The Diversification of Google Inc.

Subject: Case Studies
Pages: 2
Words: 550
Reading time:
2 min
Study level: College

Google Inc.’s powerful diversification

In terms of diversification, Google is among the most powerful corporations. This U.S.-based multinational technology business has undoubtedly been a driver of the digital information era. Branding helps it achieve its goal of diversifying its services. Through its many Internet-related and technology-related services and products, it has launched significant innovations that have revolutionized how consumers use the web by facilitating the simple transmission of information and the production of content. For example, the company gives customers a more efficient way to acquire expertise and information worldwide. According to the Google Inc. Report (2009), Google Inc.’s productivity is based on products such as Gmail and Google Drive, Google Search Appliance, AdWords, AdSense, and other web services such as Google News, Google Scholar, and Google Earth, among others.

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The firm has acquired profit and recognition due to its new merchandise and service options. For example, YouTube, Chrome, and Android all feature various Internet-related products and services that have allowed Google to encircle and, to some extent, capture diverse Internet users. For instance, YouTube, the world’s largest video-sharing platform, enables customers to view, comment, and interact with others while keeping the media accessible and valuable through its Ads. Another successful growth is Chrome, the most trustworthy and dependable search engine. According to a Google Inc. Report (2009), Chrome facilitates the transition of computing from the desktop to the cloud. On the other hand, Android permits a partnership with Google on their mobile phones to improve their applications and services, generating advertising revenue for Google.

The development of higher profit

The development of higher profit by integrating two corporate divisions into one is referred to as synergy. Google’s diversity is producing synergy because their present products are interrelated. This enables users to accomplish simple tasks from a single location at the same time. For example, YouTube provides video ad solutions to marketers, allowing them to distribute their content to the YouTube audience (Google Inc. Report, 2009). As a result, an Android phone user may publish or watch YouTube videos, as well as save such films to Google Drive or email. Consequently, YouTube, Chrome, and Android, in my opinion, should be characterized as having a moderate to a high level of diversity based on the product’s initial goal.

Value reduction

Diversification can reduce value if management’s primary purpose is to grow the firm to earn high remuneration. Product differentiation is less efficient when it reduces revenue rather than adds value. For example, in 2006, Google purchased YouTube, a video-sharing service, for around $1.8 billion in stock (Google Inc. Report, 2009). Nearly 40% of all videos viewed online are available for free on this website (Google Inc. Report, 2009). As a result, generosity comes with a price, with some of its videos lacking advertisements, limiting earnings generation (Google Inc. Report, 2009). Furthermore, according to Credit Suisse, YouTube was anticipated to run from $500 million to $1 billion in 2006, with an income in the area of $240 million (Google Inc. Report, 2009). Therefore, with the addition of stronger portfolio content, Google’s economics seemed untenable. Another way diversity may lower value is through a product’s lack of relevance. When a product or service is not developed to stay up with trends to generate new revenue, it might lose customer attention in the marketplace.

Reference

Google Inc. Report. (2009). Case 21 Google Inc.: Running amuck?