How Google Took Over the Web and Became The #1 Search Engine

Google is a multinational technology company, which focuses on search engine technology, online advertising, and cloud technology, among others…

If you use the internet, then you know what Google is! It’s the search engine that probably led you to this very webpage, didn't it?

Key 2021 Statistics Highlighting Google’s Current Empire

• Revenue of $278.1 billion
• Net Income of $76.0 billion
• Share Price of $144.7
• Market Capitalization of $1.9 trillion
• Total assets of $359.3 billion
• Workforce of 156,500 employees
• Market Share of 92.47% in the search engine market

While the company has trailblazed through the past two decades, it has had its fair share of ups and downs.

Let’s take a deeper look at Google’s journey, to understand how it became a household name and one of the most successful companies in the world.

Google Uses PageRank To Redefine The Search Engine Market

As ubiquitous as Google is today, it wasn’t the world’s first search engine. Yet, it managed to attract the attention of billions of people worldwide and become a leading technological company.

Let’s take a look at how the search engine first came into being.

Google: a Product of a Profitable Ph.D. Dissertation

Google might be the backbone of all Ph.D. dissertations today, but it was once a result of a Ph.D. dissertation itself!

The search engine was the joint creation of Stanford University students Larry Page and Sergey Brin. Another student—Scott Hassan—had also contributed to its development, writing down most of the code for the project, although he left before Google was officially founded. He is cited in the original Ph.D. dissertation as an important contributor.

The idea for Google came as Page researched the mathematical properties of the World Wide Web. Searching for interconnectedness between different web pages, Page concluded that the structure of the internet was akin to a “huge graph.” 

He was encouraged by his supervisor to pursue this idea further, which ultimately led Page and his peers to develop a program that sifted through heaps of information to provide the most relevant results.

Search engines had been envisioned before, so what was it that made Google stand out from the search engines of the time?

The answer is that Google relied on a unique measure of page ranking. Instead of ranking pages according to the number of times the search item appears in them, Page and Brin wrote a program–called PageRank–that would rank pages according to backlinks. So, the engine ranked search results based on multiple factors that took into account the relationship between pages, like inbound links from trustworthy sources. 

That was the backbone of its innovation. 

PageRank wasn’t necessarily a new idea. It was inspired by RankDex, created by Robert Li in China (he was properly credited in Page and Brin’s paper).

It’s safe to say that Google’s innovation strategy lies in mixing available ideas to create a unique product that offers high value to users.

How was Google Established as a Company?

Brin and Page registered the domain name “google.com” in 1997. The title of the search engine was a play on the word “Googol” which was a word used to signify 10100. The name was a nod to the billions of search results that Google would ultimately provide us with.

In 1999, Brin and Page decided to sell Google to their competitor, Excite. Ironically, the company rejected their offer, underestimating Google’s success in the market, maybe one of the most expensive decisions they could make. 

Later in 1999, Google established its office in Mountain View by leasing multiple buildings, which are now known as the “Googleplex.”

Google decided to go public in 2004. It generated around $23 billion through its IPO, selling shares for $85 per share. 

Following the IPO, the company’s stock price quadrupled, and by 2005, Google was valued at nearly $52 billion, making it a forerunner in the media industry.

How did Google Monetize its Services?

The Google strategy for earning revenue was simple: it earned through advertisements.

Apart from its unique ranking system, users flocked to Google because of its user-friendly interface. In line with that, the company sold only text-based ads so that they wouldn’t disrupt the simple aesthetics of the search-result page.

Google charged money based on the number of clicks, allowing different companies to bid their price. The bidding started at $0.5 per click.

While this was a viable option, Google wasn’t the first to come up with this business model. Sure enough, the company was sued by Overture Services—who had invented the pay-per-click model—over infringement of patents, but the case was settled outside of court. Overture agreed to provide a license to Google in return for a number of shares.

Google managed to weed out this little obstacle and even secured investment for itself. However, this turned out to be an issue later when Overture Services—now named Yahoo!—decided to end the partnership in favor of creating its unique search engine.

Despite the competition, Google’s page-ranking strategy and its simple, visually-pleasing interface made it the go-to search engine for most people. In fact, it became so ubiquitous that “to google” became a part of the daily language!

