Question princess Business & Management

An investigation of the sources of the problems encountered by Google

investigate the sources of the problems encountered by google

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Answer Internal Staff

Founded in 1998 by Larry Page and Sergey Brin (Googlecouk, 2016), Google has evolved to dominate the technology sector. With a brand value of $82.5 billion, some 53,600 employees and $68.5 billion in sales, Google is recognised as one of America’s best employers (Forbes, 2016). Still, they are not problem free.

One potential problem could be organisational size. Google is seen as dominant in its sector (Itprocouk, 2009), controlling 33% of the global digital advertisement market and 40% of the American market (Levy, 2014). This has put Google in the spotlight of regulators worldwide, including the European Commission, the Justice Department, the Federal Trade Commission and other scrutinisers, often placing the organisation under antitrust investigations, probing dominance issues or taking years to sanction business deals (ibid; Cleland, 2011; Price, 2015).The implications for Google may be a more hesitant company when it comes to implementing comprehensive revisions to their core products (Businessinsidercom, 2016).

Another difficulty is market sector. 96% of Google’s revenue comes from advertising and that sector is slowing down (Jackson, 2012). One reason for this is the decline in desk-top searches with more users favouring mobile searches which are less profitable (ibid). Furthermore, users are more inclined to favour mobile applications such as Amazon for their product searches (Jackson, 2012; Levy, 2014; Tmwunlimitedcom, 2014; Businessinsidercom, 2016). Thompson (2014) argues that the advertising division of Google is not prepared for industry shifts, especially towards the mobile market, nor can it compete against the immersive content from Facebook or Twitter.

Google is heavily dependent on the internet, has minimum physical presence and is facing increased competition from various sources (Thompson, 2015). As Price (2015) notes, ‘there's no single, existential threat to Google. But if the tech giant isn't careful…. slowly, over time, several small issues can lead to one big failure’.

References

Businessinsidercom. (2016). LARRY PAGE'S NIGHTMARE: How Google's Dominance Comes To An End. [Online]. [7 December 2016]. Available from: http://uk.businessinsider.com/larry-page-nightmare-2015-1

Cleland, S. (2011). The Top Ten Threats to Google. [Online]. [7 December 2016]. Available from: http://www.forbes.com/sites/scottcleland/2011/11/15/the-top-ten-threats-to-google/#5a95eda35edd

Forbes. (2016). The World's Most Valuable Brands. [Online]. [7 December 2016]. Available from: http://www.forbes.com/companies/google/

Googlecouk. (2016). Googlecouk. [Online]. [7 December 2016]. Available from: https://www.google.co.uk/about/company/history/

Itprocouk. (2009). IT PRO. [Online]. [7 December 2016]. Available from: http://www.itpro.co.uk/609794/the-problems-facing-google

Jackson, E. (2012). Google's Big Problem They Don't Want You To Know About. [Online]. [7 December 2016]. Available from: http://www.forbes.com/sites/ericjackson/2012/01/23/googles-big-problem-they-dont-want-you-to-know-about/#6fe91816430b

Levy, A. (2014). Five problems Google faces in the next 10 years. [Online]. [7 December 2016]. Available from: http://www.cnbc.com/2014/08/17/five-problems-google-faces-in-the-next-10-years.html

Price, R. (2015). Google is facing a death by a thousand cuts. [Online]. [7 December 2016]. Available from: http://uk.businessinsider.com/google-in-decline-2015-2

Thompson, A. (2015). Google’s SWOT Analysis & Recommendations. [Online]. [7 December 2016]. Available from: http://panmore.com/google-swot-analysis-recommendations

Thompson, B. (2014). PEAK GOOGLE. [Online]. [7 December 2016]. Available from: https://stratechery.com/2014/peak-google/

Tmwunlimitedcom. (2014). The key challenges facing Google in the coming years. [Online]. [7 December 2016]. Available from: http://www.tmwunlimited.com/news-and-blog/posts/2014/05/14/the-key-challenges-facing-google-in-the-coming-years