REPORT

Swinburne University

2012

Ali N Cheema, Sanket Daga, Tin Nguyen, Zohaib Yousaf

LETTER OF TRANSMITTAL

SANKET DAGA October 12, 2012 Swinburne University of Technology (Graduate School of Business) Dear Dr.SarodKhandaker, Please find attached the report of the detailed analysis on Google Inc that emphasises on the financial methods used by the company and the implications of these financing decisions on the operation of the company. This report also highlights some of the key governance issues, analysis of profit/loss/balance sheet, share price fluctuations, competitiveness of the company and finally includes recommendations based on the analysis. Members of this group were Ali Cheema(7012918), Sanket Daga (7263104) Tin Nguyen (1799436) and Zohaib Yousaf (1786008). This report is written as a part of the course work. Thank you for giving us the opportunity to work on this report.

Sincerely,

SanketDaga

Table of Contents
1.0 EXECUTIVE SUMMARY: ............................................................................................................... 3 2.0 INTRODUCTION: ................................................................................................................................ 4 2.1 Purpose ......................................................................................................................................... 4 2.3 Assumptions .................................................................................................................................. 4 2.4 Limitations..................................................................................................................................... 4 3.0: GOOGLE INC. .................................................................................................................................... 5 3.1 Background: .................................................................................................................................. 5 3.2 Products : ...................................................................................................................................... 5 3.3 Googlers: ....................................................................................................................................... 6 3.3 Investments and Acquisitions (the business model) .................................................................... 6 4.0 GOVERNANCE ISSUES: ...................................................................................................................... 7 4.1 Internal communication differences: ........................................................................................... 7 4.2 Google and China issue: ................................................................................................................ 7 5.0 SOURCES OF FUNDS: ......................................................................................................................... 8 6.0 USES OF FUNDS: ................................................................................................................................ 9 Source: Annual Reports 2008,2009,2010,2011 ................................................................................ 11 6.1 Analysis of sources of funds: ....................................................................................................... 11 6.2 Analysis of uses of funds: ............................................................................................................ 12 7.0 RATIO ANALYSIS: ............................................................................................................................. 12 8.0 COMPETITIVENESS IN THE MARKET................................................................................................ 17 8.1 Porters Five Forces: .................................................................................................................... 17 9.0 FINDINGS:........................................................................................................................................ 19 10.0 RECOMMENDATION: .................................................................................................................... 20 11.0 CONCLUSION ................................................................................................................................. 21 12.0 BIBLIOGRAPHY: ............................................................................................................................. 22

1.0 EXECUTIVE SUMMARY:

This report mainly concentrates on the financial analysis of Google Inc, the company was started founded in 1996 by Larry Page and Sergey Brin as a search engine. It was incorporated in 1998 with an initial investment made by Andy Bechtolsheim who believed in Larry and Sergey to make

Google the worlds largest search engine company. Google was mainly funded by private investors till the year 2004. As the company was expanding rapidly large amount of funds were required which led Google to go public in 2004. Since then Google has expanded from just being a search engine company to multi product company ranging from News to Mail, Video Sharing to Picture Sharing, from blogger to Twitter. Google believes in being an innovative company and always wants to be market leaders, therefore they only acquired the best companies in every field they thought would help the company expand and recruited the best employees who would be able to keep up to Googles pace. Google as a company though being professionally managed has faced criticism due to their internal communication differences and also by Google China issues. Google has been expanding their business and product lines in the last 6 years. and for the companys expansion various sources of funds and different financial instruments ranging from retained earnings, share capital & borrowing. Google mainly uses the funds for expansion and acquisition purposes. Google Incs main source of revenue has been advertising. The companys return on investments, return on shares have been increases as the company is entering new markets and also because the company has been able to make the right choices for their investments. Like every other company Google has its own strengths, weaknesses, opportunities and threats which have been discussed towards the end of the report. Google has been addressing every issue they have been facing in the past which has led Google to be ahead of their competitors and has helped the company become the worlds no 1 search engine company.