Google Turns to Cookie-based Tracking to Boost Revenue

Google’s streak of success broke in 2006 when its ad revenue plummeted along with its stock, which fell by almost 20%.

Part of this nosedive was due to the high tax rate in the USA. However, this was not the only front Google was facing issues.

Previously, Google was known for its informal slogan “Don’t be evil,” branding the company as a gateway to the ‘truth.’ Yet, in 2006, Google introduced a Chinese service that allowed censorship of anti-government content in China. This created a dissonance between its action and its slogan, raising questions about its audience.

On the one hand, investors were displeased by Google’s revenue growth while on the other, the company was struggling to remain at the vanguard of the market.

The company’s solution was simple: cookie-based tracking.

In 2007, Google purchased DoubleClick, a company that specialized in ad-related services, for a staggering amount of $3.1 billion. Through this acquisition, Google was able to introduce cookie-based tracking into its system, making its simple ads relevant once again.

Key Takeaway #1: Combine An Innovative Approach With Competitor's Novel Ideas To Stay Ahead

Google’s innovation lies in its in-depth knowledge of already-present solutions in the market.

Google wasn’t the first search engine in the market. What made it stand out was its unique page ranking system, but even that was inspired by a preexisting system!

Brin and Page’s project was a success because they combined multiple features. Along with the page ranking system, they also made their interface user-friendly, allowing people to peruse easily through thousands of search results.

Later, Google also took note of how other competitors were earning their revenue. It picked out the most viable options—ad revenues and cookie-based tracking—and used them to establish its position in the market.

Google Expands its Empire Through New Products and Acquisitions

Google isn’t just a search engine today, it’s also an iconic brand.

Throughout its history, the company intermittently introduced new services into the mix, attracting more customers to its numerous websites.

Let’s take a look at how Google grew during the first two decades of the 21st century.

How did Google Expand its Portfolio of Services?

Google’s main revenue source was advertisements, and the best way to attract more advertisements was to expand its platform.

The company started this process by introducing Google News in 2002, followed by Google Shopping, which allowed for easy comparison of products.

In the following years, the company developed a range of other services and applications. For example, Gmail, one of the most popular email providers today, was introduced in 2004.

As always, Google added its unique touch to its services. Gmail, for example, stood out because of its advanced search capabilities. It also offered almost 1GB of storage, compared to its competitors' few megabytes.

In 2005, Google introduced Google Maps, which was a sorry day for companies like TomTom and Garmin. Once again, Google’s user-friendly interface won the hearts of people, and by 2009, the company introduced GPS navigation on smartphones, taking the market by storm.

In 2008, Google decided to develop its own browser. By that time, Mozilla Firefox was already present—so Google hired the Firefox developers to create its browser! Today, Chrome leads the browser market, earning Google a market share of around 60%. 

In the same year, Google also introduced the popular Google Playstore, and three years later, Google+ was launched.

Google+ was an example of a failed experiment. Mirroring Google’s strategy of using available solutions and giving them a unique twist, G+ sought to connect people in a Facebook-like fashion. Unfortunately, lacking the main "social" elements of a social media platform, it failed to stick.

Google was a well-established company so it could afford a few failures. In the next year, it launched the immensely popular Google Drive. Google’s market share in cloud storage services amounts to 25.77% today, with one billion users taking advantage of Google Drive worldwide.

2013 was another lucky year for Google, as it launched its simple and cheap Google Chromecast. This device allowed customers to stream videos from a phone onto a computer or TV. While Google hasn’t paid much attention to this product over the years, it’s still quite popular with its audience.

In 2016, Google launched its virtual assistant. It was a bit late to the party, considering Siri had been developed five years prior, but it was still a force to be reckoned with. Within almost two years, Google Assistant became quite an annoyance to its competitor Alexa (powered by Amazon).

In fact, in 2021, Google’s market share in the smart-speaker industry climbed to 37%, surpassing Alexa’s mere 21%.

Lastly, in 2017, Google launched Google Meet, which was good-timing because the pandemic was just three years away!

Google Expands Through Major Acquisitions

Google’s expansion strategy didn’t just end with introducing new services—it acquired many (quite popular) companies during its short history.

For example, in 2005, Google ‘quietly’ acquired Android for a price of $50 million. This acquisition was not just fruitful because of Android’s large market share in the OS market but also because it allowed Google to integrate its features seamlessly into Android phones.

