In this case study we report on Google and present details on the company from its

founding team, its corporate entrepreneurship and its successful business model. We
look too at how it has been resourced and its financial performance including its
growth strategy, product innovation and intellectual property. We also look at the
impact of open innovation and networking in Google before concluding with a review
of its acts of philanthropy and corporate social responsibility.
Chapter 1: Founding team (background), opportunity recognition, team
formation/management
Googles founding team confirms that the most successful entrepreneurs are those that
work with networks (Ruef, 2002; Davidsson and Honig, 2003; Ruef et al., 2003).
Partnerships offer a greater range of expertise than any one individual (Davidsson and
Honig, 2003). Teams such as Googles founding team that possess complimentary and
diverse skills and are more robust and more likely to succeed (Roure and Maidique,
1986; Ruef, 2002).
Their initial algorithm was not created to make money but simply to have an impact
on the world (Miller, 2008).

Whilst Brin and Page might not be opportunity

recognition entrepreneurs their subsequent rise to global dominance adds weight to

the view that networks are vital for success (Greve, 1995).
Team formation/management
Googles culture was the most important factor in stimulating its entrepreneurial
successes.

Google sought to attract the brightest minds (Miller, 2008).

Their

approach to hiring was brutal, but it did mean that those who made it through were
well above average (Hamel and Breen, 2007). Open innovation (Chesbrough, 2004)
is very much part of the team ethos at Google.
Google has created a management and team structure that supports a culture where
brilliant minds and ideas are respected and rewarded and where free perks rather than
fear and hierarchy provide the extrinsic motivation.

Chapter 2. Googles Corporate Entrepreneurship

Google has several strands of corporate entrepreneurship that work together to
maintain its success. Google uses The Enabler model which means that all staff can
contribute new ideas and some will get the necessary resources from senior
management (Shane & Venkataraman, 2000).
1. Google provides an open innovation culture and diverse communication channels.
Everyone is hands-on contributor and feels comfortable sharing new ideas
(Google.com, 2015). Channels, including Googlegeist, and Google Moderator are
effective ways to spread new ideas (Icmrindia.org, 2015).
2. Google protects time for new ideas (e.g. Google email (Icmrindia.org, 2015; Harvard
Business Review, 2014)).
3. Strong support from the management team is a key factor to put new ideas into
action. The Google Product Council provides resources ranging from product strategy
to money to technology experts (Wolcott & Lippitz, 2007).
4. Google invests a significant amount in R&D (15-20% - Investor.google.com, 2015)
and specific awards (over 10 million founders awards (Harvard Business Review,
2014)) to motivate its innovation and corporate entrepreneurship.
5. As stated above Google recruits the right people which promotes more new ideas and
brings effective and deeper discussions and maintains the entrepreneurial DNA
(Wendland, 2015).

There are two main challenges to The Enabler model. Firstly, a strong executive
management team and sufficient funding are expensive costs even to a big company
(Wolcott& Lippitz, 2007). Secondly people apply for support money on business
projects that are not really keen on, which result in resource waste (Wolcott& Lippitz,
2007).

Chapter 3. Business model/revenue

1. Search Engine
Googles allows customers to access all types of content online, such as maps, blogs,
etc. (Business Model Innovation Matters, 2012). Roughly $59.8 billion in 2013,
taking an 88.2 percent market share by 2014 (Statista, 2015).
2. Adwords

Google AdWords is a commercial service that enables advertisers to compete to show

brief adverts based on keyword which are defined in advance by advertisers. 70% of
Googles income is generated by AdWords in 2013 (Alexander, 2015).
3. Adsense
This is a program which allows publishers to show adverts, which are targeted to
particular site content and audiences. Google AdSense created nearly $3.4 billion
(22% of total revenue) in Q1 2014(Investor.google.com, 2015).

4. Google email
Gmail is the leading email service in the world (Frederic, 2012) and has almost 425
million users, nearly five million business users are government agency users in 45
states of the US (Sean, 2012).
5.Google+

Google+ is a social network and social layer for Google service (Official Google
Blog, 2015). 625,000 new users everyday in 2011 (WebsiteMonitoring, 2012) and
1.203 billion visits every month (Bullas, 2013).

Chapter 4: Resource allocation in Google

Google uses 70% of its resources to further expand its core businesses. 20% is used to
develop relative businesses, e.g. Google News etc. and the remainder is invested in
innovation and new business. Google ensures that it maintains its current market
advantage and it also keeps finding new opportunities (Schmidt, 2014).
Googles financial performance
2011 saw a 7% decline in Googles stock price caused by the decrease in the value of
two of its core businesses. In recent months, the revenue from advertising on Google
has been slowing down and the ad-rates or cost-per-clicks have shown a consistent
decline over a long period of time.
Meanwhile, Facebook (Googles biggest competitor) has become a threat in the
market. However, Google still has its competitive advantage as it has the largest share
of digital advertisement spending in the world; Facebook is a distant second.
Although Google has sustainable income from its fundamental business, it still needs
to consider the new driver to stimulate its growth (Dougherty, 2015)

Figure 1: Google YoY Ad revenue addition

Figure 2: Google YoY CPC growth

Chapter 5. An Analysis of Googles Growth Strategies

Wynarczyk (2015) indicates there are two factors influencing companies growth,
namely market, and entrepreneur/founding team/management.
1

