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Google was established in 1998 by two students from Stanford University. The name Google was created by the misspelling of the word googol, which is a term representing large quantities. This signified the search engines ability to find vast amounts of information. It originally began as a research project based on a theory that they could improve upon conventional search engines. The idea was that current search engines ranked results by inputted search terms, whereas the creators of Google determined a website’s relevance by the number of pages and their importance. This idea created a search engine to determine the user’s intended queries thus revolutionizing the internet.
The authority in which Google was created is complicated, but funding from the CIA and NSA research grants contributed to its origin, surmising that the United States government was a part of its creation. Domain names have an internet governance where no entity officially runs it per say, but Internet Corporation for Assigned Names and Numbers (ICANN) has some key policies which govern its infrastructure. Google was initially a privately held company, but eventually established an initial public offering (IPO), which governs how a business must operate as well.
The objectives of the company are designed to organize the world’s information and make it universally accessible and useful. The organization believes computers and technology are to enhance lives and that interfaces should be intuitive to the user. Ultimately, their core objective is to provide the best search results for peoples’ queries and push the limits of existing technology.
Google makes so much money, that budgetary constraints were not an issue. The company is at an estimated $132 billion in terms of monetary value. However, Google has been investing heavily in experiments to seek innovations which have cost them billions in losses over the years. Some Google executives have stated “No one wants to face the reality that this is an advertising company with a bunch of hobbies”, indicating the company is having difficulty balancing its core business with innovations.
The central source of revenue for Google is advertising through its sites and network. It sells ads to multinational corporations and individuals. It has an ad platform, selling simple advertisements that are target driven via its search engine, to utilizing its YouTube platform to promote full video ads.
In relation to capital expenditures, Google has tripled it’s spending on property and computers, with the belief that staying ahead of the internet business requires such expense. They spent $7.3 billion in their first quarter of this year. This is considering that Google bought real estate in Manhattan where their headquarters are located, preferring to own land than lease it. Furthermore, they are investing in undersea cables, building data centers and buying tons of computers to build their own global internet network to support growth and remain competitive.
Concerning operating costs, variables such as sales and marketing, product development, general and administrative, provision for transaction and loan losses, amortization of acquired intangible assets, as well as restructuring are factors concerning cost. These are contingencies of running a large organization. However, lately, investors are concerned because ad sales on Google search and YouTube was not enough to offset a surge in operational costs. This is primarily due to the company moving into phone-based computing products and other innovations.
In recent years Google has invested heavily in new innovations, creating products like cell phones, and in investing in new Google gadgets. They have financed technologies that turn clothing into touchpads, to a product called Google Glass that is a pair of eyeglasses that operate like a smartphone. One of the newest biggest changes in their budget concerns artificial Intelligence (AI). Google leads in the race to dominate AI, Investing billions in a transformative technology.
Regarding revenues, it is difficult to ascertain any concrete trends in this regard because of the nature of the industry. Some investors are concerned about the company’s investments towards technology and innovation, believing ultimately the organization is in advertising and best to keep efforts there. However, Google is also considered by the financial world as one of the biggest technology companies in existence. The company is the second largest of the S&P 500 Index with a market value of about $648 billion, and the stock has grown since becoming publicly traded. As such, the answer would be no, but things, like operating costs and loses in innovation in the billions, have occurred.
There have been new sources of funding in Google. They are involved in many initiatives currently from: investing $300 million for news initiatives, heavy investment in the billions concerning AI, money invested in their cell phone venture, and a variety of other technologies and interests that keep Google’s long-term orientation as a powerful company intact.
Google looks at technology as an opportunity, but if that becomes unprofitable or nonviable, they reduce programs that once interest them. For example, they use to invest in broadband but found that isn’t wasn’t cost effective as the government and others are investing in it and on their terms. At one time Google thought to invest in Research and Development concerning renewable energy, then they realized that their investments were not playing out as expected and stopped the project. These are just two examples of the many projects Google was once invested in. Likely, this is a trend of the company that will likely occur, as it is their ethos to turn to possible new innovations as the key to their prosperity.
Trends have not affected the management of Google. The company had core roots from its inception, convincing its employees that management is valuable and concentration on a work-life balance in the organization. All this has created a unique culture within Google that transcends economic issues, as the company has been successful overall irrespective of any losses. The people at Google are a team, and employees and management are treated well. For example, people are encouraged to 20% of their work time on side projects that interest them. The key traits of Google are patience and learning-over-time – people can take risks, and it’s encouraged. This paradigm allows the manager’s not to be affected by monetary trends in the company.
The total employment complement of the organization is not conventional, because it emphasizes change and social interaction in the company. Organizational structure and culture are key components to success. Employees are open, innovative, smart with an emphasis on excellence, hands-on, and supports small-company-family rapport.
The employees are organized in Google using a cross-functional organizational structure. It has three characteristics: Function-based, product-based, and flatness. Function-based groups its employees in areas such as sales and operations, engineering and design, product management, product-based groups, such as workers developing Google Glass and other innovative products. The company also has a considerable flatness, meaning that teams can go through management and directly communicate to the CEO of the company. Overall, the company lends itself to a small-company feel in which ideas are supported which suits well with the fast marketplace in their industry.
Employment trends at Google center around the philosophy that treating workers well results in greater productivity and motivation. The company philosophy is to increase its perks whenever possible, such as readily available foods and drinks, relaxing spaces, extra health benefits, and higher salaries than their competitors. Google wishes to increase their female leadership roles and desire to expand diversity within the organization.
Google does operate overseas, operating in more than 70 offices in over 50 countries around the globe, hiring both Americans and foreign nationals overseas.
The major opportunities facing Google is as follows: They are the leader in search engines, in which the very nature of the internet operates from. Google generates their primary income from ads supported by this very technology, making them sustainable in the foreseeable future. With their venture into the cell market, they are potentially able to take over Apple in the coming years. Coupled with their monopoly on search engines, they may become leaders in the cell market. The threats to the organization are as follows: Google is highly dependent on its advertising for their cornerstone of revenue. If another search engine from a competitor presents itself as a superior model, then Google could potentially go bankrupt. Another threat to the organization is its involvement with too many side-interests. It invests in many innovations, many that have not been fruitful. It may be wise to consider what the core business model is and invest most of the efforts there. Google sees AI as the single most important goal to achieve, investing billions of dollars annually. If they were to achieve their aspirations with AI, Google would be the sole proprietary of that technology, changing the world forever and making them the most powerful company to ever exist.
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