The world has been Googled according to Ken Auletta author of Google: The End of The World as We Know It. Auletta writes, “We don’t search for information, we “Google” it. Type a question in the Google search box, as do more than 70 percent of all searchers worldwide, and in about half a second answers appear.”[1] Google has garnered universal appeal overcoming differences in culture, language, and geography by empowering individuals and transforming access to information. Jeff Jarvis, author of What Would Google Do? puts it best; “Once upon a time, all the roads led to Rome. Today, all roads lead from Google.” [2]

The Assignment

For those of you who don’t know, I am a graduate student at Northeastern University’s business school. I decided to take Creating Innovative Organizations for one of my summer session two classes. Throughout the semester we have researched and discussed dozens of companies and how they have innovated. During our first class our professor went around the room and assigned each of us a company to research – I was assigned Google. We were told to write a five-page paper on how, when and why our company innovated. In addition, we would have to present our findings to the class at the end of the semester.  At first, I thought that this was going to be an easy assignment. Finding information on Google has to be easy, right? Well, as it turns out – I was right. In fact, there was too much information! It became clear real fast that this was going to be a tough project. How was I going to pick and choose what to talk about in such a short paper? o overcome this dilemma I decided I would need to learn as much as I could about Google. Thus, I did what any other graduate student is likely to do when they are seeking information – I went to the library. Unfortunately, all the good books in the library were taken and the ones left on the shelves were simply too old to use. In an effort to save time (being a part-time student saving time is a big deal), I decided to purchase the books at Barnes & Noble. I also decided to buy The Innovator’s Dilemma by Harvard Business School professor Clayton M. Christensen. Many of my professors, including the one teaching my current course, references Christensen often. I figured that at some point I might be able to relate Christensen’s theories to my work.

Disruptive Technologies

According to Christensen, “Disruptive technologies bring to a market a very different value proposition than had been available previously. Generally disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheaper, simpler, smaller and frequently more convenient to use.”[3]  Dan Tynan provides some examples of disruptive technologies in his PC World article The 10 Most Disruptive Technology Combinations. Tynan explains, “Fast-forward to the late 1990s and the introduction of the TiVo and ReplayTV digital video recorders. Time-shifting programs and fast-forwarding through commercials became as easy as pressing a couple of buttons. Suddenly people were no longer shackled to the arbitrary schedules of TV programmers and the obnoxious pandering of advertisers.”Like the best disruptive tech, DVRs returned control to users–and made consumers hungry for even more control over what they watched, when, and where.

Sustaining Technologies

Most new and emerging technologies foster improved product performance according to Christensen. Christensen states, “Some sustaining technologies can be discontinuous or radical in character, while others are of an incremental nature. What all sustaining technologies have in common is that they improve the performance of established products, along the dimensions of performance that mainstream customers in major markets have historically valued.”[4] Most technological advances in a given industry are sustaining in character.

Technology Progresses Faster Than Demand

Christensen observes that technologies can progress faster than market demand, as illustrated in the figure below. This means that in their efforts to provide better products than their competitors and earn higher prices and margins, suppliers often “overshoot” their market. [5] Christensen states, “They give customers more than the need or ultimately are willing to pay for. And more importantly, it means that disruptive technologies that may underperform today, relative to what users in the market demand, may be full performance competitive in the same market tomorrow.”[6]

Christensen: The Impact of Sustaining and Disruptive Technological Change (Page xix)

How Does This Relate To My Google Paper?

After reading Christensen’s theories I knew exactly what to look for while researching Google. What did Google first bring to the market that was so different from their competitors? And, how did Google grow so fast while continually sustaining its growth in the market place? Please remember, I only had five pages (double spaced) to work with. I needed to pinpoint the exact innovations that have led Google towards being the empire it is today.

Innovation One: A Ranking System

Together, Larry Page and Sergey Brin created a ranking system rewarding links that came from sources that were important, and penalizing those that did not. Their goal was to create an algorithm – dubbed “PageRank” after Page – that took into account the number of links into a particular site, and the number of links into each of the linking sites. As they fiddled with the results returned by their work, Page and Brin realized they were onto something that might have implications for Internet search. In fact, the idea of applying Backrub’s ranked pages results to search was so natural. Page and Brin quickly realized that BackRub’s results were superior to those of traditional search engines like AltaVista and Excite, which often returned irrelevant results. Page states, “We thought, why are they returning these results that are obviously not important? They were only looking at the text and not considering this other signal. Once you have it, it’s pretty obvious that this signal is useful in search.”[7] The signal – now better known as PageRank – became the foundation of Google’s vaunted secret sauce. [8]

