Aspen Drude

J00389593

March 30, 2014

Scott Cohen

Management 300-801

Google is a company that is not only a search engine, but has the world’s largest

computing system in the world. They have employed close to 54,000 people according

to the Google SWOT analysis from 2013. Google has a great working environment for

their employees, and creates this environment so that they will remain the world’s

largest search engine. Currently, Google’s strengths are: search engine dominance,

Android’s success is a growth driver in the mobile market, and increasing cash from

operations. Their weaknesses: weaker strategy in social media advertising space.

Their opportunities: poised to benefit from the growing smartphone and tablet market,

display advertisement and mobile ad spend will be strong drivers, positive outlook for

global online video market. And last but not least, their threats: European Commission

antitrust investigations, PRISM electronic surveillance program, and intense

competition (Appendix E). There are most certainly things that Google could do to

better themselves, and I will explain them in this paper.

Google’s profitability has shown a continual increase since 2004. There is a slight

increase each year in profitability as it is a growing company (Appendix A). The annual

ROA for 2013 is 12.6%(Appendix B). This return on assets beats all other search

engine companies. It measures the profitability of a company, and clearly, Google is

the most profitable as it has the most “business”. Google has a lot of leverage when

talking about other search engines. Since Google has the world’s largest search

engine, they can basically get what they want or need when they want or need it.

Google’s equity is currently at .53% from the Dow Jones report. This means that they

are doing well in their stocks. Google has no liquidity because they have not liquidated

any assets(Appendix C). Google’s current ratio for firm and industry is 4.58. This

means simply that you take the current assets and divide by the current liabilities. The

chart on Macroaxis shows how Google compares to other companies. In this chart,

you can clearly see that Google is doing much better than any other

company(Appendix D). They are far above any of their competitors in the means or

current ratio for firm and industry.

I don’t believe that Google only has one issue in their company. I believe that in

order to make this company better and stronger they must work on more than one

thing, however, there is one thing in particular that stood out among the rest as a large

problem. In Google, the employees get one day to do research on something that they

believe could help the company. They get to come up with ideas that they test and do

research on to see if it could help the company. Well, many years ago, three men

came up with what they and Google thought was a great idea. However, since Google

had no intellectual property rights, the men decided to keep the idea for themselves

and start a company of their own with this idea. In my opinion, they got paid by Google

to do this research and come up with these ideas, therefore, Google should have some

kind of rights to saying that technically, this was their idea. The men have made over

10 million dollars based on that idea. Although that is basically nothing compared to

what Google makes on a yearly basis, it is still revenue coming into the company.

A lot of problems in Google seem to occur because the largest part of their revenue

coming in is from advertisement. 97% of money that Google receives is from

advertisements. If something happens to where advertisements become less in

demand, Google could lose quite a bit of money. By developing intellectual property

rights, Google could have so much more of an income simply from people’s ideas. I

believe that this idea would have a revolutionary impact on Google.

I recommend that when employees come to work for Google, they create some kind

of pact that states that the ideas someone comes up with while on Google time should

be Google’s property. I, however, do believe that Google should pay them some sort of

dividend. The three men that branched off to start a company with the work that they

did at Google, Google offered them a blank check. They offered to buy the men’s ideas.

They declined this offer. Based on how great the idea is, Google should be able to get

the rights for the idea by paying the person who came up with it. If you are using all of

a company’s resources for your own personal curiosity, and come up with a great idea,

based on their resources, then I believe that those should be the ownership of the

company. If an employee is at home on their own computer with their own resources,

then an entrepreneurship would be the way to go; however, by using Google’s

resources, that person is basically taking money from Google for the time that Google

paid them while they came up with a possibly revolutionary idea. I believe that this idea

could possibly help Google in the long run. If anything were to happen to

advertisement, Google would be in a world of trouble; unless they tried this approach

to employees’ ideas.

REFERENCES

• Google Inc., SWOT Analysis. (2013). Google Inc. SWOT Analysis, 1-10.

• Lashinsky, A., Burke, D., & Yen, Y. (2008). WHERE DOES GOOGLE GO NEXT?.

Fortune, 157(11), 104-110.

• Scott, V. A. (2008). Google. Westport, Conn: Greenwood Press.

• Stross, R. E. (2009). Planet Google : one company's audacious plan to organize

everthing we know / Randall Stross. New York : Free Press, 2009.

• Google Revenue Drivers : Current Status and Future Prospects. (2012). [S.l.]: Mind

Commerce.

• Girard, B. (2009). The Google Way : How One Company Is Revolutionizing

Management As We Know It. San Francisco: No Starch Press.

• Busby, M. (2004). Learn Google. Plano, Tex: Wordware Pub.

• Weiss, T. R. (2013). Google Glass Helping Paralyzed Woman Experience Life.

Eweek, 6.

• Macroaxis. (2014). Google current ratio [Data file]. Retrieved from

http://www.macroaxis.com/invest/ratio/GOOG--Current-Ratio

• NASDAQ. (2014). Google annual income statement [Data file]. Retrieved from

http://www.nasdaq.com/symbol/goog/financials?query=ratios

• Wikinvest. (2013). Google annual ROA [Data file]. Retrieved from

http://www.wikinvest.com/stock/Google_%28GOOG%29/Data/ROA

• Morningstar. (2014). Google Inc Class A [Data file]. Retrieved from

http://financials.morningstar.com/ratios/r.html?t=GOOG

Appendix

A. http://financials.morningstar.com/ratios/r.html?t=GOOG

B. http://www.wikinvest.com/stock/Google_%28GOOG%29/Data/ROA

C. http://www.nasdaq.com/symbol/goog/financials?query=ratios

D. http://www.macroaxis.com/invest/ratio/GOOG--Current-Ratio

E. http://eds.a.ebscohost.com/eds/pdfviewer/pdfviewer?sid=b71e1ec1-22de-4708-

8878-333d99fa6740%40sessionmgr4004&vid=6&hid=4108