1. At the time of the case (2017), Google’s two main core competencies were its search engine and advertising products. Cofounders Larry Page and Sergey Brin created PageRank, an algorithm that “sorted web pages by relevance” (P.2). The algorithm was then turned into a prominent search engine, Google, which was generating more than “2 trillion searches in 2016” (P.5). Moreover, Google leverages their strong industry presence towards their advertising products such as Google AdWords and AdSense. These two products allowed individuals and businesses to advertise more effectively by enabling them to bid on keywords. Google then uses its algorithm to display the winning bidder’s advertisement at the top of the page, providing great visibility to anyone searching for this keyword. These products generated $79 billion in revenue in 2016.
Yes, Google’s search engine and advertising products are still its core competencies, as Google’s search engine market share is around 90%, and Google’s advertising revenue was $237.86 billion in 2023. However, Google’s main driver of their dominance is at the hands of its artificial intelligence (AI) and machine learning (Search Engine Market Share, 2024). RankBrain helps Google by analyzing its users’ searches and processes in natural language. It does this by gathering synonymous terms and words and providing users with a more accurate search result.m For example, if I search “how to reboot my Mac,” RankBrain will analyze keywords like “reboot” and “Mac” and provide me with relevant YouTube videos or blogs that actually solve my problem, not just list a bunch of websites that just happen to have those keywords. When users pick a strategy, Google’s Smart Bidding “optimizes ad spend for conversions” (About Smart Bidding, 2024). Its goal is to generate as many leads or sales as possible on a fixed budget. Smart Bidding does this by considering the time, day, location, and behavior of the user to adjust bids accordingly. As a result, advertisements are shown to the right people at the right time, which gives bidders the best return on their investment.
2. Yes, Google still dominates over Facebook (Meta) for ad revenue, as in 2023, Google’s $237.86 billion ad revenue topped Facebook’s $131.94 billion (Facebook Ad Revenue, 2024). Google’s dominance is largely attributed to its search engine, as people regularly use Google more frequently than Facebook and Instagram. As a result, advertisers are more likely to promote on Google since that is where people go to ask questions and seek solutions.
Google offers its advertisers various ad formats, such as “search, display, shopping, video, app, discovery, performance max, and smart ads” (Types of Google Ads, 2024). This allows advertisers to showcase any type of ad they desire on the most proficient, advanced search engine ever. As a Google user, my search experience is affected by how I see my information. For example, users are much more likely to engage with a bike tire ad when watching a YouTube video on people’s bike racing. If users receive ads that are irrelevant to what they are looking for, not only will they get annoyed and close out of the tab, but the advertiser will lose money promoting an ad to someone who had zero interest to begin with. On the other hand, Meta provides a similar experience for advertisers as they can promote their pages, posts, websites, businesses, and products across Instagram and Facebook.
Personally, I do not believe the gap between Meta and Google will close, as Google’s business structure is specifically designed for people to ask questions and seek solutions. While people do use Facebook and Instagram for fashion and shopping, Google serves a greater purpose for people’s everyday duties. While Amazon is considered a tech giant and is ranked third in advertisement revenue, its purpose (similar to Meta) of being a store provider is less prevalent than Google’s purpose.
3. I believe Sundar Pichai, CEO of Google, should continue investing and expanding its AI operations. OpenAI’s ChatGPT currently owns “39% of the foundational model and platform market” (Leading Generative AI Companies, 2024). Microsoft is OpenAI’s largest investor, as they have integrated AI into its products and services. While Google currently utilizes RankBrain in its advanced searches, Google must remain competitive against its rival, Microsoft, to avoid losing market share in other areas (i.e., search). As a result, Pichai should consider acquiring startups specializing in natural language processing and machine learning, which will continue improving Google’s services, such as its search engine, Google Maps, and Google Assistant. Users will have access to more consolidated information to give them the most accurate and effective answer.
4. My overall understanding of Google was significantly enhanced after reading this briefing and conducting relevant research on Google’s operations. While I was aware of how dominant Google’s search engine was, I was unaware of how successful they are at providing many kinds of advertisement services to its users. I also learned more about RankBrain and how Google utilizes this algorithm to provide accurate results for its users.
Works Cited
“About Smart Bidding.” Google Ads Help, Google, https://support.google.com/google-ads/answer/7065882?hl=en. Accessed 26 Aug. 2024.
“Leading Generative AI Companies.” IoT Analytics, https://iot-analytics.com/leading-generative-ai-companies/. Accessed 26 Aug. 2024.
“Facebook Ad Revenue: 2024 Guide on How Facebook Makes Money from Ads.” Yaguara, https://www.yaguara.co/facebook-ad-revenue/#:~:text=Facebook%20generated%20an%20advertising%20revenue,billion%20for%20three%20years%20running. Accessed 26 Aug. 2024
“Types of Google Ads: A Complete Guide to 8 Ad Formats.” Wscube Tech, https://www.wscubetech.com/blog/types-of-google-ads/#:~:text=The%208%20types%20of%20Google,Performance%20Max%2C%20and%20Smart%20ads. Accessed 26 Aug. 2024.”Search Engine Market Share 2023-2024.” Proceed Innovative, https://www.proceedinnovative.com/blog/search-engine-market-share-2023-2024/#:~:text=The%20following%20are%20the%20worldwide,YANDEX%20%E2%80%93%201.84%25. Accessed 26 Aug. 2024.
Written by Mikael La Ferla
Mikael La Ferla 