Google’s Strategy in 2012
Google’s Strategy in 2012
Google was the leading Internet search firm in 2012, with nearly 67 percent market share in search from home and work computers and 95 percent of searches performed from mobile devices. Google’s business model allowed advertisers to bid on search terms that would describe their product or service on a cost-per-impression (CPI) or cost-per-click (CPC) basis. Google’s search-based ads were displayed near Google’s search results and generated advertising revenues of more than $36.5 billion in 2011.
In 2012, Google was pursuing a cloud computing initiative that was intended to change the market for commonly used business productivity applications such as word processing, spreadsheets, and presentation software from the desktop to the Internet. Information technology analysts believed that the market for such applications (collectively called cloud computing) could grow to $95 billion by 2013. Also in 2012, Google was test marketing Google TV in the Kansas City area; in addition to watching a variety of network and cable TV channels, Google TV allowed subscribers to search live network and cable programming, record programs on a DVR, and stream videos from providers such as Netflix, Amazon Video On Demand, and YouTube.
Perhaps the company’s most ambitious strategic initiative in 2012 was its acquisition of Motorola Mobility for $12.5 billion, which put it in the hardware segment of the smartphone and tablet computer industries and positioned Google to become a head-on competitor of Apple. Google’s Android operating system for mobile phones, launched in 2008, allowed wireless phone manufacturers such as Samsung, LG, and HTC to produce Internet-enabled phones boasting features similar to those available on Apple’s iPhone. In 2012, Android was the leading smartphone platform with a 50.9% market share and Samsung’s Android-based smartphones had the biggest share of the global smartphone market.
In this case you should use Google’s SEC Form 10K for the fiscal year ended December 31, 2012 to evaluate Google’s execution strategies and prospects for long-term growth and profitability with particular attention to the following questions:
1. Did Google execute its 2012 strategies effectively, why or why not?
2. Were all of Google’s strategies successful, why or why not?
3. Did Google’s competition do anything in response to Google’s strategies, and if so, what did they do?
4. Did Google receive an adequate return on its investment for Motorola Mobility, why or why not, and what proof supports your answer?
5. How did execution of these strategies affect Google’s financial status?
6. With your 20/20 hindsight, would you have executed any of these strategies differently?