2.0 INTRODUCTION: 2.1 Purpose The main purpose of this report is to analyze and clearly demonstrate thorough research about the governance issues the company is facing as they expand, investment decisions, the sources of funds and the various financial instruments used in funding projects, analysis of the financial reports and the companys competitiveness in the current market. We also find out why Google Inc. uses different types of financial strategy models, in sourcing of funds and use of funds the relation between the strategies and growth story. 2.2 Methodology All the information used in this report is from secondary sources. A number of readings from academic journals, prescribed textbooks, company reports and various articles have been taken in order to analyze the key financial ratios, share price fluctuations and profit/loss/balance sheet of the company 2.3 Assumptions It was assumed that the information provided in the companys website and other reports are accurate and reliable. Furthermore, the secondary sources that support the theories and concepts are presumably relevant to the case of Google Inc. 2.4 Limitations There has been a dearth of primary information due to confidentially of such data, including internal strategies of Google Inc. that make it difficult to perform a detailed analysis. Therefore, the outcome may not reach the expectations as desired.

3.0: GOOGLE INC. 3.1 Background: Google, the most widely used web based search engine in the world was founded by Larry Page and Sergey Brin in 1998. Both of them were classmates at Stanford University where they were both doing a PhD course in 1996.The name Google originated from the word googol which referred to the number 1 followed by about a hundred zeros. (Google.com). Googles initial work was done from a small garage in California which was owned by a friend. A start up investment of $100,000 was made by Andy Bechtolsheim, the Sun Microsystems co-founder. (Google.com) The search engine developed a large number of internet users following the search engine because of the simplicity of the website and it was user friendly. The search engine started selling advertisements on the search engine associated with search keywords. Google started to generate revenue and started growing rapidly while other dot-com rivals failed in the new internet marketplace. (Reuters.com) By 1999, a number of private investors invested funds totalling close to $25million dollars. Companies like Sun Microsystems, Sequoia Capital and Kleiner Perkins Caulfield & Byers were a few initial investors. But as the company grew rapidly it required more funds to expand and more professional management which led to the appointment of Eric Schmidt as the first CEO of Google and eventually the company went public in 2004. With an initial price of $85per share and 19,605,052 shares were
offered to the public. (Nasdaq.com)

In the last 10 years Google has become one of the most powerful search engines in the world and undoubtedly the most visited website in the world. Google has since then made a big impact on every internet user in the world. 3.2 Products : Google since 2004 from just being a search engine has grown to become a multi product company. The list of products offered by Google includes Earth, Chrome, Picasa, Visigami, Talk, Gmail, Ad Sense, Google Talk Google News, Google Mobilizer, iGoogle, Google Latitude, Google Maps, Google Sync, I Google, Orkut, Knol, Google Trends, Google Mobilizer, Google Mini, Google health, Google Double click, Google FeedBurner, Google Gadgets, SketchUp, Google Reader & Google Profiles. The
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various range of products Google have introduced has definitely impacted the way the world has started to communicate in the 21st century. (Darkwah. 2010) 3.3 Googlers: Initially started with only the founders of the company Larry Page and Sergey Brin, Google now has over 50,000 employeesworldwide. With their headquarters Googolplex is based in Santa Clara County in California (United States of America). The employees who work at Google are referred as googlers. (Google.com) The main aim of the company is to make the people who work in Google feel at home away from home. The company has all the facilities required by the employees. One of the most important aspects of Google has been the organisational culture which makes the organisation unique. Google embraces multicultural employment opportunities and they hire the most talented and most unique people in the company who they think will be able to contribute to the business. Google encourages their engineers to spend 20% of their time on any innovative projects they think might contribute to the business which has led to engineers innovating products like Google mail, Google news and many more. (Darkwah,2012) 3.3 Investments and Acquisitions (the business model) Google Inc has a 21st century business strategy. The term 21st century means always the latest and the most competitive. Google believes in being a leader in every product line. The companys business model comprises of only one aim which is to offer the best and quality service so that it expands it market through word of mouth mainly. In the recent year years Google Inc has acquired and collaborated only the best in the market. Acquired companies include Youtube, Myspace, Picasa and companies that Google has collaborated are eBay and Amazon. The company believes that if they acquire companies that are innovative and are growing rapidly would give Google an advantage over its major competitors like Yahoo and MSN. The companys business strategy always changes as per time which has made Google to also concentrate on different product lines like Gmail, Google News, Blogger and many more. (Dwivedi, 2008)

