In their blog posting Google engineers explain: Google downloads the web continuously, collecting updated page information and re- processing the entire web-link graph several times per day. This graph of one trillion URLs is similar to a map made up of one trillion intersections. So multiple times every day, we do the computational equivalent of fully exploring every intersection of every road in the United States. Except it’d be a map about 50,000 times as big as the US, with 50,000 times as many roads and intersections. Google no longer publishes the number of pages indexed on its home page, perhaps due to accusations that it is ‘evil big brother’; however, it is generally reckoned to exceed 10 billion.

115Chapter 3 E-business infrastructure Context In addition to being the largest search engine on planet Earth, mediating the searches of tens of billions of searches daily, Google is an innovator. All online marketers should follow Google to see the latest approaches it is trialling. Google’s Mission Google’s mission is encapsulated in the statement ‘to organize the world’s information ... and make it univer- sally accessible and useful’. Google explains that it believes that the most effective, and ultimately the most profitable, way to accomplish its mission is to put the needs of its users first. Offering a high-quality user experience has led to strong word-of-mouth promotion and strong traffic growth.

Putting users first is reflected in three key commit- ments illustrated in the Google SEC filing: 1 We will do our best to provide the most relevant and useful search results possible, independent of financial incentives. Our search results will be objective and we will not accept payment for inclu- sion or ranking in them. 2 We will do our best to provide the most relevant and useful advertising. Advertisements should not be an annoying interruption. If any element on a search result page is influenced by payment to us, we will make it clear to our users.

3 We will never stop working to improve our user experience, our search technology and other important areas of information organization. The range of Google services is well known: Google Web Search Movie, Music and Weather Information News, Finance, Maps, Image, Book and Groups Information Google Image Search Google Book Search Google Scholar Google Base. Lets content owners submit content that they want to share on Google web sites. Google Webmaster Tools. Provides information to webmasters to help them enhance their understanding of how their web sites interact with the Google search engine.

Content owners can submit sitemaps and geotargeting information through Google Webmaster Tools to improve search quality. Google Co-op and Custom Search. Tailored version of the search engine. Google Video and YouTube Google Docs. Edit documents, spreadsheets, and presentations from anywhere using a browser.

Google Calendar Gmail Google Reader. Google Reader is a free service that lets users subscribe to feeds and receive updates from multiple web sites in a single interface. Google Reader also allows users to share content with others, and function with many types of media and reading-styles. Orkut – a social network Blogger. Blogger is a web-based publishing tool that lets web users publish blogs.

Google Desktop. Search own local content. Picasa. Picasa is a free service that allows users to view, manage and share their photos. Google GEO – Google Maps, Earth and Local Google Checkout provides a single login for buying online.

On 1 February 2008, Google began charging merchants who use Google Checkout 2% of the transaction amount plus

In Their Blog Posting Google Engineers Explaingoogle Downloads The We

In their blog posting Google engineers explain: Google downloads the web continuously, collecting updated page information and re- processing the entire web-link graph several times per day. This graph of one trillion URLs is similar to a map made up of one trillion intersections. So multiple times every day, we do the computational equivalent of fully exploring every intersection of every road in the United States. Except it’d be a map about 50,000 times as big as the US, with 50,000 times as many roads and intersections. Google no longer publishes the number of pages indexed on its home page, perhaps due to accusations that it is ‘evil big brother’; however, it is generally reckoned to exceed 10 billion.

115Chapter 3 E-business infrastructure Context In addition to being the largest search engine on planet Earth, mediating the searches of tens of billions of searches daily, Google is an innovator. All online marketers should follow Google to see the latest approaches it is trialling. Google’s Mission Google’s mission is encapsulated in the statement ‘to organize the world’s information ... and make it univer- sally accessible and useful’. Google explains that it believes that the most effective, and ultimately the most profitable, way to accomplish its mission is to put the needs of its users first. Offering a high-quality user experience has led to strong word-of-mouth promotion and strong traffic growth.

