Compo2/YY

Questions :
§ Explain Google's business model.
1. Who are their competitors?
Aug. 28 — Web darling Google has some fresh competition: a pair of startups aiming to improve on its immensely popular recipe for serving fast, relevant search results untainted by pay-for-placement listings. NEW JERSEY-BASED Teoma went live with a test version, or beta, in June. Another newcomer, California-based Wisenut, launched this month.Both shamelessly imitate Google in several ways, such as sporting stripped-down Internet sites and touting proprietary technology for ranking the significance of billions of pages that make up the World Wide Web. All three companies also have refused to follow a recent trend of selling placement within search results to advertisers—a practice that has created enviable Web profits at companies such as GoTo.com but sparked complaints from consumer advocates. Despite their similarities, Teoma and Wisenut are looking to cut into Google's dominance by carving up search results in slightly different ways. Each service says it has cracked the formula for delivering germane results in a way that is faster and more cost-efficient. And each is frantically working to amass the largest database of searchable documents to outstrip Google's lead in the marketplace with more than 1.3 billion indexed pages.
Although the technology looks promising, Teoma and Wisenut may have some difficulty wooing partners away from more established players, search experts said. "Teoma's technology looks very good, and its results are relevant," said Danny Sullivan, editor of SearchEngineWatch. com. "That's hopeful because if they are trying to compete with Google they're not at an immediate disadvantage. But its big weakness is that its database isn't very large...Their real challenge will be to win new customers, and it's going to be harder to try to convince some of them that they should come away from Google." The rivals have surfaced at a time when the face of Internet search is changing. Many major search services are taking on paid listing models to fuel their results and boost revenues while advertising dollars remain scarce. Inktomi, AltaVista and Fast Search are just a few companies allowing marketers to pay for prominence in search results—a trend that came into vogue with the success of for-fee engine GoTo.com. Signaling the widespread acceptance of the model, Microsoft's MSN and AOL Time Warner's Netscape are licensing search technology from paid-listing services. But the practice has come under fire by consumer-advocacy group Commercial Alert, which faults MSN and others for failing to adequately disclose that many of the top search results are bought. With growing commercialization of search engines, Google has stood apart from competitors for its simple style and relatively noncommercial results. Google sells advertising links that appear on the first page of search results, but these are separated from actual query results. And unlike search services including AltaVista and Inktomi, it does not sell entry into its database. Now Teoma and Wisenut are hoping to follow in Google's footsteps, filling a widening gap for research and noncommercial searches. "The whole challenge in search is to improve relevance and get behind consumers. The problem is there's a lot of junk on the Web, as it's getting much bigger," said Paul Gardi, president of Teoma.
JUST SEARCHMountain View, Calif.-based Google has become the search destination of choice for the digerati and many others. It also has earned the favor of search mavens, partly for its focus on search technology and for its abstinence from the kind of commercial extras that characterize many portals. With backing from such Silicon Valley rainmakers as Sequoia Capital and Kleiner Perkins Caufield & Byers, the company has also emerged in the past two years as one of the chief engines powering portals such as Yahoo and several corporate sites. Last year, the company won Yahoo's account from Inktomi, and it recently struck one of its largest deals to date powering search for Sony's company sites.
As the company blossomed, it made strides to transform its business from Silicon Valley cool to Wall Street respectable, complete with a profitable balance sheet. In this vein, it recently tapped Eric Schmidt, former Novell chief executive, to head the company. Schmidt replaces co-founder Larry Page.In a recent interview, Schmidt said Google had reached profitability. Although the company does not have immediate plans to go public, some analysts say it could have the makings of a hot initial public offering. Like Google, Teoma is growing its business on a grassroots strategy and focusing on making search the best it can be for Net surfers. The company touts greater search relevance and more options over others in the marketplace, including results grouped by topic, expert links and Web pages, or what it calls authoritative links. This means that a search on the terms "grocery stores" would return links to online grocers rather than articles or pages that mention grocery stores. Expert links break out pages that summarize the topic. For example, a search for "cars" might return a site with links to many car Web sites. The technology, developed by Apostolos Gerasoulis, a computer science professor at Rutgers University, uses dynamic Web clustering to rank and group the relevant Web pages on any given topic. Specifically, it ranks a page based on its popularity across the Web and its status within communities focused on the subject, as does Wisenut's service.