4.0 GOVERNANCE ISSUES:

The main two issues we have noticed which has affected the reputation of the company are:

4.1 Internal communication differences: A significant failure of the very top executives to manage internal differences with many of the companys senior employees has lead to departures of employees like Ben Ling, Ethan Beard, Gideon Yu and Elliot Schrage. Schrage used to be the head of global communications and public affairs, he later joined Facebook. (Shiels, BBC News, 2008). Loyalty and dedication of the staff has been an issue in Google. Google then also fears that the senior employees might expose Googles internal strategies and trade secrets to competitors. 4.2 Google and China issue: Since Google started its operations in China, the search engine has had to filter responses to users as a part of the law in China. Results that the government finds offensive and inappropriate on topics like Chinese human rights issues, political controversies, pornography and criticism of political leaders are required to be censored as per law. The company has faced criticism from the authorities at various occasions. The government authorities in 2010 had given Google numerous warnings that if the search engine did not comply with the regulations in China, the company might be forced to shut down its operations in the country. Li Yizhong, the information technology minister in China also warned Google If you want to do something that disobeys Chinese law and regulations, you are unfriendly, you are irresponsible and you will have to bear the consequences. Eventually Google closed its search service there and began directing users in the country to its uncensored search engine in Hong Kong. (LaFRANIERE, 2010)

5.0 SOURCES OF FUNDS:

1. Retained earnings (in millions) As per Googles policy of paying no dividend to its common stock holders despite its healthy earnings from 2008-11, Google has a huge resource of funds in shape of Retained earnings at its disposal to utilise according to its policies. Year 2008 2009 2010 2011 Retained Earnings 37,605.00 27,868.00 20,082.08 13,561.63 2. Class A & Class B Common Stock issued to raise additional capital on regular basis. At December 31, 2008, there were 6,000,000,000 and 3,000,000,000 shares authorized in addition to 240,099,511 and 75,040,973 shares legally outstanding of Class A and Class B common stock respectively. Share Types 2008 2009 2010 2011 Class A 6,000,000,000 100,000 100,000 100,000 Class B 3,000,000,000 9,000,000 9,000,000 9,000,000 3. Cash from Operating/Investing/Financing Activities (in millions) Activity 2008 2009 Operating 14,565.00 11,081.00 Investing -19,041.00 -10,680.00 Financing 807.00 3,050.00

2010 9,316.20 -8,019.20 233.41

2011 7,852.86 -5,319.42 87.57

4. Borrowings(Commercial Paper, Revolving Credit Facility, Secured Promissory Notes)

2010 Commercial Paper Revolving Credit Facility Secured Promissory Notes Unsecured Senior Notes up to $3 bill $3 bill $468 mill at 1% interest rate maturing in Dec 2012. (Proceeds used to buy an office building in New York) $3 bill in three equal tranches with 1.25% 2.125% and 3.625% till 2014, 2016,2021. (During 2011, Google paid $35 mill interest on these notes) 2011 $750 mill outstanding

Source: Annual Reports: 2008,2009,2010,2011

6.0 USES OF FUNDS: 1. Investment in US Govt. Securities Investments in highly liquid debt instruments of US government and its agencies, debt instruments issued by foreign governments, time deposits, mutual funds operating in money markets, mortgage backed securities. Cash and cash equivalents: Cash Cash equivalents: Municipal securities Time deposits Money market mutual funds U.S. government agencies Total cash and cash equivalents Marketable securities: Time deposits U.S. government agencies U.S. government notes Foreign government bonds Municipal securities Money market mutual funds Corporate debt securities Agency residential mortgage-backed securities Commercial mortgage-backed securities Marketable equity security Total marketable securities Total cash, cash equivalents and marketable
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2008