Putting users first is reflected in three key commit- ments illustrated in the Google SEC filing: 1 We will do our best to provide the most relevant and useful search results possible, independent of financial incentives. Our search results will be objective and we will not accept payment for inclu- sion or ranking in them. 2 We will do our best to provide the most relevant and useful advertising. Advertisements should not be an annoying interruption. If any element on a search result page is influenced by payment to us, we will make it clear to our users.

3 We will never stop working to improve our user experience, our search technology and other important areas of information organization. The range of Google services is well known: Google Web Search Movie, Music and Weather Information News, Finance, Maps, Image, Book and Groups Information Google Image Search Google Book Search Google Scholar Google Base. Lets content owners submit content that they want to share on Google web sites. Google Webmaster Tools. Provides information to webmasters to help them enhance their understanding of how their web sites interact with the Google search engine.

Content owners can submit sitemaps and geotargeting information through Google Webmaster Tools to improve search quality. Google Co-op and Custom Search. Tailored version of the search engine. Google Video and YouTube Google Docs. Edit documents, spreadsheets, and presentations from anywhere using a browser.

Google Calendar Gmail Google Reader. Google Reader is a free service that lets users subscribe to feeds and receive updates from multiple web sites in a single interface. Google Reader also allows users to share content with others, and function with many types of media and reading-styles. Orkut – a social network Blogger. Blogger is a web-based publishing tool that lets web users publish blogs.

Google Desktop. Search own local content. Picasa. Picasa is a free service that allows users to view, manage and share their photos. Google GEO – Google Maps, Earth and Local Google Checkout provides a single login for buying online.

On 1 February 2008, Google began charging merchants who use Google Checkout 2% of the transaction amount plus $0.20 per transaction to the extent these fees exceed 10 times the amount they spend on AdWords advertising. Google Mobile, Maps, Mobile, Blogger and Gmail are all available on mobile devices. Case Study 3.1 Innovation at Google M03_CHAF9601_04_SE_C03.QXD:D01_CHAF7409_04_SE_C01.QXD 16/4/09 11:09 Page 115 Intranets and extranets InChapter 1, illustrated byFigure 1.4, we introduced the concept of intranets and extranets. For 2007, Google spent around 12.8% of its revenue in research and development, an increase from less than 10% in 2005. Google revenue models Google generated approximately 99% of its revenues in 2007 from its advertisers with the remainder from its enterprise search products where companies can install search technology through products such as the Google Appliance and Google Mini.

Google AdWords, the auction-based advertising programme that enables advertisers is the main source of revenue. Advertisers pay on a ‘pay-per-click’ cost basis within the search engines and within other services such as Gmail, but with cost-per-thousand payment options available on Google Networks members’ web sites. Google has introduced classified style ad programmes for other media, including: Google Audio Ads (ads are placed in radio programmes) Google Print Ads Google TV Ads Google Video Ads, user-initiated click-to-play video ads. So, Google’s revenues are critically dependent on how many searches it achieves in different countries and the proportion of searchers who interact with Google’s ads.

Research by Comscore (2008) suggests around 25% of searches result in an ad click where sponsored search results are included (around 50% of searches). Of course Google is also looking to increase the number of advertisers and invests heavily in this through trade communications to marketers. Increased competition to advertise against a search term will result in increased bid amounts and so increased revenue for Google. International revenues accounted for approximately 48% of total revenues in 2007, and more than half of user traffic came from outside the US. In 2007, 15% of ad revenue was from the UK alone.

35% of Google’s revenue is from the Network of content partners who subscribe to the Google Adsense programme. From the inception of the Google Network in 2002 through the first quarter of 2004, the growth in advertising revenues from our Google Network members’ web sites exceeded that from Google’s own web sites, which had a negative impact on its operating margins. Risk factors Some of the main risk factors that Google declares include: 1 New technologies could block Google ads. Ad- blocking technology could, in the future, adversely affect Google’s results, although there has not been widespread adoption of these ad blocking approaches. 2 Litigation and confidence loss through click fraud.

Click fraud can be a problem when competi- tors click on a link, but this is typically small-scale. A larger problem for Google to manage is structured click fraud where site owners on the Google content network seeks to make additional advertising feeds. 3 Index spammers could harm the integrity of Google’s web search results. This could damage Google’s reputation and cause its users to be dissat- isfied with our products and services. Google says: ‘There is an ongoing and increasing effort by “index spammers†to develop ways to manipulate our web search results.