Market

Googles has effectively satisfied customers requirements and gained a huge market.
Google is a knowledge intensive firm, therefore has the competitive advantages to
expand globally (Wynarczyk, 2015). As Google was born global is has benefitted
because a global market could provide more opportunities and generate more profits
than local market.
According to Wynarczyk (2015), there are strategies such as integrative growth
strategy, modular or network strategy and diversification strategy which Google has
implemented mainly through acquisitions and cooperation.
2

Entrepreneur

An entrepreneurs characteristics have direct impact on the firms growth (Baum and
Locke 2004). The founders of Google have adequate knowledge and discerning
market insight, which offered a solid foundation of Googles growth.
Wynarczyk et al. (2013) state that if firms are short of money, independence and
autonomy might hinder their growth. Googles entrepreneurs were not constrained by
this dilemma and they received capital from outsiders.

Chapter 6. Product Innovation and Technology

Google has built up successful solutions to manage its product innovation and
technology process as follows:
Internal - Three Passcodes
(1) Product: 70% of employees time on core business, 20% on core related
projects, and 10% on new products (Battelle, 2005).
(2) Task: 80% of employees time on regular work and 20% on non-core
projects (Finkle, 2011).
(3) Staff: 3-6 means the member number of a development team that is
small but compact in order to reduce the internal cost (Quora.com,
2015).
External - Innovation Ecosystem
Googles users, advertisers, and third-party innovators established a righteous circle
with benefits for all (Harvard Business Review, 2008). (Figure-3) Briefly, these sites
offer the information and revenue to Google.

Figure-3: Googles Innovation Ecosystem

Source: Harvard Business Review, (2008). Reverse Engineering Googles Innovation
Machine.

Available

at:

https://hbr.org/2008/04/reverse-engineering-googles-

innovation-machine [Accessed 28 Apr. 2015].

Intellectual Property Rights

1. Trademark
Forbes in 2011, Googles trademark had valued at USD 44 billion. Its trademark
Google is its single most valuable asset (Stonefield, 2015).
2. Copyright and Registered Design
In 2015, Google has processed 100 million copyright takedown requests, pointing that
Google acts a significant role in the endless battle between the pirates and copyright
holders (Ubergizmo, 2015).
3. Patent
In 2011, Google bought Motorola for USD 12.5 billion, mainly to grab its trove of
17,000 patents and 7,000 patent applications (Figure-4). In 2013, Google had owned
more than 51,000 patents and it placed the third or fourth largest software patents,
behind IBM and Microsoft (MIT Technology Review, 2013).

Figure-4: U.S. patent awarded per year, selected companies

Source: USPTO (United States Patent and Trademark Office)

Chapter 7. Open Innovation, Networking and Joint Ventures at Google

Open innovation
Chesbrough (2006) introduced the concept of Open Innovation. Google celebrate and
champion innovative practice by opening themselves up to innovation from all angles
both internally and externally. This is reflected in their 9 principles of innovation,
which include statements such as default to open.
Networking.
Allee (2002, p.6) describes value networks as any web of relationships that generates
both tangible and intangible value through complex dynamic exchanges between two
or more individuals, groups or organizations. Google value networks often tend to
be complex and like a constellation in their nature. A great example of this can be
seen from the Android platform. The quality risk inherent in this way of working do
not seem to negatively impact on Googles positioning within those networks.
Joint Ventures
Finally Google do work in collaboration with other companies in joint ventures.
These companies tend to be huge organisations such as NASA, Facebook, PwC etc.
Googles approach seems to be focussed on the acquisition of smaller companies and
their technologies wherever possible but it will work in joint venture with those it
clearly cannot / should not acquire.

Fig 5

Chapter 8. Corporation social responsibility and Philanthropy in Google

Corporate social responsibility (CSR) has always been a very important issue in the
business field. It has long been related with business ethics, corporate performance,
corporate responsibility and stakeholders (Berle, 1931). As for Google, since its
foundation, it has always committed to active philanthropy and addressing issues like
global climate challenge, education and poverty improvement actively (Google.cn,
2004). In the sectorial overview report (2012: 5) on corporate social responsibility in
May 2013, Google ranked the second in the top ten of the world organizations in
committing the best CSR (Figure 6).

Specifically, Google has acted its philanthropy to set up Google.org entrepreneurially

as a non-profit program to provide funds for the start-up companies, partners with
venture capitalists that were willing to solve the worlds serious problems like poverty
or pollution (Scaife, 2008). As well, Google has developed the better and healthy web
by preceding the environmental protection strategies itself, such as low-carbon
consumption, renewable energy technology (shown on Google. Green) to improve its
impacts on environment. By implementing CSR, Google not only increases its market
share or profits, but also strengthens its brand awareness and image (Moon, 2007).
Conclusion

This study indicates that the entrepreneurial culture of Google could be utilized in any
organizations. However, Google needs to carefully maintain the current advantages to
compete with threats from other competitors. Moreover, it should ponder the new
business model to explore other opportunities. Not to be afraid of encountering
failures, but learning from them and then develop your own as Google to create your
value and quality maximally.

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