2009

$ 3,330,658 $ 4,302,578 14,250 3,015,557 2,296,207 3,739,875 2,153,175 1,960

8,656,672 10,197,588

3,342,406 2,721,603 73,034 907,056 145,000

1,250,000 3,703,868 2,491,709 36,643 2,129,774 27,899 2,822,111 1,578,644 47,716 198,823

7,189,099 14,287,187 $15,845,771 $24,484,775

securities

Cash and cash equivalents: ( in millions) Cash Cash equivalents: Time deposits Money market and other funds(1) U.S. government agencies U.S. government notes Foreign government bonds Corporate debt securities Total cash and cash equivalents Marketable securities: Time deposits U.S. government agencies U.S. government notes Foreign government bonds Municipal securities Corporate debt securities Agency residential mortgage-backed securities Marketable equity securities Total marketable securities Total cash, cash equivalents, and marketable securities

2010

2011

$ 4,652 $ 4,712 973 7,547 0 300 150 8 13,630 534 4,462 275 0 0 0 9,983

307 1,857 3,930 1,172 2,503 5,742 5,673 161 21,345

495 6,226 11,579 1,629 1,794 6,112 6,501 307 34,643

$34,975 $44,626

2. Acquisitions & Partnerships (in millions) Year 2008 10

2009

2010

2011

Amount invested

3,367.5

1,255

1,067

2,328

3. Stock Based Compensation (in millions) Year 2008 2009 2010 2011

Amount 1,119.8 1,164.1 1,376 1,974 Increase was largely due to additional stock awards issued to existing and new employees.

4. Research & Development (in millions) Year 2008 Amount Invested 2,793.2

2009 2,843.0

2010 3,762

2011 5,162

Source: Annual Reports 2008,2009,2010,2011 6.1 Analysis of sources of funds: Revenue growth rate of 29.01% in last 5 years has enabled Google to generate a huge resource of funds in the form of retained earnings at its disposal. This resource is helping a lot to invest heavily in research and development and to pursue an aggressive policy of acquisition and partnerships worldwide. Google has maintained its sales growth in post GFC era which is a vital sign of its financial and operational health. This source is of prime importance to Google as it is not paying any dividends and shareholders are happy with its performance, so practically no cost is attached to this source of funds. Another combination of borrowed fund sources lately opted in 2010 and 2011 is issuance of Commercial Paper, Secured Promissory notes, Revolving Credit Facility and Unsecured Senior Notes used for short term debt at very low interest rates and without endangering Googles financial covenants.

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6.2 Analysis of uses of funds: Funds are mainly used for research and development, short term debt financing, partnerships & acquisitions and for purchasing office buildings/properties. Although investing activities still showing negative inflows since 2008, but that makes sense. As Google is actively and aggressively involved in acquisition of new technologies and competitor businesses and such projects dont generate positive inflows in short term. As long as inflows from operating activities stay strong Google can continue its current business/financial policies. Huge cash and cash equivalents reserves and investments in marketable securities makes Google financially very much balanced as it reduces its financial risk immensely.

7.0 RATIO ANALYSIS: Return on Equity Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.

Table 1: Return on Equity 2011 Google Yahoo 16.7% 8.3% 2010 18.3% 9.8% 2009 18.1% 4.7% 2008 14.9% 3.7%

Google is enjoying a very good financial position, because their cash and short-term investments have been increasing over the years. The revenue has increased more than
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60% though the company has issued some shares to raise the equity but the retained earnings increased rapidly up to 200% over last four years. As a result the return on equity is 16.7% in 2011. In regards to the yahoo there present situation is a big concern because there revenue is continuously decreasing over the same period, especially in 2011 revenue decreased by 40% though yahoo did issue new shares to increase the equity. Moreover, their cash and short-term investment decreased and the company are continuously selling the treasury stock, which is a bit of concern for shareholders, although yahoos return on equity is 8.3% in 2011. Earnings Per Share (EPS) EPS is a summary of total company profits on per share basis.