For example, because our web search technology ranks a web page’s relevance based in part on the importance of the web sites that link to it, people have attempted to link a group of web sites together to manipulate web search results.’ At 31 December 2007, Google had 16,805 employees, consisting of 5,788 in research and development, 6,647 in sales and marketing, 2,844 in general and administra- tive and 1,526 in operations. All of Google’s employees are also equityholders, with significant collective employee ownership. As a result, many employees are highly motivated to make the company more successful. Google’s engineers are encouraged to spend up to 10% of their time identifying new approaches.

Further reading: Bala and Davenport (2008) You can find updates on this case study by searching at DaveChaffey.com for ‘Google Marketing updates’. Question Explain how Google generates revenue and iden- tify future levels of revenue given some of the risk factors are for future revenue generation. 116 Part 1 Introduction M03_CHAF9601_04_SE_C03.QXD:D01_CHAF7409_04_SE_C01.QXD 16/4/09 11:09 Page 116 Here are the figures needed to compare: 235Chapter 4 E-environment 4 Highly-localized web sites.Country-specificwebsiteswith language translation; theyalso include other localization efforts in terms of time, date, postcode, currency formats, etc. Dell ( provides highly localized web sites. 5 Culturally customized web sites.Web sites reflecting complete ‘immersion’ in the culture of target customer segments; as such, targeting a particular country may mean providing multiple web sites for that country depending on the dominant cultures present.

Durex ( is a good example of a culturally customized web site. Deciding on the degree of localization is a difficult challenge for managers since while it has been established that local preferences are significant, it is often difficult to balance localiza- tion costs against the likely increase or conversion rate through localization. In a survey published in Multilingual (2008), the importance of localization was seen as important with 88% of managers at multi-national companies stating that localization is a key issue, with 76% of them saying that it is important specifically for international customer satisfaction. Yet, over half of these respondents also admitted that they allocate only between 1% and 5% of their overall budget for localization.

An indication of the importance of localization in different cultures has been completed by Nitish et al. (2006) for the German, Indian and Chinese cultures, assessing localized web sites in terms not only of content, but cultural values such as collectivism, individual- ism, uncertainty avoidance and masculinity. The survey suggests that without cultural adaptation, confidence or flow falls, so resulting in lower purchase intent. A further aspect of localization to be considered is search engine optimization (SEO, see Chapter 9) since sites which have local language versions will be listed more prominently within the search engine results pages for local versions of the search engines. Many special- ist companies have been created to help manage these content localization issues for companies, for example agency Web Certain maintains a forum advising on localization ( One example of the effect of localization on conversion rates is provided by MySpace CEO Mike Katz who stated in NMA (2008) that: ‘All the 27 sites are localised, we don’t believe that one size fits all’, says Katz. ‘We know that from the first day we localise in any language, we triple our sign-ups on original users.’ In 2008, 45 million of the 130 million MySpace users were outside the US; new sites were planned for Russia, India, Poland and Korea, each requiring a local version of the MySpace model.

To explore the implications of globalization for consumer-oriented companies, refer to Case Study4.1. The article starts by discussing anti-globalization. It then explores the implications of variations in the characteris- tics of different cultures on businesses providing services to them. At the end of the article, research about attitudes to globalization is summarized, along with its implications for businesses trading internationally. Globalisation, or maybe more specifically, anti-global- isation issues, are never far from the headlines, whether it’s coverage of the latest anti-WTO demonstration or news that McDonalds has replaced Ronald McDonald in France with Asterix – in a move to ‘appease anti-globalisation protesters’ (BBC News, 22 January 2002).

But what does globalisation actually mean? Stemming from the application of free market principles it has manifested the belief that the world is small and that consumers are becoming more and more alike, thus allowing companies to use the same advertising and marketing across regions and countries. Such a doctrine has enabled companies to act global and think global, much to the distaste of the anti-globalisation lobbies. Indeed, in 1985 it was Friends of the Earth that coined the slogan ‘think global, act local’ in its desire to counter such global forces – particularly with regards to environmental issues. However, such ‘glocalisation’ [global localisation] makes a lot of sense for multinational companies oper- ating today and planning new market entry, for a number of reasons.