Innovation Two: A New Way To Monetize Search

Omid Kordestani, Google’s newly hired sales chief, was plowing the fields for enterprise deals, but they were few and far between. With more than $500,000 (and growing) in expenses going out the door each month the company needed to quickly find a sustainable business model. Instead of falling back on DoubleClick, an ad network that specialized in servicing graphical banners, Google decided to create its own unique advertising network. [9] In October 2000, Google introduced its new service called AdWords. An announcement on the main site promoted the new service: “Have a credit card and 5 minutes? Get your ad on Google today.” Despite Google’s fabled devotion to speed and economy, the promotion stayed up in some form or another throughout most of the fall, demonstrating how critical this new revenue lifeline was to the young company. [10]

Initial versions of AdWords maintained the CPM approach – advertisers still paid for impressions instead of click-throughs. But despite that, the service was a hit – revenues began flowing in, and the mood improved significantly around the burgeoning Google campus. [11] This one service alone transformed Google from a search company into a profitable media company. By mid 2001, searches per day had sky rocketed to 18 million, and the Google index surpassed 1 billion documents – making it by far the largest search engine on the Web. [12]

Innovation Three: The Google Atmosphere

Google is a company that started with an argument and progressed into some astonishing ideas. It’s a company that built its core foundation around the ability of its early employees (i.e. mainly engineers) to work together for the greater cause. Thus, it’s not surprising today to see many of these key values instilled into the new wave culture that Google has created amongst all its employees – not just the engineers. Like it’s early days Google inspires employees to work together to solve complex problems and to think of new ideas. The company has created fun and inspiring workspaces that include on-site doctors; massage and yoga; professional development opportunities; shoreline running trails; and on-site cafeterias. [13]

Google also has its famous 80/20 rule whereas employees at Google are supposed to work 80% of the time on their core job while leaving the other 20% for developing new ideas. Of course, they are encouraged to work with other employees during the time they spend brainstorming for new ideas. [14] By fostering this type of atmosphere and enticing employees to work together to create new products Google has been able to come up with some amazing products. Many of Google’s new products are placed in “Google Labs,” an area that allows users to test new prototypes and provide direct feedback to the developer(s).

Lars Rasmussen, Jens Rasmussen, and Stephanie Hannon (Employees at Google) created and launched “Google Wave” a popular online collaboration tool. The core idea for Wave, says Lars, was first thought of by Jens as a way to fix email. Email is asynchronous conversation. Instant messaging, by contrast, is synchronous. Wave is both. [15] This is just one example of the dozens of products that have been created by Google employees.

The End Results

If you are familiar with the Google story you are probably thinking that these three innovations are so obvious. Well, in business school they teach us that in order to find the right answers you first need to know the right questions to ask. Often times figuring out what the right questions are requires additional research. In this case Christensen’s studies helped me conceptualize the information I needed to gather for my research. Please share your thoughts and let me know if you think I picked the right three innovations to talk about!

Source:

1. Auletta, Ken. (2009). Googled: The End of The World As We Know It. New York: The Penguin Press (Page: 1).

2. Jarvis, Jeff. (2009). What Would Google Do? New York: Harper Business (Page: 40)

3. Christensen, Clayton. (2003). The Innovator’s Dilemma. New York: Harvard Business School Press (Page: xviii)

4. Christensen, Clayton. (2003). The Innovator’s Dilemma. New York: Harvard Business School Press (Page: xix)

5. Christensen, Clayton. (2003). The Innovator’s Dilemma. New York: Harvard Business School Press (Page: xix)

6. Christensen, Clayton. (2003). The Innovator’s Dilemma. New York: Harvard Business School Press (Page: xix)

7. Battelle, John. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York: Penguin Group (Page: 76)

8. Battelle, John. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York: Penguin Group (Page: 76)

9. Battelle, John. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York: Penguin Group (Page: 123)

10. Battelle, John. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York: Penguin Group (Page: 125)

11. Battelle, John. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York: Penguin Group (Page: 123)

12. Battelle, John. (2005). The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture. New York: Penguin Group (Page: 126)

13. Google Jobs. Top Ten Reasons to Work At Google. Vitied July 25, 2010 at http://www.google.com/intl/en/jobs/lifeatgoogle/toptenreasons/New York Times. Mediratta, Bharat.

14. The Google Way: Give Engineers Room. Visited July 25, 2010 at http://www.nytimes.com/2007/10/21/jobs/21pre.html?_r=1

15. TechCrunch. Arrington, Michael. Exclusive: Video Interview With The Google Wave Founders. Visited July 25, 2010 at http://techcrunch.com/2009/05/28/exclusive-video-interview-with-the-google-wave-founders/