In 2008, the first Android phone called “T-Mobile G1” was introduced into the market, with Google services playing a huge role in the functionality of the phone. Later, Google and Android together introduced the Nexus One as well.

What’s more, in 2006, Google also acquired YouTube, outbidding other companies (at a staggering price of $1.65 billion). This purchase was especially ludicrous because it gave the company access to online video traffic, boosting Google’s revenue growth. Today, Google and YouTube are the 2 most popular search engines on the web.

On a different note, Google’s Nexus series had fizzled out. Losing hope in its hardware progress, the company decided to fill in the gap by acquiring Motorola Mobility. This company has partnered with Android since then to introduce new phones into the market.

The acquisition cost $12.5 billion. While it seemed like a good decision back then, it didn’t do much for Google’s market share. Recognizing that it was no longer useful to retain the company, Google sold off Motorola to Lenovo at a loss.

Key Takeaway #2: Don’t Acquire Companies, Acquire Audiences and Clients!

Google’s expansion strategy involved two basic components. Firstly, the company continued its innovation strategy of putting unique twists on already present services (for example, Gmail became popular because of its unprecedented storage space).

Secondly, the company made two very smart acquisitions.

The first of these was Android—which allowed Google access to the backend of smartphones. Taking over an OS company allowed Google to seamlessly integrate its features into Android devices, getting Google services under the thumb of every Android user.

While previously, Google might have had to convince Android to approach it as a client, now it could ensure that the OS company was loyal to them and depended upon its services to give customers a holistic experience.

The second of these companies was YouTube. Which turned out to be a massive opportunity in disguise because of YouTube's coming explosion in popularity.

For a company that depended on revenues from ads, this was an extraordinary expansion move.

Google’s Digital Transformation Strategy and Contributions To the Pandemic

Google responded to the pandemic by introducing many technological services which would enable researchers to speed up their process and stay up-to-date with Covid-related information.

Before that, let’s take a look at how Google reorganized itself under a new holding name.

Google Becomes a Subsidiary of Alphabet Inc.

In 2015, Google began a massive reorganization project.

The company had expanded into several areas and restructuring was overdue. Brin and Page decided to create a holding company—called Alphabet Inc.—and to make Google a subsidiary of this newly-formed company.

While Google specialized in internet services, Alphabet Inc. ventured to form new companies such as Verily, Waymo, and Wing.

Each company focused on a different product or service: Verily used technology to advance health research, Waymo was primarily an automobile company, while Wing offered drone delivery services.

Separating these diverse companies from each other and giving Google its own space within Alphabet Inc. allowed the leaders to streamline their operations and organize their revenue in a meaningful way.

Google’s Strategy During the Pandemic

Google maintained a proactive strategy during the pandemic, cementing its reputation as a socially responsible company.

For example, in 2020, Google partnered with Apple to develop the Exposure Notifications System (ENS). This technology would alert people if they were exposed to those who had tested positive for Covid.

The technology was deployed by more than 50 countries and was a massive success.

Google also researched quicker ways to gather virus-related data. Researchers within the company shifted from a time-series-based model to graph neural networks.

Google’s new health studies app was another major contribution to Covid-19 research. This app connected the public with researchers, allowing the latter easy access to on-ground data.

The company also took into account the hoards of fake data circulating on the internet. To counter that, Google introduced many fact-checking measures across different platforms including Google News and YouTube.

Google’s innovations during the pandemic helped optimize the public health response. In addition to introducing new services, Google researched machine learning, developing ways for researchers to get through mounds of information quickly.

Google extended these new tools to areas other than the pandemic, making useful contributions to medical and environmental research.

How Google Digitally Transformed the Workspace

With the advent of remote-access technology—and the disruption created by the pandemic—many offices have found it easier to manage their workspace digitally.

Apart from introducing Google Drive and other related software to the public, Google ventured into a more specialized market by creating G Suite and taking Microsoft head on in office services.

G Suite—now known as Google Workspace—consists of a series of office software including Google Drive, Gmail, and Google Meet. The public gets all these for free, so what’s the difference?

Google Workspace gives companies access to a company email, as well as increases the storage limit for all other software. It’s also far easier to manage users through the G Suite Admin than to go through the hassle of accessing private accounts.

