Larry Page and Sergey Brin were both students at Stanford University studying computer sciences. During their stay at Stanford, in 1996, they developed an algorithm able to search the internet effectively. This algorithm was known as ‘BackRub’. On 4 September 1998, Google was offcially founded as a company, and the search engine proved very successful. In 2000, Google began selling advertisements which were based on search keywords. The company eventually moved to Mountain View in 2003 and was taken public in 2004. The company experienced a fast growth and soon became one of the largest media companies in the world. The company launched a number of new features in a relatively short time span. In 2002, Google News was introduced; in 2004, Gmail; followed by Google Maps in 2005. In 2006, it bought YouTube, and Google Chrome was introduced in 2008.

With its growing success, its competition became more ferce also. Microsoft offered Bing as a search engine and offered a competing webmail service under the name of Hotmail. Also Microsoft offered Windows Live Local as an alternative for Google Maps. Google had already introduced Chrome as a web browser, but it also began competing with Microsoft’s operating system, Windows, by introducing the Linux-based operating system Chrome OS. Google was hit hard by the fnancial crisis in 2007 and 2008. Revenues from selling advertisements declined sharply. To improve its effcacy in selling ads, Google agreed to buy DoubleClick in 2007. This marked the start of cookie-based tracking. Google grew further, and in 2014, the company had more than 70 offces in 41 countries.

In growing the company, utilizing the competencies of others has been crucial. Getting access to competencies can be achieved either through acquisitions, such as YouTube, or partnerships. Google had been very active in forging partnerships. For instance, Google teamed up with NASA in 2005 to explore large-scale data management and distributed computing. Part of this collaboration was the building of a Google Research and Development centre at the Ames Research Centre of NASA. Another partnership is the one with GeoEye in which it launched a satellite which provided Google with high-resolution imagery for Google Earth. Another way of getting access to resources is investing in startups and Alliance strategy formulation 29 scale-ups. On 31 March 2009, Google established a $100 million fund. This commitment was raised to $300 million annually. Since 2015, Google Ventures has been renamed GV.

One of the companies in which Google Ventures has invested is HubSpot.

Questions 1 What are (strategic) motives for Google to prefer collaborative agreements over mergers and/or internal growth?
2 What problems may Google and HubSpot experience as the alliance progresses? How can they overcome these problems?
3 To what extent is the alliance agreement between Google and HubSpot typical for the ICT industry? Explain whether the alliance is likely to change industry structure and competitors’ strategic behaviour.