In pursuing this vision, the founders Larry Page and Sergey Brin developed Google in ten years to one of the biggest and most influential companies in the world. Since 1998 and the IPO in 2004 Google became a business success story, increasing its revenue from $ 19.1 million (2000) to consolidated revenues of $ 50.02 billion (2013). Google’s market capitalization exceeded $ 300 billion in 2013. The questions at hand are, what is the business model behind Google’s success and what risks and threats are linked to that model? This paper aims to discuss these matters.
Google company analysis: Google’s core business is its search engine, which reported a market share of 67% in the U.S. In addition, Google diversified in a wide number of complements to its core business. Google’s product and service range comprises Gmail service, the Google Docs platform or the Google Chrome operating system ect. Unlike other competitors, Google does not charge its customers for the use of these services. The strategy Google pursues intends to expand its access to the user data, on which it depends to support its targeted advertisement platform. The number of users adds value to Google and its actual business model. The revenues are predominantly generated by its services offered. The major part of its revenues derives from the fees Google charges the advertisers to use this advertisement platform. Thus, its revenue stream is highly dependent on offering innovative services free of charge and the ability to capture user data and monetize on them. The two major advertising models are the technologies AdWords and AdSense. AdWords enables advertisers to target potential customers that have already shown interest in the product, through the words they use across Google’s services. The pay-per-click advertising models revenue totaled $42.5 billion in 2012 and was Google’s main source of revenue. AdSense enables publishers to earn revenue by adding ads to their online content. Thus, Google...