Google Ecosystem

Building an ecosystem: the Google Model Business-to-Consumer
by Kurt Rodenhizer, MS, MBA, June, 2007e

Bears and Stearns define an ecosystem as a community interacting as a functional unit which creates a situation where all parties benefit. The Google Ecosystem has been the subject of much debate because Google’s success has been hard to ignore. Their ecosystem relates to the partners and affiliations that they have developed–. especially when the group as a whole has an impact on people’s lives.

Perhaps no other company has grown as fast as Google. Their search service revenue went from nothing in 1998 to $5 billion through June of 2006 and they now employ 8,000 people. Google’s cash and short-term investments now top $10 billion.

Google is building an ecosystem through the penetration of partnerships and subscription services and they are spending a lot of money to build power. Google sideswiped Microsoft in December to lock up the search ad business at AOL, paying $1 billion for 5% of the Time Warner division. Google has purchased over 50 software firms to provide online applications such as calendars, social networks, maps, blogs etc. They have recently added a number of new products including Google Earth, GMail, Google Video, Google Talk, Writely, and YouTube. Google Ecosystem segments include the 300,000 advertisers who participate in Google’s AdWords programs, content creators who agree to allow Google to embed third-party advertisements and subscribers to the numerous services and products. The implications outside of Google can be viewed as an investment opportunity or business strategy (how to position a company to best flourish in the Ecosystem).

Significance:

Google’s emerging ecosystem is important because it cuts across several types of sectors and has an impact on the way we conduct business. Take for example researching information, obtaining competitive intelligence and card cataloging literature. There is no question that these enhanced tools affect people’s lives and businesses. Combined with other “eProcess” type tools, the Google Ecosystem can certainly have an impact on world economy. Although the Google Ecosystem is not a household word at this time, it can be expected to have more impact in the coming years. The financial potential of the growing Google Ecosystem gets into product categories that include hardware, software, systems vendors, resellers, suppliers, and partnering. The concept of mashing is facilitated by Google’s open architecture and allows for a multitude of plug-ins to work in conjunction with Google programs in order to greatly expand potential service and product offerings. AdWords, AdSense and Froogle give Google the potential to generate an ecosystem related to buying and selling of products and services. Google’s platform supports applications as diverse as maps, Web logs, as well as online videos. Google’s growth in number of searches per day (an estimated 350-400 million per day) underscores the potential of the Google market.

In his article “Chaos by Design” Adam Lashinky implies that Google is growing too fast and lacks organization and direction. But right now, who cares really. They are hugely successful and they affect so many people with their Ecosystem that Lashinky used the expression “everyone works for Google” in his article.

References:

The Google Industrial Complex., By: Hardy, Quentin, Forbes, 00156914, 10/16/2006, Vol. 178, Issue 8, Academic Search Premier

CHAOS BY DESIGN., By: Lashinky, Adam, Fortune 07385587, 10/2/2006, Vol. 154, Issue 6.