Mirzet Muminovic

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Innovation Management Report Google Inc Innovation is something that has enabled companies and people to develop ideas that have benefited the world we live in today. It is through innovation that todays society has been shaped with the technological advancements such as internet, music and communications. The following report will focus on one aspect of the internet advancement the Google Inc Company. 1.0 DEVELOPMENT OF GOOGLE: [1] Google Inc was designed by two Stanford university students Larry Page and Sergey Brin as part of their final year design project. The two students were part of the Stanford Digital Library Project (SDLP); and the aim of the project was to design a single integrated digital library system. The initial idea began in March 1996; where Larry Page considered the mathematical properties which enabled the World Wide Web to function. The initial system proposed was called Back Rub and its main aim was to develop an algorithm that would rank web pages in order of importance rather than the number of times key words appeared on the web site. This was the turning point in the development of the search engine itself and is what distinguished Google from the other search engines that were available at the time; such as Rankdex and Yahoo. The Back Rub system was then developed further by Page and Brin; and was run from the Stanford server until it consumed too much band width. It was then operated from Pages home and on September 1997 the Google Brand was developed. The company developed at an alarming rate and as result the company offices moved to the Silicon Valley in 1998 and then finally moved to Mountain View; where it has remained. The company then developed from strength to strength through investments from other companies having their company registered on the Google domain. Further revenue was generated through small advertisements being placed on the site itself. However the main source of revenue for the company is still what they charge companies for registering on their domain (usually $0.05 per click) [2]. From here the company has branched out in to other fields that have kept them at the forefront of the technological era. Google Inc has developed applications such as Google maps; satellite, news, shopping, G-mail and video. This is an excellent example of the innovative nature of Google as it was the first search engine that would allows users to search for particular web
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sites; but at the same time keep up to date with current affairs as well as being able to locate places anywhere in the world and view them through the use of satellite imaging. 1.1 Google Time Line: The complete time line for Google Inc can be seen in reference 1; figure 1 shows the major milestones in the companys development.

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(Figure1: Time line of Google Inc)

1996 Page & Brin develop search engine called Back Rub. Google.com registered as a domain.

1997

1998

Google rents office in Silicon Valley garage; working with 8 employees. Google opens offices in Palo Alto as the company begins to expand. Google becomes available in 10 languages
Google image search facility launched. First search engine allowing users to search specifically for images. Google announces partnership with AOL to increase customer base.

1999

2000

2001

2002

2003

Open offices in Dublin, China and India.

2004

R&D centre opened in Tokyo; due to Japanese technological advancements. Google Map is launched after acquisition of Where2. Google, Finance and News are launched. Google Earth is launched. Google earth is updated with improved satellite imagery. Google becomes available in 41 languages.

