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This paper is focused on Google Inc case, the largest American company (by market capitalization) that is not part of the Dow Jones Industrial Average . This choice is motivated by the success story of this company as well as the remarkable business model that makes it stands in front of giants like YAHOO and beat them.

This Report begins by presenting the company and its history, describing the competitive advantage of the firm and analysing it.

My analysis was mainly based on articles published in specialized websites, magazines and frameworks from the course.

The company

Google began in January 1996, as a research project by Larry Page, who was soon joined by Sergey Brin, two Ph.D. students at Stanford University, California. They hypothesized that a search engine that analyzed the relationships between websites would produce better ranking of results than existing techniques, which ranked results according to the number of times the search term appeared on a page. Their search engine was originally nicknamed "BackRub" because the system checked backlinks to estimate a site's importance.

The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design and usability. In 2000, Google began selling advertisements associated with search keywords. The ads were text-based to maintain an uncluttered page design and to maximize page loading speed. Keywords were sold based on a combination of price bid and clickthroughs, with bidding starting at US$.05 per click.

Google strategic advantage analysis

To better understand Google and its business model, one needs to break it down into three data inputs.

• Relevancy of results.

• Speed of search.

• Cost of executing a search query.

While their results aren’t optimal, they are good enough. Just like Microsoft Windows was good enough to dominate the market. Google, now has 64 percent of the total search market. And although a typical Google query can often be an act of futility, we put up with it because the results are fast. If they’re wrong, we can just start all over again.

While competitors like YAHOO invested on the content and in offering other services to customer, Google focused on the core competency: Finding query results as fast as possible. To reach this goal, Google made several investment in infrastructure and tried to stick to text based pages.

In other words, the company has to make sure that the speed of its search is really, really fast. Any random search on Google these days takes between 0.12 to 0.06 seconds. Now that is really, really fast. Google does this by indexing the Internet quite well. The magic is in delivering the search results from this index at lightening speed, and that requires an infrastructure вЂ" oodles of bandwidth and specialized hardware вЂ" that is finely tuned much like a Formula One Car.

The number of racks, fiber, routers and everything in between is mind-boggling. If this system were built using gear from established