Team Members:

R93725042 蕭忠立 R93725043 陳柏青 R93725050 邱立榕 R93725053

鄭鎧尹

BackgrounderBackgrounder

Li Jung Chiu

HistoryHistory

1992First Browser

1994DirectoryDavid Filo & Jerry Yang

1995Searchable web pages Louis Monier

1996Parallel processing networkInktomi

1999PageRank Sergey Brin and Larry Page

1998Search spam

2000Google earning Yahoo!’s favor

2001Google’s new CEOEric Schmidt

2003Google – the most used search engine

•Provides a comprehensive, relevant, and

easy-to-use web search and browsing service (free)

• University of California-Berkeley• Novell (1997), led the strategic planning, management and technology development as chairman and CEO •Sun Microsystems (1983), CEO and chief technology officer; led the development of Java, and defined Sun's Internet software strategy

• Google as of 20031,300 employees (60 PhDs)Powered 75% of the search activities in the USAAccounted for 31% of the searches in the USAHad 73.5 million unique visitorsProvided interface for 88 languages

Google SuccessGoogle Success

• “Top Ten Best Cybertech” -- TIME magazine

• “Best Search Engine on the Internet” -- Yahoo! Internet Life

• 2003 Search Engine Watch Results (Feb. 2004) - Best News Search Engine, - Best Image Search Engine, Best Design, - Most Webmaster Friendly Search Provider,

- Best Paid Placement Service, - Best Search Toolbar

Google’s Search TechnologyGoogle’s Search Technology

• True to its founding mission• Clustered thousands of Linux web servers

to index more than 3 billion web pages• Use multiple distributed “spiders” to crawl

over the pages to examine the contents (25 pages/sec. per crawler)

• PageRank – solves an equation with 500 million variables and 3 billion terms

High Level Google ArchitectureHigh Level Google Architecture

Loopholes of PageRankLoopholes of PageRank

• Spammer Manipulation

• Did not employ traffic analysis

• Link (votes) can be biased towards certain kind of websites (consistent v.s. transient)

Pachin

Google’s RevenueGoogle’s Revenue

Google RevenueGoogle Revenue

• Revenue—

½ from licensing its search technology to companies like Yahoo

½ from selling relevant text-based ads (sponsored links near search results)

Search Technology LicensedSearch Technology Licensed

• Traditional search : Reference by numbers of keyword

• PageRank : Reference by numbers of links

AdWordsAdWords

• AdWords = Advertisement + Keyword

• Originator : Overture

AdWordsAdWords

• AdWords = Advertisement + Keyword

• Originator : Overture– Predecessor : GoTo.com

– GoTo.com Overture– Portal Adword Seller

shopping

AdWord

AdsenseAdsense

• Contextual advertising

Keynes

Google’s CompetitorsGoogle’s Competitors

The ThreatThe Threat

• Easy entry into the Search Engine Industry

• Lack of customer lock-in (vs. Microsoft).

• Large, well-known competitors are focusing on in-house search technology (Yahoo, Microsoft, AOL, eBay, Amazon).

• Customers are becoming competitors (Yahoo, AOL).

Google V.S. OvertureGoogle V.S. Overture

GoogleGoogle OvertureOvertureGlobal paid listing market share in 2003 35% 55%

Advertises amount by late in 2003 150,000 100,000

Average CPC in late 2003 $0.30 $0.40

Split in late 2003 70% 65%

With the network affiliates’ Internet search volume 55% 45%

Ranking methodMaximum CPC bid,

weighted by the Ad’s actual CTR

Amount bid for a given keyword.

Employ software tools and 100-person product team.

Yahoo GOOGLE.COM

Go Online

Type Key words

Search / Advanced

Search

Search Item Found or not /

Start again

Directed to another Website

YahooTeomaAsk JeevesLook Smart

CNNWSJHOOVERSAll Other Sites

YahooMSNAsk Jeeves

InktomiAskAlta Vistacacheflow

Yahoo.comAsk.comTeoma.com

Direct Direct CompetitionCompetition

IndirectIndirectCompetitionCompetition

Sources: Hoovers Online, Google's Toughest Search Is for a Business Model New York Times; New York, N.Y.; Apr 8, 2002; Saul HansellSources: Hoovers Online, Google's Toughest Search Is for a Business Model New York Times; New York, N.Y.; Apr 8, 2002; Saul Hansell

Big Challenge!Big Challenge!