2005

2006

2007

2008

2009

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2.0 DRIVING FORCES OF INNOVATION Various factors which have enabled Google Inc to become a leading and powerful online based company in todays global market. Factors such as society needs, culture and organisational structure have all contributed to the establishment of this trademark. Therefore the next part of the report will identify the involvement of these factors in the companys development. 2.1 Society Needs: The reason why Google Inc has been so successful is its popularity within todays society. At the time of its development other search engines were available; however what made Google so different was the way that it carried out the searches; making it popular with users and as result more and more companies opted to have their companies listed on the Google domain. The Google search engine enabled the user to view relevant sites rather than sites that had the most number of key word present; making access to information quicker and easier; and also it meant simpler searches could be used. This was a key factor in its success as at the time as use of the Internet was increasing; as well the introduction of online services such as shopping; communicating and video streaming. As a result societys views and demands changed for internet providers; they wanted quicker and easier ways of using the internet; and wanted information available to them immediately rather than searching through pages and pages of possible sites. This is an example of knowledge push and needs pull leading to innovation [3]. The needs of the users changed along with their life style and as a result caused Page and Brin to use their knowledge in the computer science field to develop such a system. 2.2 Culture: Culture and Society needs have had a very similar effect on the innovation of Google Inc. The culture today is has moved more towards a technological demand; and as result online service providers have had to meet the needs. Todays culture is a lot more dependent on the internet, especially search engines. They are the first port of call when trying to obtain information online; consequently Google Inc has developed a search engine that is quick and easy to use, but at the same time offering alternative
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applications such as maps, weather and news that todays society is looking for. Fusion of map, mail and video technology has made the Google search engine so popular and innovative in producing various applications. The reason why this has been made possible is not only to do with the culture of todays society but also the company culture itself. The Google mission statement is Organise the worlds information to make it universally accessible and useful. The company prides itself on the fact that is has produced an environment for staff that is both relaxing but stimulating at the same time; to ensure creativity and innovation is constantly being exploited. The way this is done is through initially the set up of the offices. The company has facilities such as offices and computers; but also bikes to travel to and from meetings; wine tasting sessions and dance classes [4]. Not only is the organisational culture innovative but also the employment process; The company seems to favour ability over experience [4], as they believe that someone who has experience may have developed a particular style of working; where as someone who has no experience will be able to think in a different way resulting in innovative thinking. Furthermore the culture within the hierarchy is also different and innovative, as it allows employees to speak directly and challenge if necessary the owners and other senior management through regular meetings. The effect this has is that it makes the employees feel that they too can make a difference and allows their voices to be heard, and as a result they will be more incline to ensure the company is continuing to move forward in the right direction. The organisational culture encourages innovation not only through the way the company is operated but also through the environment employees work. The only way that this has been made possible is, due to the owners Page and Brin being open minded and innovative themselves resulting in the Google atmosphere. 2.3 Organisational Structure: The way that Google Inc is structured makes it a very innovative company. The creators of the site itself have implemented a system where by shareholders who invest have the ability to say what the company should look into or move into. This is very different to the way most companies are operated in that they usually operate with a CEO and other management who report back to the share holders; and then a decision is made. This
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method had the potential of a takeover by shareholders; and as a result Brin and Page implemented the Dual Class Voting Structure [5]; which meant that they had 10 votes each where as share holders only had one to prevent events like this from occurring. This enabled them to maintain control of the company and its future. Not only is the management structure of the company lead to innovations but also the companies employees. The staff employed come from a very versatile back ground and this is the key philosophy at Google; that different minds will perceive a problem and solution differently. As a result the company has weekly meetings that allow employees to discuss particular problems they may be facing as well allowing others to put forward potential solutions. Furthermore the company encourages employees to go off and investigate solutions to potential problems outside of the projects related to work [6] on working hours. This is one of the major contributors as to why Google is so innovative; it enables a network to be introduced and to develop the innovation. The effect this has is that it improves the efficiency and learning as well as introducing collective risk taking and intersection of different knowledge sets as well as ensuring a creative climate [7]. This means that several different employees from completely different back grounds can be looking for a solution to a particular problem; resulting in a broad range of ideas being put forward. Not only is innovation encouraged in this aspect; but also Google Inc allows employees to become share holders in the company itself; meaning they are directly affected by the financial success of the company [5]. This drives employees to improve Google applications further to ensure the company is successful as well as producing new applications continuously. 3.0 INNOVATION MANAGEMENT STRATEGY In order for the Google Inc Company to remain successful innovation has to continue. However it also needs to be managed to ensure that the company is developing products which are both necessary and useful. A management strategy from another company cannot be copied as it will not apply to the Google Company; consequently core values need to be in place to ensure a management strategy can be developed. The core abilities in managing innovation are [8]:

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3.1 Abilities for Managing Innovation 1. Recognising finding technical and economic clues to trigger a change. 2. Aligning Ensure the change fits in with the business strategy and is not a reaction to a competitors change. 3. Acquiring Recognise the limitations of the company and obtaining necessary information, knowledge or equipment to make the innovation possible. 4. Generating having ability to produce some of the innovation in-house. 5. Choosing Exploring different options available and ensuring the chosen innovation will fit in with the organisational strategy. 6. Executing Monitoring and controlling of the innovation from initial to final stages. 7. Implementing managing the introduction of the innovation into the organisation and insure acceptance and effective use of the innovation. 8. Learning Evaluate and reflect on the innovation and identify improvements that need to be made. 9. Developing the organisation Embedding effective routines, cultures and ideas in place to ensure innovation continues. 3.2 Google Trademark (IPR) & Revenue Generation The Google management strategy is very different to most companies as the company itself is not your typical organisation in that it is providing a service rather than manufacturing a physical product. The management strategy implement by Google began with the establishment of the Google brand itself. The technology which made the company innovative had been established by 1997 as Page and Brin recognised what was missing from the current market; however the next stage was to establish Google in the market. The logo enabled Page and Brin to brand the company on a global market and also to be identified from other similar service providers such as Yahoo protecting the Google brand.