POPULARITY CONTESTMany search technologies base their results on the popularity of a page, or how often it is linked to other pages on the Net. By contrast, Google, Teoma and Wisenut consider popularity but also rely on other factors and proprietary methods to determine the rank of a Web page in a given search. Google's system, called PageRank, identifies the link structure of the entire Web and ranks pages based partly on the number of other important pages linked to them and partly on popularity. The search algorithms themselves are closely guarded secrets, Google spokesman David Krane said. Google also taps Netscape's Open Directory Project, an open-source directory of Web sites, for topic-based searches. Teoma and Wisenut hope to convince Web surfers that their methodologies are even more effective. "What Teoma does that is different is that we crawl the Web and look at subject-specific topics. We are able to cluster the Web into communities and understand what are the most important pages in those communities and who the experts are in that community," Teoma's Gardi said. He says flatly that Teoma's technology aces Google's, even though it has yet to be fully launched. "We have one-sixth of the size of data (that Google has), yet we're getting excellent results and are able to break into groups and find these expert links," Gardi said. "We have three dimensions of search that are dynamic, and others have one dimension of search that are static. "Are we better than they are? Yes. Are we able to deliver better results? Yes, because it's more suited to today's Web structure."In response to such claims, Google's Krane said his company stands by its record. "Define `better,'" he said. "Search is a very objective experience. Throughout our three-year history we've certainly seen our share of competition. But we've firmly established ourselves as the No. 1 search service on the Internet, and this can be attributed to our laser-like focus on a search-only business model."
He added that Google's newest competitors are not as comprehensive in their searches, and their underlying infrastructures are limited. For example, Google's 10,000 machines allow the site to provide most search results in a half of a second. In addition, other bigger rivals have attempted to mimic Google with little success. AltaVista's no-frills search engine, Raging Search, was quietly shuttered earlier this year. Teoma, a nine-person company located about 10 minutes from Rutgers University in New Jersey, plans to commercialize its service by selling advertising on its Web site and licensing the engine to third parties, including corporate intranets and Web portals. The company has not yet announced any partners. Funded by Woodcliff Lake, N.J.-based Hawk Holdings, the company launched its test site two months ago and plans to remove the "beta" from its site when it has added 250 million documents to its database, up from the current 100 million. Wisenut has already outpaced Teoma with 800 million indexed pages. Founded in August 1999 by mySimon creator and developer Yeogirl Yun, Wisenut says it has one of the fastest Web crawlers with one of the largest searchable databases. Although the company has a beta release available now, Wisenut will officially launch in September. (mySimon, an online comparison-shopping service, is owned by CNET Networks, publisher of News.com.) The privately held company is backed by Samsung Data Systems America, KTB Venture Capital, Ambex Venture Group, Hyundai Investment Management, LG Venture Investment, Dongwon Venture Capital, iMas and Intus Technologies. So far, it's expanded overseas with a Korean version of the service. "We think the market is actually very strong for search engines because Internet usage keeps growing," said Himawan Gunadhi, chief executive of Wisenut. "The older companies are having a lot of problems trying to keep up with the growth of demand...We are better suited to the growth of the Web." Gunadhi said that Wisenut goes beyond providing people with the most popular pages on the Web. He said that if keywords are entered, the search engine analyzes the words to determine whether the most popular sites are relevant for that search. "It may happen that the most popular sites may not be the most important when it comes to the results," Gunadhi said.
2. How have they used information technology to their advantage?
Google has proven to be such a dominant search engine that Microsoft Corp. has been forced to introduce a plan to pay consumers to search the Internet in an effort to gain attention. The pay-for-search model may gain Microsoft some eyeballs, but it seems unlikely the scheme will topple Google from its lofty search perch.Because Google is perceived to be the search engine of choice for North American businesses and consumers, companies pay big bucks to Internet search experts, or search engine optimizers (SEO), to ensure their products and services appear at or near the top of its search lists."Winning search in the dot-com space is getting so competitive for major key words like 'golf ' or 'shoes.' It is hard to win," said Scott Wilson, president of a Burlington, Ont., SEO consultancy.As Google's power grows, getting its attention is getting more expensive, consultants say. "Search optimization is becoming financially unreachable for small U. S. companies but Canadian companies can still compete," Mr. Wilson argues. "Google.ca is the default in Canada and the search engine recognizes domestic Web sites as Canadian. This means small to mid-sized companies here can seriously get into search and win some major key words without having a six-figure budget."Mr. Wilson's company, eMotion Pictures Studios, counts U. S.-based Home Depot Supply among its clients. It works to ensure the contracting giant's products and services rank high in Google searches. The ultimate goal is to come up on the first 10 searches. A customized program from eMotion starts at $10,000. Mr. Wilson says he can "win" key search terms for Canadian clients far faster than for U. S. clients.For small businesses to win the Internet search game, Mr. Wilson's firm has stumbled on a free SEO option called Google Local Business Center. Tied in with Google maps, it allows businesses to list their address and products or services into the search giant's database. The only requirement is the firm set up a Gmail account. On Google Maps main page, the user clicks "put your business on Google maps," and fills out all the forms provided.Google then provides a pin number to activate the listing, or it mails a postcard with an enclosed pin that must be used to prove that listing is for a real business at the address provided. "The nice thing is you can sign up for Google local search without even having a Web site," Mr. Wilson says. "You just open up a Gmail account for free and get listed. For small businesses that can't afford $12,000 for search engine optimization, this is a free and easy option."To illustrate how wide open the Google local search tool is, Mr. Wilson taps out a few examples on his computer. Searching out "tattoos Guelph," yields three results, not surprising considering the Ontario town is full of university students much of the year. Searching "tattoos Oakville," a city near Toronto, yields just one location, giving it premier placement in Google search, all for signing up with the Local Business Center service. The tactic is especially effective for companies that count heavily on customers being geographically nearby.Another loophole is the ability to add a coupon to a small business listing. (The example Google gives is 10% off any medium pizza, free delivery). "We don't know if the coupon helps you stay on the first page or not," Mr. Wilson says."It's getting harder and harder to rank on the first page. … Google wants to get all the local businesses signed up and anyone who signs up early is getting top treatment," he notes.