Competitors: Ebay and AmazonCompetitors: Ebay and Amazon

• Ebay (www.ebay.com) E-commerceWeb-based marketplace in which a community of buyers and sellers are brought together to browse, buy and sell various items -- Business revenue: Charges Proceeds (Fees)

(5%) 0.01-$25 (2.5%) $25-$1000 (1.25%) over $1000

• Amazon (www.amazon.com) E-commerce a customer-centric company that sells a range of product

s that it purchases from manufacturers and distributors

• Microsoft is developing its own search engine– Can “lasso” users into its search engine through its operating

system.– Has the “Implicit Query” .– Hire the CTO of the Overture.– Release Longhorn in 2006.– E-mail => 1G v.s. 250Mb– Desktop search.– David V.S. Goliath or another Netscape?

Competitors: Microsoft and YahooCompetitors: Microsoft and Yahoo

• Yahoo was customer of Google (may now become Google’s biggest competitor)– Acquire Inktomi in Dec. 2002. ($235 million)– Acquire Overture in July 2003. ($1.6 billion)– E-mail=> 1G V.S 250Mb– AdWords adds Chinese interface.– Google acquired parts of shares of the 百度 search engine in June.– Yahoo release another Chinese search engine www.yisou.com( 一搜 ) – In Chinese, compete with 搜狐 and Yahoo.– Use the Travelocity’s data base to search the states of the flights.– In Chinese release five new search function including climate 、 Post N

um. 、 Stock Price 、 Mobile Num. 、 Translator.

Competitors: Microsoft and YahooCompetitors: Microsoft and Yahoo

Aliku

Google’s NextGoogle’s Next

Third Quarter 2004 Third Quarter 2004

今年營收

805,887

1,351,835

3第 季2前 季

AdSense收入結構

79%

21%Traffic AcquisitionCosts

AdSense Income

3第 季營收內容

51%48%

1%Google-SitesRevenueThe GoogleNetwork

others

Costs and expenses

55%

8%9%

5%

12%11%

Cost of revenues

Research and development

Sales and marketing

General and administrative

Stock-based compensation (*)

Non-recurring portion of settlement of disputes with Yahoo

2004 Nine Months Ended2004 Nine Months Ended

• Revenues: 2,157 million• Net Income: 195 million• Costs and expenses: 1,820 million

Revenues of Nine Months Ended

90%

10% Total costs andexpenses

Net income

What Should Google Do?What Should Google Do?

If they force users to use MSN Search and it’s inferior, it will cause lots of problems for them. I wouldn’t pursue anything—what’s the buzzword, sticky?—for the sake of having something sticky. Users will put up with it for a while, but at the first opportunity they’ll change. So I’m not a big fan of handcuffing.

Sergey Brin

Additional servicesAdditional services

• Images: 880 million+ ,multimedia search• Groups: In 2001, Google acquired the Usene

t discussion service from Deja.com, including its archive of more than 500 million postings dating back to 1981.

• Directory: used its PageRank technology to order Netscape’s Open Directory Project

• News: 4,500 news sources

Additional servicesAdditional services

New Search SolutionsNew Search Solutions

• Google Wireless: translated web pages into a language understood by handheld devices

• Google Toolbar: be embedded permanently in a user’s web browser

• Froogle: search for information about products for sale online

• Google Catalog: search hundreds of print mail-order catalogs

New Search SolutionsNew Search Solutions

ChallengeChallenge

• Google’s leadership position in web search was not sustainable

• Google’s business model had also become complex

Shovel WayShovel Way

• Developing superior search solutions• Converting Google.com into a mass-mar

ket portal• Merge with an established player

Any strategy that required heavy investment was not likely to be a problem once the company completed its IPO.

FutureFuture

• Gmail

• Blogger: In early 2003, Google had acquired Pyra Labs and its website

• Google Desktop Search: Search your own computer

• Picasa Photo Organizer

• Keyhole

FutureFuture

Q & AQ & A

Google’s Next Step?