GOOGLE FIBERHOOD THE NEXT STEP

Introduction
Google started as a search engine in 1998 by Stanford students Larry Page & Sergey Brin while pursuing their PhDs. Google quickly rose to dominance with their PageRank algorithm and became the leaders in the Internet search technology. Google also has a reputation of being a forerunner in Internet innovations, and has furthered the idea of free software. Google’s business model is based on Targeted Advertising, which is 90% source of it’s revenue. Recently Google ventured into providing high­speed Internet (1 Gbps) to home users through fiber optics under their newly launched Google Fiber Project. The current paper would be analysing Google’s future strategy towards capturing new users & keeping it’s current user­base intact under its Ecosystem.

Definitions
Business Model is a set assumptions and theories that managers make about how company would create value for all the players involved with the company. It’s a story that tells how a company works, with all players as characters of the story, and plot revolves around making money. On the other hand, Strategy is the action­steps that a company takes to keep­up with the competition by doing better, efficiently, and cheaply; which directly implies being different. Business model and strategy are key to the success for an enterprise, and they go hand in hand. Ken Olsen, one of the founders of Digital Equipment Corporations (2nd only to IBM) didn’t find opportunity in Personal Computer (PC) market, and didn’t invest their resources in PC market, which led to the failure of the company. Amazon with it’s low­margin high­volume model survived the 1998 Internet bubble­burst, and is now the biggest player in online retail business.

Analysis
Google started as a search engine, and quickly became the leader of Internet search. It literally created a new market of search engine which was never imagined by Internet forerunners of the times. Targeted Ads was Google’s business model, which shows ads that are displayed when a user searches the Internet for some information. For 2014 Q21 , 90% $15.96 billion came from ad revenues, and $1.60 billion or 10% of total revenues came from “Other Revenues”, which is 53% increase from 2013 Q2. Ad revenues are still the biggest contributor to it’s revenues, but Google is maturing and to remain competitive has been bringing innovations and catching­up with current technology trends. In Google’s business model, the main assets are it’s user­base through which it generates 90% of the revenues by selling advertisements. To keep them trapped inside it’s Ecosystem and remain a key player of the Internet market is Google’s main strategy. Google has been launching new products like Android, Chromebook, Chrome Browser, etc. to keep the user­base (trapped) inside the Ecosystem. Google Fiber 2 is another step in it’s strategy to remain one­step ahead of the competition, and create value for the stakeholders. By providing high­speed Internet at 1Gbps Google aims at linking directly to it’s user­base which will help them to get more insight on how user uses the high­speed Internet, and this would generate revenues through subscription­generating business. Currently Google is launching Fiber only in select cities. A survey in one of these cities (Kansas City, Kansas) by Bernstein Research found Google Fiber is capturing 75% of homes in medium­to­high income neighborhoods, and 30% homes

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"Google Inc. Announces Second Quarter 2014 Results and ..." 2014. 11 Oct. 2014 2 "Google Fiber." 2012. 11 Oct. 2014

in low­income neighborhoods, which is quite a number, and shows that people are accepting Fiber. It is also estimated that Google has plans to have Gigabit Internet in 8 million homes by 20223 .

Conclusion
Google has up until now upgraded it’s strategy to beat the competition faced from other software giants like Apple and Microsoft by being innovative and bring best technology to the market. The strategy of providing Gigabit Internet through Fiber Optics is just an example of how Google foresees future market and keeps itself abreast with it’s competitors. The introduction of Google Fibers would not only help create value for the company, but also force it’s competitors to bring innovations, and help improve the existing technology so that the end users enjoys best services.

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"Google Fiber Could Reach 8 Million Homes By 2022 ­ Forbes." 2013. 11 Oct. 2014