google's
ecosystem.
Weaknesses
Google on advertising as primary source of revenues despite diversification
 About 90% of Google's profits come from search making them heavily dependent
 In excess of 85% of Google's revenues are generated from ads. As an investor, it's always nice to have a
diversity of revenue streams.
Sharing user information
 Nowadays people are becoming conscious about their public and private data over the internet. People
don't want their foot print on the web. As Google stores each and every think which you do in its
ecosystem, hence it literally stalks and keeps a personnel digital foot print including the deleted photos.
People who are not aware of its consequences use it happily but people who are aware of it have started
hating Google.
International Appeal
 In North America and some parts of Europe, Google is still the choice of search engine but venture to
communist countries like Russia and China and Google is the bottom choice of search engine. Google’s
main weakness is the company’s inability to have international control over the search engine market.
Google is constantly being sued by the Chinese because of the different copyright laws China has. And
with China’s market booming it makes Chinese search engine, Baidu, an international force to be
reckoned with.
Valuation:
 With a valuation of 29 times current earnings, investors are certainly betting on continued growth from
the company. Should the company stumble, though, its stock might see a rapid decrease in price.

Opprtunities
Increasing presence in technologies
 The Driverless Car (article on how it will affect real estate prices in major cities) Has the opportunity to
revolutionize the world
 Many many robotics projects the public knows nothing about. They purchased Boston Dynamics as well
other robotics companies last year. This will be HUGE I believe.
Cloud computing
 Google is fast becoming a major player in the cloud. It will be leveraging its massive computing
infrastructure to compete with the likes of Amazon, Microsoft, and Oracle.
Wearable Technology
 Wearable tech is the new smartphone for the next generation. Google Glass takes traditional wearable
technology and integrates all of the wonder that is Google for augmented search, and arguably an
augmented reality.
Mobile
 Sixty-three percent of smartphone users under the age of 30 sleep with their smartphone. The mobile
experience dominates a large part of the retail experience, as well as navigation, social interaction and
daily activities. With devices, Google Now, Google Nexus and Android are giving Apple a bit of a run for its
money.
 In relation to search and Shopping, Google's mobile experience is seamless with Google Wallet, Google
Play and Google Offers.
Google Fiber
 Bringing ultra-high Internet speeds to the United States will increase the ease of access and the overall use
of the web. Not only that, but Google will eventually show a profit on this investment. It will spur
providers like Verizon and AT&T to increase both the reliability and speeds of their offerings under the
threatening cloud of competition.
Video
 YouTube is Google $1.65 billion investment, but represents the huge impact of video on retail and the
consumer experience with over 44,281 subscribers. Piggybacking on video, Google+ Hangouts are an
underutilized Google social resource. This year Google also announced Google Helpouts which integrate
with Google Wallet and Google Shopping.
Threats
Competition
 Apple is considering replacing Google as the default search engine in the iPhone, This, though expected by
many, would have deleterious effect on Google's short term price.
 Amazon- people going directly to the e-commerce vendor to BUY takes away from Google and their most
lucrative searches.
Facebook
 Facebook is a social networking company that is booming today. Millions of people sign on to Facebook
everyday to connect to their friends online. So why is Facebook one of the biggest weaknesses of Google?
Advertisements. Google is known to have Ads that are similar to what you search. Facebook has that as
well. Facebook has stolen much of the ads from Google and put it on their site. Ads is how Google search
makes money. If they lose ads they lose a lot of money.
Android Franchise Risk from Patent/Copyright Liabilities:
 Google itself spotlighted this threat in blogging that there is a “hostile organized campaign” attacking
Android via “bogus” patents. Google knows this is a big threat. In Steve Jobs by Walter Issacson, the late
Apple CEO Steve Jobs said about Android: “I’m going to destroy Android because it’s a stolen product…
They are scared to death, because they know they are guilty.” Apple has already convinced the
International Trade Commission that Android has violated Apple patents and is blocking some Android
imports.
Motorola Acquisition Risk:
 Motorola, an unprofitable, $13b revenue, 80 year old company, with 19,000 employees, threatens to
transform Google’s consolidated financial statement, by: reducing revenue growth rates and profitability
by roughly a third; weakening most every salient financial valuation metric substantially; and impeding
growth of Google’s market capitalization.

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SWOT ANALYSIS

First mover advantage for many products and services

Organizational culture and spirit of creativity

Ecosystem of products and services

Google on advertising as primary source of revenues despite diversification

Sharing user information

Increasing presence in technologies

Android Franchise Risk from Patent/Copyright Liabilities:

Motorola Acquisition Risk:

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