Table 4: Earning Per Share 2011 Google Yahoo $29.97 $0.88 2010 $26.47 $0.94 2009 $20.51 $0.42 2008 $13.41 $0.30

Earnings per share for Google in 2011 has grown exponentially up to $29.97, where it was $13.41 in 2008 more than 100% increased. The company is not paying dividend to the shareholders but its working well for both, shareholders and the company. Google is utilizing the resources effectively over the years, as a result the share price of the company is also increasing rapidly, whereas shareholders can recover their money by selling the shares in secondary market and enjoy the benefit to receive it in lump sum. In regards to yahoo they have different policy to the dividends. Yahoo is paying quarterly dividend to the shareholders.

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Current Ratio The current ratio is one of the most important ways to measure firms liquidity. It measure to satisfied itsshort-term obligations

Table 2: Current Ratio 2011 Google Yahoo 5.91: 1 2.85: 1 2010 4.15: 1 2.67: 1 2009 10.6: 1 2.67: 1 2008 8.79: 1 2.78: 1

Google has noticed an increase year over year in Current Ratio, landing at 5.91:1 in 2011. The most recent current ratio for Google indicates that it has $5.91 in short term assets to service every dollar of current debt. Although this ratio dropped from 2009 and 2008 that was 10.6:1 and 8.79:1 respectively. On the other hand, Yahoos current ratio has remained steady from 2008 to 2011 and it slightly increased in 2011 to 2.85:1. Yahoo low current ratio can be attributed to their account payable to trade creditors. Yahoo accounts payable has increase from $151.90 mill to $166.59 mill, in last 4 years. Net Profit Margin It is calculated by calculating the net profit as a percentage of the revenue.

Table 3: Net Profit Margin

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2011 Google Yahoo 25.6% 21.04%

2010 29% 19.47%

2009 27.5% 9.25%

2008 19.3% 5.81%

Net Profit Margin for the Google has increased from 2008 to 2010 from 19.3% to 29% and has the growth of more than 50% but in 2011 it has dropped to 25.6%. The reason behind is the research and development is sitting at $5,162billion in 2011 an increase of 13.62% as compare to the last year. From Yahoos perspective net profit margin has gone into the double figures and hit up to 21.04% close to Googles. Yahoo performed poorly in 2008 and had a net profit margin was 5.81%. Debt/Equity Ratio A measure of a company's financial leverage, calculated by dividing its total liabilities by stockholders equity. It indicates what proportion of equity and debt the company is using to finance its assets.

Table 5: Debt/Equity Ratio 2011 Google Yahoo 19.88% 17.87% 2010 20.06% 18.87% 2009 11.09% 19.55% 2008 11.10% 21.67%

Google demonstrates only 18.07% liabilities over their shareholders in 2011. The Google has taken a long term long debt in 2011 an amount of $2986 mill whereas in the same year they have paid off the short-term debt worth of $1218 mill. Although the Google was having the short-term debt of $3465 mill of dollars in 2010 and their debt equity ratio was 20.06%. In regards to yahoo their debt over equity are decreasing over the four years of time which is a good sign for the shareholders.
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EBIT Margin A profitability measure equal to EBIT divided by netrevenue. This value is useful when comparing multiplecompanies, especially within a given industry, and also helps evaluate how a company has grown over time. Table 6: EBIT Margin 2011 Google Yahoo 32.52% 16.6% 2010 36.82% 16.92% 2009 35.44% 8.89% 2008 26.86% 1.33%

The EBIT Margin for Google has increased by 38% from 26.86% in 2008 to 32.52% in 2011. Yahoo has a dramatic growth in EBIT Margin, it was 1.33% in 2008 but in 2011 it went up to 16.6%.

