Picture of Google Space
The Google search for new expansion and services included Google Space, an experiment on internet access and use conducted at Heathrow Airport

What next for Google?

Google has enjoyed phenomenal growth since its relatively humble beginnings, but how does the company plan to expand further?

Written by Neon Kelly

Keeping up with the growth of Google can be bewildering. Since its quiet inception in 1998, the company has expanded its business model to offer a variety of services that encompasses everything from web-based email to satellite views of the Earth, as well as its all-important search engine.

Each year brings fresh expansions and a flurry of new announcements. The past 12 months alone have seen several high-profile investments, from the $1.65bn (£811m) acquisition of YouTube last October to July’s purchase of security firm Postini at a cost of $625m (£309.7m).

Advertisement

At present the search giant is wrestling with watchdogs at the European Commission to secure a $3.1bn (£1.55bn) buyout of online advertiser DoubleClick. If the deal is approved, it is estimated that Google would control 80 per cent of all online adverts in the UK, according to a claim by Microsoft.

Advertising remains the key source of income for Google, a source that primarily relies on its status as the world’s leading search brand. Maintaining the top position is key to the company’s long-term plans, says Ovum analyst David Bradshaw.

“Google has two core strategies, which occasionally work together,” he says. “The first is to reinforce its existing revenue base, to keep pushing ahead and avoid being outflanked by newcomers. The second is to find new revenue streams, and this is why we see it experimenting, pushing ahead to find that next big source of income that it needs.”

Current speculation suggests that the next big thing will grow out of Google’s interest in the auction of wireless spectrum, under way in the US.

While the exact nature of the organisation’s wireless intentions is far from clear, it is likely that the established global network of Google users will play a major role in all tactical considerations.

So it is interesting that a significant number of the company’s recent activities have been based around the renovation of its key services, particularly regarding search.

Spearheading the overhaul was the launch of Google’s Universal Search strategy, unveiled in May. Under the initiative, the standard Google search engine has been revamped to include a wider variety of formats in its results lists, encompassing videos, images and news feeds, as well as the traditional links to relevant web pages.

According to Peter Norvig, the company’s director of research, Universal Search is the most logical way for Google to respond to the growing variety of media on the web.

“Universal Search is important from an ease-of-use point of view. For some users it was simply what they expected ­ to be able to see videos and pictures in the main results without clicking on a tab or altering their query,” he says.

“For others, universal search offers the chance to find something unexpected: someone might be conducting what they thought was a standard search, but unexpectedly, there’s a video of a lecture that provides the information they want.”

On the surface, Universal Search is just another step towards improving the range of Google’s search capabilities. However, the umbrella effect of the new search service is also symptomatic of a wider tactic to build links between Google’s various tools and services.

The iGoogle scheme, launched at the end of April, extends the integrated approach in a number of ways. Primarily, iGoogle acts as a personal homepage that can be customised via the addition of ‘gadgets’ ­ miniature applications offering everything from weather reports to news feeds, all of which can be rearranged as the user sees fit.

While many gadgets were developed by Google itself ­ providing built-in links to YouTube and tools such as the Maps service ­ the open nature of the project means users can set the applications to receive information from unrelated services, such as BBC news or independent blog feeds.

The increased availability of information has helped to make iGoogle one of the search giant’s fastest-growing products, says Jon Steinback, product marketing manager for search.

“A lot of our users want a more personal breed of information on their homepage,” says Steinback. “If, for example, you happen to search for a weather forecast every day, it makes sense to have a box that displays that information on your homepage. We’re finding that we can move away from a ‘pull dynamic’, where you have to pull information towards you, to the push dynamic, where you can set that data to be directed straight to you.”

From a strategic perspective, the push dynamic also has the result of encouraging users to remain logged in to Google’s services. Whereas in the past a surfer might be tempted to go elsewhere for their news, the relevant plug-in will deliver that information to their homepage.

The user is able to create a personalised portal that caters to their needs, while Google maintains high figures for people viewing its content ­ the core ingredient to its advertising business.

Personalisation has also played a large part in Google’s efforts to build a user base within the enterprise market via its Apps suite, which offers bespoke versions of the company’s email, calendar and chat applications.

While Googlemail in particular has long been viewed as a powerful consumer rival to products such as Microsoft’s Hotmail, it’s clear that Google wants Apps to compete in the corporate sector ­ and the $625m (£309.7m) purchase of Postini is a clear indication of the goal, says Gartner analyst Peter Firstbrook.

“Postini is the first acquisition that fits squarely into the enterprise m arket,” says Firstbrook. “The fact that Google paid a premium for an established company, rather than buying a startup, shows it is fairly serious about its intentions here.”

Aside from the appeal of the increased security provided by Postini’s email screening services, the acquisition has the added benefit of bringing in an established range of business clients.

“Postini already had dealings with a number of small-to-medium-sized customers that were at least partly disposed towards the outsourcing of infrastructure,” says Firstbrook.

“These are exactly the kind of businesses that Google is now looking to attract to its Apps suite.”

Tags:

Comments

White papers

Related jobs

More Accounting jobs

Spotlight

Ted Bell, Abel and Cole FD

Profile: Ted Bell, FD of Abel and Cole

The combination of the online shopping boom and a hunger...

Top 30 Accounting Networks and Associations 2008

The race to become the biggest firm on the planet...

Barack Obama Accountancy Age cover October 2008

Obama: asset or liability?

What an Obama presidency could mean for you

Find your next job

Find your next job
Salary Checker

Job of the week

More finance jobs

Newsletters

Sign up here for the very latest news delivered to your inbox. Choose from the following options:

Your next job

Have your say

Will proposed tax cuts help to stimulate the economy?
Yes
No

Advertisement

Search white papers

Search white papers

Advertisement