THE IMPORTANCE OF WEB SEARCH TECHNOLOGY, INNOVATION AND BUSINESS MODEL INEXPLAINING GOOGLE'S SUCCESS

摘要

Among the fast growing technology based companies, Google has shown an outstanding performance in the last few years. Its revenue stream, based on a virtual infinitely scalable search advertising model, relies ultimately on the performance of the search engine. The main advertisement product is the selling of a high margin, pay-per-click, content sensitive advertisement on its own site - a product called AdWords. As billion daily queries (there were about 4.8 billion in October, 2008 in U.S.) get faster, relevant and more accurate, more interest Google site will attract and, one may expect, more effective will be the advertisement, in terms of return over investment for clients. Besides its distinctive hardware capacity and expertise, Google has a strong culture and a suitable management style, both of them responsible in large part for the attraction of a high quality workforce. The methodology used in this study was based on literature review, published sources, interview with Google senior employees and case study. The bibliographical research emphasized the following subjects: technological base of web search engines, innovation management, management, and business model. The case study was held at the Brazilian branch of Goggle. The outcome of this research led us to two main conclusions: the technological infrastructure assembled by Google since the early years and the incremental innovations on the search engine form a base over which the entire business depends on. This solid base not only supports the search engine itself, but also makes available to software engineers, statistics experts and business developers an unprecedented computational capacity and an almost infinite amount of data related to hundreds of thousands of queries that Google "sees" every day. This unusual environment led to the development of many other related applications, such as Google Maps, Gmail and Google Apps. On other hand, it was clear that the web search business has no switching costs to the end user and the business continuity for Google relies on the sophistication, celerity and accuracy of the search engine. Performance mechanism of continuous improvement is complex and requires the most important effort of the company. PageRank, hypertext-matching analysis, MapReduce, and Cloud Computing are examples of high complex technologies that boost firm competitiveness and add an inestimable value to the company. The effect of learning curve over core technology and the huge company technological infrastructure can be both considered as high entry barriers, a dissuasion mechanism to potential competitors.