(Figure 2: Google Logo.)

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The company moved away from using the Google domain as a means for registered companies to advertise their own brands or logos. The reason for this was that Google aim was to provide a service for the public rather than use the site as a marketing tool. The revenue would be generated from the companies registering to the domain rather than the users who use Google [2].This was vital to Googles success as it mean that they remained in control because it prevented companies using the Google domain as a advertising platform rather than a service; this is a major factor why Google is so popular as pop-ups do not appear. However its major competitor Yahoo relies on such advertisements to generate revenue; a major reason why most internet users opt for Google over Yahoo as there is not the potential of advertisement bombardment; unless the user searches for a particular company; then when the company site is entered the company can advertise as much as they would like. This has an effect on revenue generated for example in 2009 the revenue was $ 5.51 billion [9]; whereas Yahoos revenue was $1.6 billion [10]. The reason behind this is thought to be due to the economic crisis, the majority of companies that advertise on Yahoo opted out and resulting in a decline in revenue; however Google revenue increased as it wasnt reliant on this source of revenue. This is something that makes the Google Company innovative not only in the service it provides but also in the method it generates revenue. 3.3 Google Innovations Once the Google trademark was established and the company developed as did the market they were providing to. This meant that innovations that would follow needed to be within the business strategy of the company. The first major innovation to the Google search engine was the availability in different languages; this was something that had not been available from one service provider at the time; and as a result the innovation was welcomed. 3.3.1 Timing of innovations: The key to Googles innovation management is the timing of the new applications, for example the introduction of Google in various different languages; initially available in only 10 languages. The reason behind this was that the languages it was available in English, Spanish, and German etc these were countries that the internet usage was at its highest in 2000 because they were the most developed at the time. This meant that more and more
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people could access the Google search engine and therefore its popularity and exposure would increase, and as a result more companies would register resulting in more revenue. In 2000 the maximum number of searches on Google was 100 million per day, as oppose to 1998 10,000 per day, the number has vastly increased to 2 billion searches per day [11]. Further applications such as maps, video and shopping were also introduced at specific times to ensure successful integration. 3.3.2 Acquisition of Companies, Employees and Technologies: Another example of their management strategy is the introduction of the Google map facility in 2005. The main reason why it was launched at this stage is due to the lack of technology available. The initial concept was conceived by Lars and Jens Rasmussen who owned the company Where2. Page and Brin along with Googles vice president Vinton G. Cerf who is responsible in identifying new technologies; acquired the company in 2004 [13]; and with the help of the Google team developed Google maps [12]. This is a very effective innovation strategy by Google Inc as it enables them to brand new technology as their own through acquisition of smaller companies who have the potential for great ideas. It is through this strategy that Google has been able to stay ahead of competitors with new applications constantly being developed. Acquisition of smaller companies by larger more powerful companies is common; however the difference with Google is that it targets companies that can integrate well into the Google culture and strategy rather than companies that will just generate large amounts of revenue but or aimed at a completely different market. Google as a whole is an innovation champion rather than just one person; it is thanks to the culture, organisation and the employees that keep Google innovative and moving a positive direction. If we look at the senior management they have employed they use a variety of different people from engineers to marketing experts to sales executives [12]. It is through the diverse employment strategy that they are also able to continue innovation but at the same time manage the innovations as it allows experts in various different fields to identify potential flaws in ideas or improvements that can be made. So not only is Google acquiring technology and equipment it needs but also employees that aid in the innovative nature of Google.
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4.0 THE FUTURE OF GOOGLE Google Inc is moving towards other applications mainly to improve communication between users; and this may be in the form of VOIP system through Google domain or MSN format. Furthermore Google is looking into the music market; and the increased popularity of internet downloads; however there is the potential for legal problems if not developed properly, like in the case of Napster. This is done through acquisition of companies such as Audio scribbler and World 66 [13]. In order for Google to continue its growth it must maintain its innovative nature to keep ahead of its competitors such as Yahoo and Microsofts Bing. Other applications that are being explored are further improvements to the Google satellites; as well as traffic mapping providers for an online form of satellite navigation. 5.0 CONCLUSION Innovation is something which is vital in the market that Google is involved in. To continue successfully it must remain at the forefront of the Google Company business model to ensure success; this will be achieved if the company continues with the current strategy of encouraging innovation through the office environment, staff employment and acquisition of necessary companies, technology and staff.

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