Google Success

Perhaps there is no greater testament to Google’s (GOOG) success than the fact that it has become a verb. We google for information in the same sense as we drink water. However, Google as a company has grown far beyond search. In this article, we'll review the business model and strategies that have made Google—along with its parent company Alphabet—one of the most successful companies in the world.

KEY TAKEAWAYS A key component of Google's success is the company's ability to launch a prototype or beta version of a product and continue to make improvements with each iteration. Google's initial business model focused on building a powerful search engine based on algorithms that help people sort through vast amounts of content to deliver accurate results for each search query. Google monetized its search engine capabilities through Google Adwords, an online platform that enables the company to earn revenue through pay-per-click advertising. The company has successfully launched a wide range of other products and services, including YouTube, Google Maps, Google Apps, and Google Cloud. What’s in it for Google? I think you can see the value in Google's unique business model—if we were all to search for the ultimate answer to the ultimate question, what would we use? For us to be able to know the ultimate answer, we'd have to have to be able to access it. Google’s model allows us to access it from anyplace, at any time, on any device. Google also has an uncanny ability to innovate with each new product launch. When I think of an innovative product, I can think of two that come to mind right off the bat: Google Chrome browser— This was the company’s first browser, and was quickly followed up by Google Chrome as a brand new version of the browser. It was a revelation in the browser space, and is now used by hundreds of millions of users worldwide. Google Maps— What is it about Google Maps that makes it so well-regarded? First of all, it's a true reflection of Google’s expertise and understanding of the world at large—not just the US. However, the genius of Google Maps goes beyond mere demographics. Rather, it is an application that allows you to connect to the world, without you having to go anywhere physically. Google also has unique understanding of user behavior and needs, a fact that is particularly evident in their development of Google Chrome, a tool that works for the entire desktop environment. That is, the application is not locked into a particular piece of hardware, such as Microsoft’s (MSFT) Internet Explorer, and is available to use with any type of computer or mobile device. This provides Google with significant leverage with large desktop and laptop computer manufacturers. CONCLUSION As the CEO of a large, privately held company, I must caution that none of this is a guarantee that you should invest your hard-earned money into Alphabet. Instead, I think it's an invitation to do the due diligence on the company and its various offerings. In particular, I recommend that investors understand the strong ties between Google and Alphabet. If there's one thing that investors can say with certainty about Google, it is that this company is built upon a foundation of deeply-embedded, mutually-beneficial relationships. As such, it should not surprise anyone that these relationships are growing and are therefore increasingly valuable to shareholders.

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