Google Network Effect Analysis

1105 Words 4 Pages
Q1 Network Effects
Google the largest internet search company, who took the major market share in the U.S. and numerous countries. People start to use Google as a verb rather than a company name, which indicates its leading position in the industry. When Google search becomes widely popular, it can generate more value from the popularity. As The Innovator 's Toolkit stated, “a phenomenon in which the value of a product increase as more products are sold and the network of users increases” is called the network effect.

Internet search is a network effect service. When more people use internet search, the search engine could provide more relevant results by collecting more data, which gets more traffic from users. More traffic also means
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Same as Google, some internet companies in social media and e-commerce are growing incredibly fast and taking the market shares, such as Facebook, Twitter, Amazon, eBay and Alibaba. These companies changed the market structure that internet search cannot be a winner-take-all business in the near future. With over 95% of revenue from online advertising, pursue alternative revenue streams becomes very important for Google in long-term.

From Google Glass to Google self-driving cars and Google Loon, the radical innovations in Google is increasingly unpredictable. Google is working on solving the global problems with innovative technology. If one of these projects got achieved and implemented successfully, it could be an evolutionary product to bring the alternative revenue streams to Google. The self-driving car should be one of the possibilities of alternative revenue streams. In many countries the vehicle market is huge, same as the market demand for convenience and safe drive.Google caught this pain point of inconvenience and unsafety driving and developed the product with new technology. They can entry the market through product differentiation and change the history of a human driving car, which could bring incredible revenue stream from
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A super application integrated all the functions and services to make life more convenience and enjoyable could be another alternative revenue. There are thousands of applications in Apple or Android App Store which can involve in every detail of lives, but each application can only solve one problem. Weather app only tell the temperature; Yelp helps to find restaurants; WhatsApp can be used to chat with friends. How about one application knows what people need and provide all services? For example, this super app reminder me the weather at 7:40 am before I get out home to work. It turns on my computer and email box at 7:55 am and memo the 10 am meeting. It can get GPS ready before a road trip and turn on the light before my door when I am half mile away from home. Again, Google has the resource and technology. Convenience and enjoyable life is the trend for our society, which is the market demand. If they can build the super app, it could be another revenue

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