Searching for Revenue: Google

This case illustrates how database technology underlies Googles business strategy and operations.

Google was founded by Sergey Brin and Larry Page back in 1996 when both were Ph.D. students at Stanford University. Today, Google has put both these founders on Forbes magazines list of world billionaires. Google, famous for its highly successful search engine, strives to organize the worlds information and make this information universally accessible and useful for everyone.

How Google Works

Googles Web server sends the query to Googles index servers. The content inside the index server is similar to the index at the back of a book; it tells which pages contain the words that match any particular query term. The query then travels to the document servers where the documents physically reside (these could be anywhere in the world on any servernot just Googles), retrieves snippets of information from the stored documents there (such as name of the page/document, the first few sentences on the page/document) that are useful to describe each search result. Finally, the search engine returns the results (hits) to the user. The user then decides on and selects the individual hits to explore and visits these documents directly from the various document servers themselves. The generation of a returned hit list only takes a fraction of a second because Google has previously created its index information. Without doing this indexing ahead of time, Google could not generate a returned hit list of relevant documents for a query in such a short time.

Google consists of three distinct parts:

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1.	The Web crawler, known as Googlebot, finds and retrieves Web pages (documents) and passes them to the Google indexer for indexing. Googlebot functions much like a Web browser. It sends a request for a Web page to a Web server, downloads the entire page, and then hands it off to Googles indexer. Googlebot can request thousands of different Web pages simultaneously.
2.	The indexer indexes every word on each page and stores the resulting index of words in a huge database. This index is sorted alphabetically by search term, with each index entry storing a list of documents in which the term appears and the location within the text where it occurs. Indexing the full text of Web pages allows Google to go beyond simply matching single search terms. Google gives more priority to pages that have search terms near each other and in the same order as the query. Google can also match multi-word phrases and sentences.
3.	The query processor compares the search query to the index and recommends the documents that it considers most relevant. Google considers more than a hundred factors in determining which documents are most relevant to a query, including the popularity of the page, the position and size of the search terms within the page, and the proximity of the search terms to one another. The query processor has several parts, including the user interface (search box), the engine that evaluates queries and matches them to relevant documents, and the results formatter.

Selling Words

Googles primary line of business is its search engine; however, the company does not generate revenue from people using its site to search the Internet. It generates revenue from the marketers and advertisers that are paying to place their ads on the site.

It is estimated that there are three billion searches on Google every day performed by people all over the world. AdWords, a part of the Google site, allows advertisers to bid on common search terms. The advertisers simply enter in the keywords they want to bid on and the maximum amounts they want to pay per click, per day. Google then determines a price and a search ranking for those keywords based on how much other advertisers are willing to pay for the same terms. Pricing for keywords ranges from a few cents to an unlimited ceiling per click. A general search term like tropical vacation costs less than a more specific term like Hawaiian vacation. Whoever bids the most for a term appears in a sponsored advertisement link either at the top or along the side of the search results page.

Paid search is the ultimate in targeted advertising, because consumers type in exactly what they want. One of the primary advantages of paid-search Web programs such as AdWords is that customers do not find it annoying, as is the problem with some forms of Web advertising, such as banner ads and pop-up ads. According to the Interactive Advertising Bureau, overall industry revenues from paid search surpassed banner ads in the third quarter of 2003.

It is Salar Kamangar, Googles director of product management, who came up with the AdWords concept and who oversees that part of the business. A big percentage of queries we get are commercial in nature, said Kamangar. It is a marketplace where the advertisers tell us about themselves by telling us how much each lead is worth. They have an incentive to bid how much they really want to pay, because if they underbid, their competitors will get more traffic. AdWords accounts for the majority of Googles annual revenue, up from zero in 2002.

Expanding Google

Google has a secret weapon working for its research and development departmenthackers. Hackers actually develop many of the new and unique ways to expand Google. The company elicits hacker ideas through its application program interface (API), a large piece of the Google code. The API enables developers to build applications around the Google search engine. By making the API freely available, Google has inspired a community of programmers that are extending Googles capabilities. Its working, said Nelson Minar, who runs the API effort. We get clever hacks, educational uses, and wacky stuff. We love to see people do creative things with our product.

In addition to these projects are Google Maps, Google Earth, and Google Street View. These freely available data-driven websites (applications) allow users to query and interact with fairly up-to-date map information stored in Googles databases. Google Maps is Googles Web mapping service application that powers many map-based services; the application offers street maps, and a route planner for travelling by foot, car, or public transit. Google Earth is a virtual globe, map, and geographic information program that superimposes satellite and aerial photographic images of the Earth. Google Street View is a technology featured in both Google Maps and Google Earth. This feature provides panoramic photographs of locations taken at street level from a fleet of specially adapted cars (and sometimes tricycles and snowmobiles for those hard-to-reach places). These vehicles are installed with multiple directional cameras to facilitate the rendering of 360-degree views of the location being shot, and several GPS units to determine location positioning on a map.

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Stopping Google

As part of its Google Print Library Project, the company is working to scan all or parts of the book collections of the University of Michigan, Harvard University, Stanford University, the New York Public Library, and Oxford University. It intends to make those texts searchable on Google and to sell advertisements on the Web pages.

The Authors Guild has filed a lawsuit against Google, alleging that its scanning and digitizing of library books constitutes a massive copyright infringement. This is a plain and brazen violation of copyright law, Nick Taylor, president of the New Yorkbased Authors Guild, said in a statement about the lawsuit, which is seeking class action status. Its not up to Google or anyone other than the authors, the rightful owners of these copyrights, to decide whether and how their works will be copied.

In response, Google defended the program in a company blog posting. We regret that this group chose to sue us over a program that will make millions of books more discoverable to the worldespecially since any copyright holder can exclude their books from the program, wrote Susan Wojcicki, vice-president of product management. Google respects copyright. The use we make of all the books we scan through the Library Project is fully consistent with both the fair use doctrine under U.S. copyright law and the principles underlying copyright law itself, which allow everything from parodies to excerpts in book reviews and was ruled as such in 2013

Q1- In your opinion, How can Google improve its revenue using newer technologies. Give an example for each of five new technology areas of potential revenue.

Examples of new technologies would be (Or any new area you think of):

Artificial Intelligence

5G wireless

Blockchain Technologies

Big Data Analytics

Augmented Reality

Social Media presence/competition