Competitive analysis of Online Revenue Market Share

Anurag Verma : 35413

Amol Surwade : 35407

Sushant Jog : 35481

Gooooogle

Facebook

IndustryGoogleGoogle SWOT AnalysisGoogle Porter Five Forces Model

FacebookFacebook SWOT AnalysisFacebook Porter Five Forces Model

Competitive AnalysisQnA 2

Agenda

Online AdvertisingRevenue Generation through Free ProductsRevenue Generation through Search Engine Marketing

Revenue Generation through Social Media

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Industry

Started in January 1996 by Larry Page and Sergey Brin – Stanford University Ph.D. Students

Domain name registered on September 15, 1997, and the company was incorporated on September 4, 1998.

The company's mission statement

"to organize the world's information and make it universally accessible and useful“

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About Google

Name Microsoft Corporation

Geographic Areas Covered WorldWide

Headquarter U.S.

Current CEO Satya Nadella

Employees 99,000

Major Competitors Google, Apple, IBM, Oracle, Adobe etc

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About Google

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About Google

What does Google do to sustain

SWOT Analysis

Strengths weaknesses

Opportunities Threats

Free products in multiple categories

Web Web Searching, Google Chrome, Toolbar

Mobile Mobile, Maps for Mobile, Search for Mobile

Media YouTube, Picasa, Image Search, Books, News

Home & Office Gmail, Docs, Calendar, Google Drive, Translate, Calendar

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SWOT Analysis : STRENGTHS

Free products in multiple categories Social

Hangout, Google+, Blogger

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SWOT Analysis : STRENGTHS

Access to largest group of internet users worldwide Access to 79% of worlds desktop market users Access to 89% of the world mobile search market users. Increased share in Mobile search

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SWOT Analysis : STRENGTHS

Quality and Customer experience are the primary objects

Strong patent portfolio File more than 1200 patents in 2013 Rank 21st worldwide

Innovation 2nd most innovative company in the world (As per BCG)

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SWOT Analysis : STRENGTHS

Product Integration Products can be used on any OS or any device Well defined Ecosystem

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SWOT Analysis : STRENGTHS

Captialize on Open Source Work / Applications

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SWOT Analysis : STRENGTHS

Increased dominance in Android Market

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SWOT Analysis : STRENGTHS

Financial position

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SWOT Analysis : Strengths

Market Cap 403 billion

Share Price $ 1199 (Approx)

Cash, Cash Equivalent and Marketable securities

$ 56.62 billion

Relies on one source of income More than 90% of revenue from Online Advertising

Market for personal computers is growing slowly. Desktop search engine market will be impacted

Unprofitable Products Patent Litigations

Costly and time consuming. Distract the company from innovating

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SWOT Analysis : WEAKNESSES

Growing no. of mobile internet users More than 90% of revenue from Online Advertising

Patents through Acquisitions. Got 17000 patents from Motorola.

Driverless electronic cars Technology can be a huge hit in future and it can sell licenses to

car manufactures Extremely Fast Internet

Targeting high speed internet speed of 1Gbps in US citities

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SWOT Analysis : OPPORTUNITIES

Growing no. of mobile internet users Less space to place adds Add costs less than usual

AntiTrust Laws Accused by EU for its dominating position in search engine.

Competition from MS, FB, Twitter, Yahoo Windows 8 for Mobile Search engines from Yahoo, MS Add sharing

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SWOT Analysis : THREATS

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Five Forces Model

Competitive

Rivalry with in

Industry

Bargaining Power of Suppliers

Bargaining Power of

Buyers

Threat of New

EntrantsThreat of Substitute

Product

Michael Porter’s Five Forces Model

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Five Forces Model

Michael Porter’s Five Forces Model

Supplier’s Power

•Google is not a globally dominant•Competition Elimination & Substitution – Microsoft•Google Products may not perform well with new software release frm Microsoft & Apple