Share fluctuations: Like any other company Google Inc shares have seen fluctuations in their share prices. As the price of stocks are determined by the law of demand and supply Google from its intial public offering price of $85 has reached a peak price of close to the $800 mark. Below is a graph which shows the price fluctuations for the year 2008,2009,2010, 2011 and 2012. (Yahoo Finance, 2012) Share fluctuations: 2008-2012

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8.0 COMPETITIVENESS IN THE MARKET 8.1 Porters Five Forces: 1. BARGAINING POWER OF SUPPLIERS: LOW The bargaining power of suppliers of Google is actually low. This is because Googles customers who use their search engine or advertising on internet are their suppliers too. There is no unique supplier of information resource for Google. Besides, Googles Android phone system is successful software working with many different phone companies such as HTC, SAMSUNG, and NOKIA etc. The software has helped them achieving high volume of phones sold in the market and making massive profit. Hence, the suppliers of these items want to keep a good relationship with Google too. (Giarrosso, 2012) 2. BARGAINING POWER OF CUSTOMERS: HIGH

The bargaining power of customers is quite high. This is because customers are free to choose whichever service they want to in terms of sensitiveness of price level. Customers behaviour is to seek for cheaper product or service with same
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quality. Even though, Google are dominant in both internet and software industries, there are still many competitors providing alternatives to Googles offering such as Yahoo and MSN searching or other phone operating system. Moreover, advertising is still a major, important source in generating Google profit. If customers choose not to use their services, they would lose their potential advertising clients. Therefore, this may cause a significant drop in Google profit. (Giarrosso, 2012) 3. THREAT OF NEW ENTRY: MODERATE Because of entry barriers, the threat of new entry for Google is just moderate. It will require a large capital investment to build up a system infrastructure in order to productively operate and effectively compete with Googles services and products. It seems that the investment is risky to new competitors because Google has been in this industry quite long and have their own high reputation. However, there would be a threat to Google if a new entrant just concentrates on one specific of Googles products or services. Because they just specially spend time on researching and producing one specific product, they would successfully do better than Google who have wide range of products and services. (Giarrosso, 2012) 4. THREAT OF SUBSTITUTION: LOW

The threat of substitution for Google is fairly low because so far there is no other better thing than internet. Internet has become an important, essential and convenient tool for human daily use. It is also the more economical way to store massive information than physically storing it. For this reason, searching engine was built to serve the needs of people in such a fast and cheap way of collecting information ever. And Google is well-known of their searching machine for quite long time. (Giarrosso, 2012) 5. COMPETITIVE RIVALRY: MODERATE

The competitive rivalry for Google is currently moderate. Google have their own major competitors in internet and searching services industry such as MSN and YAHOO. However, Google were recognised in the market by public for long time.
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People have been using Google every single day, year after year. Also, the two useful and interesting software called Google Earth and Street View by Google are highly rated by people. Meanwhile, MSN and YAHOO are continuously updating their services and software but they need to put more effort as well as time to be as successful as Google are. Hence, Google is dominant in this type of industry. (Giarrosso, 2012)

9.0 FINDINGS: Throughout the report and analysis, we found that Google is a very strong company in the world market of internet service and software. Google has archived number of successes which are following: (Harrison & Howe,2011) 1. Searching machine system: Google is seen to be the best searching machine on internet at present It is very reliable and friendly with all users The operating of its searching machine was made to be simple and fast in order to facilitate peoples daily use The searching machine comes with 88 languages which is helpful for local users It localizes the results according to the regions of users. It also has Page-Rank technology which allows users to access to important and relevant pages first Google owns a very strong professional networking space Another interesting point is that Google acquired YouTube which offers video services to users for their search results Google also offers a vary number of other useful products and services for Desktop, Mobile phones, Websites and other Hardware products, etc.

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2. Operating and Financing activities: Google has a very large market capital which was 185.61 billion according to Yahoo Finance 5 Dec 2009 It had 22 billion in its war chest according to Adam Ostrow 15 Oct 2009 Google has high reputation, considered to be in the top 10 brands in U.S Due to its economy of scale advantage, Google has a low operation cost regarding its products and services. Regardless to the global financial crisis has happened in 2008-2009, Google did not struggle and still succeed its profit goals. Google also employs many professionals who are PhDs to provide best researches on products as well as services of Google to customers.