3. How competitive are they in the market?
" I Create a stable and predictable legislative environment.
IIWork on a flexible and resilient economic structure.
IIIInvest in traditional and technological infrastructure.
IVPromote private savings and domestic investment.
VDevelop aggressiveness on the international markets as well asattractiveness for foreign direct investment.
VIFocus on quality, speed and transparency in government and administration.
VIIMaintain a relationship between wage levels, productivity and taxation.
VIIIPreserve the social fabric by reducing wage disparity and strengthening themiddle class.
IXInvest heavily in education, especially at the secondary level, and in thelife-long training of the labor force.
XBalance the economies of proximity and globality to ensure substantialwealth creation, while preserving the value systems that citizens desire. "
4. What new services do they offer?
SAN FRANCISCO, Aug. 27 — Further extending its efforts beyond search technology, Google plans to announce Monday that it will offer software providing a range of online services for business users. The company, which has gradually been adding to its arsenal of services, says it will offer a package of software including its e-mail, calendar and chat programs and a Web site development tool for companies and organizations looking to avoid the high cost of providing such services on their own. Dave Girouard, vice president and general manager of Google's enterprise business, called the move a "starting point" for Google in catering to business users. Initially, the package will be free, but later this year Google plans to begin selling a version that includes additional features as well as technical support. While the e-mail program, Gmail, is currently supported by online advertising, the other three programs contain no advertising. Mr. Girouard said Google's immediate goal in offering the free services was to increase the number of people and companies using its technology.Mr. Girouard said he expected the pay service to appeal to larger organizations. He would not discuss any plans for pricing.Google's software offerings beyond search are focused on communications and enabling workers to collaborate, but the company is testing spreadsheet software and a word-processing program called Writely that will soon be offered over the Web. When that happens, analysts say, the company will be in even more direct competition with the likes of Microsoft, which is moving to deliver more of its software to businesses over the Web. A number of smaller software companies already offer calendars, e-mail and other applications online. "I think it's going to put Google head-to-head with Microsoft, especially when it comes to price-sensitive markets like small business and education," said Matthew Brown, an analyst at Forrester Research in Boston.For small and medium-size businesses, the new Google services, called Google Apps for Your Domain, could produce huge savings in technology support costs, he said. As Google encroaches on the business software territory that Microsoft has traditionally dominated, Microsoft has responded by adding online Web services to its desktop software and beefing up its Web offerings, particularly in search services. Last year, Microsoft announced Office Live, a Web service aimed at helping businesses collaborate on spreadsheets and other documents.While each of the Google services has already been available to consumers, the package for businesses is aimed specifically at organizations that want to offer them in turn to their employees. Companies can use Google's Gmail program, for example, to set up a corporate e-mail system with software for both the server computer and individual users.Providing technology to corporations and large organizations accounts for less than 2 percent of Google's revenue, but the business is increasingly critical, Mr. Girouard said. Most of that involves selling "server appliances," large computers that take on the job of conducting searches of large databases and company records."We are a very small part of Google's overall business, but we're growing quickly," he said
5. What makes them so unique? Google has a wide range of data when it come to Info Technology. Google gives us the advantage to learn and explore important matters.
6. How competitive are they in the international market? They compete the standards internationally and being well known globally.