Barriers to Entry

•Yahoo & Microsoft have radically improved their search engines•Online Marketing governing rules are still evolving which may affect Google’s Strategy

Competitive Rivalry

•Rules /Ethics have not been defined so the environment is easily exploited or manipulated•Currently there are multiple rivals (Microsoft, Yahoo, facebook etc.) so the degree of rivalry is more oriented to an oligarchy•Brand identity – Google has made the language as a noun and a verb

Threat of Substitutes

•High. Switching costs are negligible•Technology requires extremely skilled staff – high degree of competition for a limited pool.•Loss of company/trade secrets if skilled staff more from one search generating organisation to another.

Buyer Power

•Users of the search tool are becoming more sophisticated and demanding other services also for free.

•Substitutes are available – and for the same price: free

•Two client groups – web community wanting to search/locate items and the organisations selling products – have to satisfy both client groups equally.

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Facebook is a social networking website Facebook® was founded in 2004 by Harvard student

Mark E. Zuckerberg with help from his roommates Dustin Moskovitz and Chris Hughes.

Facebook® was originally developed for Harvard students then expanded to other colleges then to anyone over the age of 18, and now currently to anyone 13 years of age or older.

Company Overview:

“Facebook's mission is to give people the power to share and make the world more open and connected.” 25

About Facebook

Facebook’s initial public offering (IPO) less effective than anticipated

Profit earned through B2B advertising services

Businesses benefit through the use of analytical software built into pages

Independently developed applications ensure constant consumer interaction with site

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About Facebook

Name Facebook Inc

Industries Served Internet

Geographic Areas Covered WorldWide

Headquarter U.S.

Current CEO Mark Zuckerberg

Employees 6337

Major Competitors Google, LinkedIn, Yahoo, Twitter

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About Facebook

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About Facebook

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About Facebook

In January 2013, the countries with the most Facebook users were: United States with 168.8 million

members Brazil with 64.6 million members India with 62.6 million members Indonesia with 51.4 million members Mexico with 40.2 million members

SWOT Analysis

Strengths weaknesses

Opportunities Threats

Nearly 1200 million active

users

Relevant and unique services, which surpass competitors like

Google+ and MySpace

SWOT Analysis :

STRENGTHS

SWOT Analysis :

STRENGTHS

Date Users (Millions) Growth

August 26, 2008 100 178.38

…… …….. …….

May 30, 2011 700 3.45%

September 22, 2011

800 3.73%

April 24, 2012 900 1.74%

September 14, 2012

1000 2.33%

March 31, 2013 1110 1.5%

Dec 31st, 2013 1230 0.97%

Total Activ

e

users

SWOT Analysis :

STRENGTHS

Financial position

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SWOT Analysis : STRENGTHS

Market Cap 170.76 billion

Share Price $ 67 (Approx)

SWOT Analysis :

WEAKNESSSES

- Weak CTR of advertisements

- Lack some features such as video chat, dislike button, group chats etc

- Lack of website customization

- Lacks proven effectiveness in advertising in PC version  

- Constantly drawn into litigation due to patent and privacy violations 

- Fails to take advantage of mobile version to draw revenue

Mobile Ads

Retail Platfor

m

Internal Payment System

SWOT Analysis :

OPPORTUNITIES

SWOT Analysis :

OPPORTUNITIES

• Mobile advertising

o Based on current analytic software on PC versions

o Larger return for advertisers

o Greater investor strength for Facebook

SWOT Analysis :

OPPORTUNITIES

• Retail service integration with social analytics

o Current analytics can contribute to consumer purchases

o Large consumer base will lead to stronger feedback on products

Google’s growing social network application

Privacy concerns may drive away current consumers

As market saturation draws closer, expansion will slow

SWOT Analysis : THREATS

SWOT Analysis : THREATS

Facebook blocked in China, Iran, Pakistan, Syria, Uzbekistan in 2007, 2008, 2009

Weak business model

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Five Forces Model

Competitive

Rivalry with in

Industry

Bargaining Power of Suppliers

Bargaining Power of

Buyers

Threat of New

EntrantsThreat of Substitute

Product

Michael Porter’s Five Forces Model

Five Forces Model

Threats of new entrantsVery LowGoogle+ is the only competitor

Five Forces Model

Threat of substitutesModerate. Recently acquired WhatsappNot much threat from SkypeAdvertising

