Google Marketing Strategy.

Google Inc., starting from just a smart algorithm, has developed a totally new business model, has become in a few years the world leading search engine, has developed winning applications as Google Earth, Google Video, Google Maps, Gmail, and is enjoying a huge success. Google, starting from scratch, has won the challenge against a giant like Microsoft and against the previous search engine market leaders Yahoo, Lycos, Altavista, Excite.


Google Market Capitalization.

In nov 2007 Google Inc. was the 5th biggest US company, considering stock market capitalization. In nov. 2007 Google shares had topped $700.
Google stock market capitalization in nov 2007 was $230 billion, in July 2008 is $170 billion.

By comparison in July 2008 Microsoft stock market capitalization is $240 billion, General Electric market cap is $270 billion, Exxon stock market capitalization is $450 billion.
While Goldman Sachs stock market capitalization is $68 billion, Merrill Lynch market cap is $30 billion, Citicorp market cap is $90 billion, half of Google market cap.


The key question is: how and why Google won?

The answer is a complex one, and involves more factors. It's a series of smart decisions, excellent marketing strategy, great advisors, highly innovative and risky business model, and great products.

These are the key resons why Google won:

1.- Google had - and still has - a simple, clean, clear, minimalistic user interface. no frills, just the logo and the search box - easy and fast to load. And this was a key feature with the slow internet connections of the early years 1999 -2001 - while Yahoo and most of the other search engines were more like generalistic portals, full of confusion, full of useless features and useless links, full of annoying banner ads, heavy and slow to load.

Google had a clear understanding on psychology of perception, and how the interaction eye/brain works, while the bigger competitors didn't.

Bottom line is: If the user visits a search engine, what he wants to get is simply that: just a search engine.

A search engine which is fast and reliable. If the user wants a generalistic portal, he goes to a portal, not to a search engine.
Larry Page and Sergey Brin, the Google Executives, understood this, and this was what they delivered. And made their users happy.

2.- Google had - and has - reliable search results (not always, but most of the time). Page and Brin's PageRank algorithm worked well.

3.- Google got good advice from VC's and from Wilson Sonsini Goodrich & Rosati. Larry Page and Sergey Brin have been advised and assisted from the beginning by John Doerr, VC Partner of Kleiner Perkins and by Wilson Sonsini Goodrich & Rosati, the leading law firm of Silicon Valley

4.- Google introduced a smart, innovative and quite risky business model - Adwords - and the pay per click concept. The risk proved winning, and the innovative business model worked. Still today Adwords is Google main source of revenues.

5.- In the following years, Google became a powerhouse with an impressive pipeline of new great products - Google Maps, Google Earth, Google Video, Gmail. And slim revenues.

6.- Google worked very hard on Brand Building. It seems that brand building was much more important to them than just revenues and profits. The strategy worked. And it was a key asset in the subsequent IPO at the Nasdaq.

7 - Google was an innovator of the Business Model. Google delivered all these great new products basically for free, enticing and luring million of users worldwide, with the result of building the Brand in an outstanding, quite unbelievable way - and did it so fast.

Eric Schmidt was made CEO of the company, David Drummond, an attorney of Wilson Sonsini Goodrich & Rosati who had advised Google founders since the early days, joined Google as Chief Legal Officer, Wilson Sonsini Goodrich & Rosati took care of the IPO at Nasdaq.

At the IPO in August 2004 Google share price was set at $85, which to many financial analysts seemed eccessive and unreasonable. In nov. 2007 Google shares have topped $700.
And in nov. 2007 Google stock market capitalization reached $230 billion, while annual revenues reached $16 billion and profits $4 billion.

A question comes forth:

Who is the Mind behind Google?
Who is the Mind behind the stunning Google success?
Who is the mind with the Vision and giving the direction and the strategy?


Update:

Google Chrome. The New Browser From Google.

On September 2, 2008, Google has launched its new browser, named Google Chrome. It is a further challenge to Microsoft. The Google Chrome browser enters the browser competition challenging Microsoft Internet Explorer, which has the 73% of the browser market share, Mozilla Firefox, which has 19% of the market, and Apple Safari, with 6% of the browser market. Under the marketing point of view it's a risky move on the side of Google. If Google Chrome is not going to be definitely superior to Firefox it could undermine Google brand value.

Analysis on Google Chrome at the Google Chrome Browser special page

Image: Google Chrome. The new browser from Google.