Google wasnt the first Internet search engine. At least 19 search engines existed including

Lycos, Alta Vista, Excite, Yahoo !, and Ask Jeeves before Google was introduced in 1998. Nor is Google the only Internet search engine currently operating. Currently, at least 32 Internet search

engines exist, including Ask.com, Bing, Baidu, and DuckDuckGo.

However, despite what appears to be an incredibly competitive industry, Google reigns supreme, with a U.S. and worldwide market share in excess of 60 percent of all Internet searches. Indeed, Google has been so successful that it has been verbicized. Now, to google something means to look something up on the Internet. This is the case even if you dont use Google to search the Web. Many have wondered what has made Google so successful and whether it will be able

to maintain and even extend its success. Three attributes of Google have been most widely

cited.

First, Google is technically very competent. In the mid-1990s, all other search engines

counted key words on Web pages and then reported which Web sites had the most key words.

Google conceptualized the search process differently and used the relationship among pages as

a way to guide users to those Web sites that were most helpful to them. Most people agree that

Googles approach to Internet search was superior. This technical competence has enabled Google to buy the technologies of several firms including Keyhole and Global IP Solutions and then to leverage those technologies into successful Google products including Google Earth and Google Hangout.

Second, Google has been unusually successful in monetizing its software that is, finding ways to make the software it gives to customers for free generate revenues for Google. Perhaps the best example of this is Googles AdWords program a system that uses demand for Google advertising to precisely price the value of clicking onto a Web site. In 2012, Google advertising generated $ 10.42 billion in revenue.

Finally, Googles founders Larry Page and Sergey Brin are convinced that Googles unique organizational culture is central to their success. Google has a playful yet demanding culture. Developers are held to the highest standards of performance but are also encouraged to spend at least 20 percent of their time working on their own personal projects many of which have turned into great products for Google. Google expects to meet its product announcement dates, but when it issued some new shares in 2005, it sold 14,159,265 shares, exactly. Why? Because those are the first eight numbers after the decimal point in pi (3.14159265). Googles unofficial slogan a not-very-subtle dig on Microsoft is Dont Do Evil. So, Google doesnt develop proprietary software that it then attempts to sell to users for high prices. Instead, Google trusts its users, follows their lead in developing new products, and adopts an open approach to developing software.

Whether or not these three attributes of Google are sources of sustained competitive advantage is still up for debate. On the one hand, Google has used all three to develop an open source smart phone operating system Android that has emerged as a serious competitor for Apples operating system. Moreover, Google seems to have figured out how to begin to monetize the success of one of its best-known acquisitions, YouTube.

On the other hand, Googles acquisition of Motorola Mobile for $ 12.5 billion seems to have created new challenges for the firm. Justified based on the mobile phone patents owned by Motorola, Google must nevertheless find a way to make money manufacturing cell phones. Motorola failed in this effort the last few years it owned Motorola Mobile. And Google has never before owned a business that actually made tangible products, like phones. There are, of course, lots of different opinions about Google, and it's easy to find them just google Google on the Web, and in less than half a second, you will see more than 2 billion Web sites that are related to Google.

Google has been extremely successful, first in the Internet search engine market and later in related markets. What, if anything, about Googles resources and capabilities make it likely that this firm will be able to continue its success? The ideas presented in this chapter help answer this question.

Make sure to support your answers to the following questions with specific information from the case, the slides, and your own experience

Which firm will have a higher level of economic performance:

(a) a firm with valuable, rare, and costly-to-imitate resources and capabilities operating in a very attractive industry or

(b) a firm with valuable, rare, and costly-to-imitate resources and capabilities operating in a very unattractive industry? Assume both these firms are appropriately organized.

Explain your answer and how does this apply to Google (in the case)? (12 points)