Before 1999, the Internet was dominated by companies such as AOL and Yahoo who develop their business models as a one-point-stop where registered users could have access to a whole set of things including, e-mail, services, news and other features. Advertising and search was also part of the scheme.
Afterwards, Google emerged with a revolutionary web business concept based on search. The innovative idea that query search results must quickly deliver the most relevant answer to the user efficiently (measured in how fast they send people on their way), changed everything and opened a new path for innovation. Since then, and based on search, Google introduced a whole set of innovative web services and expand the technological platform widely.
"Google runs over one million servers in data centers around the world,[13] and processes over one billion search requests[14] and twenty petabytes of user-generated data every day.[15][16][17] Google's rapid growth since its incorporation has triggered a chain of products, acquisitions and partnerships beyond the company's core search engine." source: wikipediaGoogle grew so fast that they became Internet leaders in a few years. Their technology impacts everything, everywhere, and for many businesses Google and all the web innovation that followed became disruptive to the traditional business model: news companies, publishers, copyright society, content providers, advertisers, regulatory agency and even governments (china) started complaining about Google. Fundamentally, because of the nature of the technology developed, they were dealing with multiple issues and negotiating with many counterparts.
However, Google developed a very strong competitive position with 85% of the search market share, reported by Netmarketshare in August 2010.
In the meantime a new web player quickly arose with a new core business concept: Social Networking. Born in 2004, Facebook crossed 500 million users this year and is competing with Google for leadership as the most popular website.
Apparently these two web giant companies have different core business strategies but it seems that the Social Networking concept is so strong that it is impacting Google's Strategy. Google's attempts to build a social network failed with Orkut, Friend Connect, Google Wave and Buzz.
But recently, Mr. Schmidt (CEO) told reporters that "Google Inc plans to gradually introduce social-networking features starting this fall. Expect to see social tools from Google, but do not expect a brand new social network. Instead, Google will add social components to its core products."
With the debut in the search engine market, Google grew and entered in many business sectors such as communication, advertising, mobile, and now they intend to compete in the social networking arena. Despite the need to keep innovating, I wonder if this strategy is correct.
link Sources:
http://en.wikipedia.org/wiki/Google
http://mostpopularwebsites.net/
http://www.reuters.com/article/idUSTRE68D5FK20100914
http://www.internetworldstats.com/emarketing.htm
New York Times Article
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