10.0 RECOMMENDATION: After doing research on Google Inc, we believe that Google is a strong, healthy and high profitable listed company in the market of internet services and information technology products. However, according to Porters five-force analysis above and our research on the way Google searching services operating, we found that there are some plausible weaknesses and threats which are: Privacy issues about the ownership of content as well as the issues of users personal information Federal lawsuit about customers search habit Legal trials For advertising services, cost-per-click policy would confuse and disappoint its clients. This might result Google to lose them Users would end up without institutional subscription If Google decides to be a portal, it will lose its simple and user-friendly interface which many users already get familiar with. Google is facing strong competition from Yahoo and MSN. This could cause Google to loose its market share

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Spammers might take opportunity to fake high-ranking websites which contains many links due to Googles ranking technology The accuracy of the search is about 60%, still having many errors The cost of data-center is climbing up.

Therefore, it requires Google to seriously pay attention on these problems. The problems need to be considered and quickly solved. Customers satisfaction is the priority. Hence, we recommend that Google needs to immediately fix those current difficulties which limit its potential volume of customers in future. Besides, Google also should keep encouraging its IT team doing research to create more useful, fast, simple and up-to-date services and products. By doing so, we strongly believe that Google will not only increase the sale revenue as well as the net profit, but also its reputation and confidence. (Harrison & Howe, 2011)

11.0 CONCLUSION After assessing the financial reports and having a very close over view, the past four years revealed Googles experience in managing growth, 2008 also revealed the breaking point between Yahoo and its competitor. During these period, Google made the acquisition of Double-click, the first worldwide full- automatic advertising system and have a very strong position in the market where as, Yahoo was loosing its partnership with MSN on advertising platform. However, Yahoo disposes of less cash and has a high level of working capital but they are getting better year after year. Currently, Google dispose of a high amount of cash available for new external growth on international markets and strong competition with Microsoft. On the other hand, Google is also facing some issues with Apple regarding their Android System, still its a good sign for shareholders that the company is continuously working on their new project and making sure to utilize their resources for the best output.

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12.0 BIBLIOGRAPHY:

Darkwah. K.F (2010) GOOGLES BUSINESS STRATEGY: AN EMPIRICAL ANALYSIS OF THE STRENGTHS; WEAKNESSES; OPPORTUNITIES; AND THREATS (SWOT) OF GOOGLE. [online] Available at http://addghana.com/component/content/article/2-latest-news/17-swotanalysis-of-google.html accessed on 2nd October 2012. Dwivedi, J. (2008) Googles robust strategy and business model. Available from: (http://www.iproceed.com/blog/2005/02/googles-robust-strategy-businessmodel.html) Accessed on 12-11-2009.

Google Inc Annual Report 2008,2009,2010,2010 [online] available at http://investor.google.com/documents/20101231_google_10K.html#toc120214_6 accessed on 25th September 2012. Giarrosso.S (2012). Google: Porters Five Forces. [online] available at http://mis7160team4.wikidot.com/forum/t-449120 Accessed on 21st September 2012.

Harrison.A & Howe.R (2011). Google SWOT Analysis: Strengths, Weaknesses, Opportunities and Threats. [online] available at http://www.googlenewsonline.com/google-swot-analysis.html accessed on 5th October 2012. LaFRANIERE. S(2010). China Issues Warning to Major Partners of Google. [online] available at http://www.nytimes.com/2010/03/15/world/asia/15google.html?_r=1&

Shiels.M (2008). Google denies staff 'brain drain'[online] available at

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http://news.bbc.co.uk/2/hi/7389179.stm Unknown ( No date). Google Inc Basic Share Chart. [online] available at :http://finance.yahoo.com/q/bc?s=GOOG+Basic+Chart accessed on 10th October 2012. Unknown (No Date) Google Profile. [online] available at thttp://in.reuters.com/finance/stocks/companyProfile?symbol=GOOG.O Unknown. ( No Date). Google company overview. [online] available at http://www.nasdaq.com/markets/ipos/company/google-inc-633170-39207 accessed on 2nd Ocober 2012

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