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).
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.”
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