Basically, it’s a digital workspace that allows employees to connect together easily. Conference calls, email threads, and joint calendars—all of these pave the way for smooth communication within the company. Google’s advantage over Microsoft’s services is the easy integration with an employee’s personal accounts and the incredible simplicity in switching between the two. Besides, the users are very familiar with Google’s services in comparison to Microsoft’s services, that very few people use as their personal provider.

Google’s advantage over Microsoft’s services is the easy integration with an employee’s personal accounts and the incredible simplicity in switching between the two. Besides, the users are very familiar with Google’s services in comparison to Microsoft’s services, which very few people use as their personal provider.

Other software and hardware introduced by Google have also paved the way for a smoother workplace experience.

For example, some companies prefer to buy Chromebooks for their employees, to organize the business devices better and to keep a tighter check on the employees.

Similarly, AODocs is another software powered by Google, which allows businesses to organize business documents efficiently.

On the other hand, Duplex is an AI-driven voice interface, which can easily fool anyone into thinking they’re talking to a person—this helps businesses save time on any unnecessary calls.

Key Takeaway #3: Expand to New Categories When You Have Transferrable Advantages

Google has tried many experiments in the past and tried to expand to many large categories, like in the social media space with Google+.

Some have failed, like Google+, but some have succeeded. So, what's responsible for the G Suite's success? What makes this experience different from Google+? It's one specific advantage that Google managed to leverage in its expansion to office software.

People are familiar with Goggle's products. They are familiar with Gmail and the logic of Google's products. Outlook, for example, is not so popular for personal use. In addition, the G Suite is compatible with the rest of its products and makes certain processes extremely easy, like sharing, and collaborating.

Having multiple people work on the same Google sheet in almost real-time and not worrying about merging their version made its adoption much easier. Google reduced friction and addressed the most frustrating aspects of the Microsoft Office Suite while simultaneously taking advantage of people's familiarity with its services.

Google's expansion to office software was executed wonderfully.

Why is Google So Successful?

From starting as a Ph.D. dissertation to becoming one of the most indispensable companies, Google has grown exponentially over the years.

Who owns Google today?

Google is owned by Alphabet Inc., which is the holding company created by Brin and Page, the co-founders of Google.

Alphabet Inc., in turn, is owned by many different shareholders, with The Vanguard Group taking the lead, followed by BlackRock Fund Advisors.

Google’s Mission

Google’s mission is to facilitate the spread of information all around the world.

“To organize the world’s information and make it universally accessible and useful.”

Google’s Vision

Google’s vision is to simplify the process of gaining knowledge.

“To provide access to the world’s information in one click.”

Growth by Numbers

Many lessons can be extracted from Google’s short but fruitful journey.

Add a Unique Twist to Your Products

Your business idea doesn’t necessarily need to be out-of-the-world. It could simply be an amalgamation of already available resources, coupled with some smart aesthetic choices.

One of Google’s competitive advantages was its simple layout, which was one of the reasons why customers jumped ship to Google when it was first developed. This would continue to be the “unique twist,” due to which Google’s market share rose whenever it introduced a new product.

With Gmail, Google broke the market because it identified a gap in storage capacity. So, when Gmail hit the market with 1GB storage, customers flocked to the website easily.

Throughout the years, Google’s business model was based not just on innovation but on identifying the gaps where the “unique twist” would prove to be beneficial.

Increase Your Reach Through Acquisitions

Acquisitions might increase your market share, but a truly successful takeover is when it also opens access to previously untapped markets.

That’s what Google achieved with YouTube. Since ad revenues were its main source of income, it only followed that the next most popular website would boost Google’s revenue!

Create Specific Solutions for Specific Markets

Your product might cater to a large, ubiquitous audience, but you can also tinker around with your product a bit and reserve some parts of your product for specific audiences!

That’s what Google did with G Suite. That’s also what the company had in mind when developing tools like the Health App and Google Analytics.

Google’s digital transformation strategy wasn’t even too complex! It made a few changes to products already available to the rest of us, and by introducing a few specific features, it opened access to whole new markets!

Hardly three decades have passed since the development of Google, yet the company has created history—and the future—in this short time period. Google’s on-point business model, robust digital transformation strategy, and continuous innovation have allowed it to continue to lead and delight its customers with quality products.

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