Five Forces Model

Bargaining power of CustomersSignificant Power (Since Google may have

same customers)

Five Forces Model

Bargaining power of SuppliersSignificant Power (Since Users are also its

suppliers)Influence of Telcos

Five Forces Model

Intensity of Competitive RivalryVery LowNot major players who has that much of

strong presenceG+ has 1/10th Monthly Active Users only

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Analysis

No. of Users Capabilities Strategy

Facebook More than 1billion monthlyactive users

With more than1 billion users indatabase, userscan connect inbetter ways.

Facebook markets themas a platform that allowsusers to connect.

Google+ An estimated343 millionmonthly activeusers.

G+ integratesyoutube andandroid to gaincompetitiveadvantage overFacebook.

G+ markets them as anextension to otherservices(gmail,search,videosharing youtube ,photosharing - picasa) itprovides.

Facebook Revenue

$3,000

$2,500

$2,000

$1,500

Facebook Advertising Facebook Other Revenue

$241

$218

$214

$256 $213

$1,000

$500

$0

$188

$943

Q4 2011

$186

$872

Q1 2012

$176 $192

$992 $1,086

Q2 2012 Q3 2012

$1,599

$1,329 $1,245

Q4 2012 Q1 2013 Q2 2013

$2,344

$1,798

Q3 2013 Q4 2013

Google Revenue

$18,000

$16,000

$14,000

$12,000

Google Advertising

$666

Google Other Revenue

$1,647

$1,230 $829 $1,049 $1,046

$10,000

$8,000

$6,000

$4,000

$2,000

$0

$410 $420

$10,174 $10,225

Q4 2011 Q1 2012

$439

$10,525 $10,860

Q2 2012 Q3 2012

$12,076 $11,902

Q4 2012 Q1 2013

$14,073

$12,061 $12,542

Q2 2013 Q3 2013 Q4 2013

Facebook v Google - Raw Numbers Facebook Google

$18,000

$15,720 $16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0

$10,584 $10,645

$1,131 $1,058

Q4 2011 Q1 2012

$12,905

$11,526 $10,964

$1,585 $1,184 $1,262

Q2 2012 Q3 2012 Q4 2012

$12,951

$1,458

Q1 2013

$13,772 $13,107

$2,585 $1,813 $2,016

Q2 2013 Q3 2013 Q4 2013

Quarter By Quarter Change 35%

Facebook Google30%

25%

20%

15%

10%

5%

0%

-5%

-10%

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

Q4 2011 - Q4 2013 Change

Facebook Google

129% 49%

Advertising Other

Revenue Advertising

Other Revenue

149% 28% 38% 302%

Revenue Post-IPO

Facebook Advertising Facebook Other Google Advertising Google Other $3,000

$2,500

$2,000

$1,500

$1,000

$500

$0

Q1 Q2 Q3 Q4 Q5 Q6

Quarters since respective IPOs

Advertising Revenue

Methods

PPC (pay per click)-

When any one visit your website and make any click on Advertisement, website owner (You) get Rs 10, 12, 15… per click

  PPL (pay per Lead)-

When any one visit your website and make a click and signup in any Advertisement, You get Rs 20, 30, 40… per click

  PPA (pay per Action)-

When any one visit your website and Does any shopping from the Advertisement, You get X% commission on that shopping

PPI (pay per Impression)-

Some Advertisers want their Brand logo should be seen by visitors on your website, Still they will Pay Rs 10 for 100 visitors, Rs 50 for 500 visitors

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