Google is Huge. Its m-cap of $201 Billion Proves it. And it can Easily Grow Bigger by Conquering The Communications Industry, in toto, by Becoming a Telecom Operator. Question is – should it take The Chance?
It was Google’s listing day at NASDAQ. The date – August 19, 2004. Google co-founder Larry Page & CEO Eric Schmidt were nervously busy in conversation, and most around them were more than pleased to allow the elaborately laid-out breakfast (with poached eggs perched on shiny pedestals, deliciously placed canapés and flatwares full of crème fraiche, besides others) help ease their anxiousness. The time: 9:24 am. The plan – in few minutes, the Macy’s suit-clad Page would Chair the opening of the market, then drive a few blocks north to Morgan Stanley Building on 1585 Broadway and watch investors play with the Google stock. The bell gonged and for those brief moments, nothing looked more glorious than the $100-valued stock, coded “GOOG”. “Congratulations, congratulations. It’s going to be a great success,” shouted NASDAQ President Rob Greifeld. Everything for Google, seemed to go as per plan. However, 10 minutes later, a commotion broke out. Two women wearing black skirts cried out for water & napkins. Reason: Page had landed himself on a plate full of Crème fraiche! Then flew a remark from Schmidt: “These things happen. We’ve seen worse.” It was as if he was expecting such a Page-act. But even he knew that this one, was not planned.
Not everybody agrees, but Page & Sergey Brin did not have their “Google” all planned out from day 1. And this has served them well. One day it was, in early 1999, when the two co-founders’ offer to sell their brainchild for $750,000 was turned down. Today, Google is worth $201.35 billion (as on Jan 18, 2011). And from investing millions on self-driven Robot cars, to risking $5 billion in a project in late-2010, to put in place a 350-mile-long undersea line to harness wind energy along the Atlantic seaboard, of late, the company has started laying wagers on strange cards. Trouble is – most of these plans appear “over-ambitious” and too futuristic. Question is – can it therefore move away from adventure, and invest in something more “planned”?
The answer – an obvious yes. After giving to the world the most successful mobile OS in recent times – the Android (with 25.6% of global share, powering 0.25 million new devices per day; says Goldman Sachs Analyst Fred Krom to B&E, “Google’s Android climbed from powering 5% of global handsets in 2009 to a high-teens percentage in 2010, outstripping Apple’s iPhone”), and having proved that it can manufacture handsets as well (the Nexus), Google could well be on its way to disrupting dynamics in the mobile industry, thereby becoming your next wireless carrier, and even bigger than the likes of Verizon & AT&T.
Google already has a low-cost voice telephony service in place in US – the Google Voice, where users are given their own unique telephone numbers. The very successful service was launched in May 2009. It spread like wildfire. Five months later, it had 1.4 million users, with 0.57 million using it every day. Experts claim that though the base has already moved into the 10 million plus zone (as of end-2010), only a small fraction of users actually pay for it (for ISD calls to telephones). So does this make for a profitable undertaking? The fact that the profitable Skype (bottomline of +$13.1 million in H1, 2010) has only 6% of “paid users” makes Google Voice’s case strong.
Not everybody agrees, but Page & Sergey Brin did not have their “Google” all planned out from day 1. And this has served them well. One day it was, in early 1999, when the two co-founders’ offer to sell their brainchild for $750,000 was turned down. Today, Google is worth $201.35 billion (as on Jan 18, 2011). And from investing millions on self-driven Robot cars, to risking $5 billion in a project in late-2010, to put in place a 350-mile-long undersea line to harness wind energy along the Atlantic seaboard, of late, the company has started laying wagers on strange cards. Trouble is – most of these plans appear “over-ambitious” and too futuristic. Question is – can it therefore move away from adventure, and invest in something more “planned”?
The answer – an obvious yes. After giving to the world the most successful mobile OS in recent times – the Android (with 25.6% of global share, powering 0.25 million new devices per day; says Goldman Sachs Analyst Fred Krom to B&E, “Google’s Android climbed from powering 5% of global handsets in 2009 to a high-teens percentage in 2010, outstripping Apple’s iPhone”), and having proved that it can manufacture handsets as well (the Nexus), Google could well be on its way to disrupting dynamics in the mobile industry, thereby becoming your next wireless carrier, and even bigger than the likes of Verizon & AT&T.
Google already has a low-cost voice telephony service in place in US – the Google Voice, where users are given their own unique telephone numbers. The very successful service was launched in May 2009. It spread like wildfire. Five months later, it had 1.4 million users, with 0.57 million using it every day. Experts claim that though the base has already moved into the 10 million plus zone (as of end-2010), only a small fraction of users actually pay for it (for ISD calls to telephones). So does this make for a profitable undertaking? The fact that the profitable Skype (bottomline of +$13.1 million in H1, 2010) has only 6% of “paid users” makes Google Voice’s case strong.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