Firstly, the term globalisation for CaseStudy4.1 The implications of globalization for consumer attitudes M04_CHAF9601_04_SE_C04.QXD:D01_CHAF7409_04_SE_C01.QXD 16/4/09 11:11 Page 235 The implications of e-commerce for international B2B trading Hamill and Gregory (1997) highlight the strategic implications of e-commerce for international business-to-business trading. They note that there will be increasing standardization of prices across borders as businesses become more aware of price differentials. Secondly, they predict that the importance of traditional intermediaries such as agents and distributors will be reduced by Internet-enableddirectmarketingandsales. many Europeans is virtually synonymous with that of ‘Americanisation’.

For some this has negative conno- tations of materialism, loss of native culture and the encroachment of the English language. At its extreme, it drives many of the anti-globalisation activists. Thus there is real risk that companies will damage their brand and reputation if they don’t recognise the importance of localisation when considering market entry. Secondly, consumers are as different as they are similar – local and regional cultures have a profound effect in shaping consumer demand. These differences are potentially more interesting than the similarities, in that they can allow product and service differentiation as well as new approaches to segmentation and marketing communications.

To take advantage of such opportunities, businesses have to have a clear insight into how and why consumers in one market may differ from ones in another. Feelings of anti-Americanisation are a strong under- current in Europe. Businesses have to plan how to counter such a groundswell of feeling if planning on entering new markets – given that some 50% of Europeans believe that ‘our society is too Americanised’ and such an attitude has increased over the past 10 years. While the degree of agreement varies within Europe (e.g. 67% of Spaniards agreeing with the state- ment, as compared with 44% of Brits) it is a significant influence of customer behaviour.

To compound matters, multinational companies are the least trusted of 27 en- tities when European consumers have been asked to state which they trust to be honest and fair. As a result, not only have we seen an increase in consumer activism (such as anti-WTO protests, growth of the slow food movement in Europe etc.), but also we have seen global brands coming under threat from emer- gent local brands which are gaining in currency. We would expect this to continue. This is not to say that there is no room for global brands! Many global brands have successfully tapped into local culture and tastes and recognised the need to either modify the product/service completely or change different elements of the offer and how it is ultimately marketed.

Thus companies expanding into new geographic markets have to ensure that their strategies are based on a real understanding of regional and local markets. Globalisation is not making the world a smaller, homogeneous place. While this presents many oppor- tunities for businesses, it also implies a need for a clear understanding of what shapes consumer needs and desires in the different nations. Not surprising perhaps that many businesses found the notion of a ‘globalised’ world compelling given the significant implications for researching a multitude of different markets in terms of time and money budgets. Similarly, it is easy to under- stand the temptation of taking well-established national stereotypes and assuming that they are representative of the truth.

Recent attitudinal studies in Europe and the US undertaken by The Henley Centre show the complexity of attempting to categorise consumers on a broad scale. Let’s take an example. At one level, results show that all consumers take pride in their family, so a global advertising campaign using the ‘family’ as a theme may feel like safe territory. To some extent it is. Dig down a bit deeper, however, and you find that different people define ‘family’ in very different ways, so what people take pride in will be subtly different.

At a country level, many more differences expose themselves. Businesses wanting to broaden their geographic reach have to consider at a strategic level what level of understanding of consumer needs they require. Generalisations are important and are a good place to start, but it is critical to then delve further – national stereotypes are too simplistic. Differences, rather than similarities, have to be considered, and interrogated in terms of how these will impact customer needs. Source: The Henley Centre ( Question Based on this article and your experiences, debate the question: ‘Site localization is essential for each country for an e-commerce offering to be success- ful in that country.’ 236 Part 1 Introduction M04_CHAF9601_04_SE_C04.QXD:D01_CHAF7409_04_SE_C01.QXD 16/4/09 11:11 Page 236