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Stillman School of Business

Case Questions For Seniors

Below are the questions given to the Seniors for the assessment panels of fall 2006.  They were asked to use the  Google Inc. case as a starting point for responding to the questions below.  They were instructed to consult additional outside sources to appropriately respond to the questions.

Question 1

Google’s founders, Sergey Brin and Larry Page, have established several unique management techniques that have been controversial among shareholders and the public.  Do you view Google’s distinctive governance structure, corporate culture, and organizational processes as strengths or potential limitations?  Please provide a thorough discussion.
 
Question 2

Google has created a niche for itself in web search, but can it succeed in other areas against its competitors? “This is still a company that derives almost all of its revenues from one business,” according to Scott Kessler, an analyst at Standard & Poor’s.[1]

Consider the following:

  1. Identify four to five of Google’s other product/service lines. How do they compare to those of its competitors? Which product/service lines other than search have been successful for Google, if any?
  2. What advantages do Google’s competitors have that are making it more difficult for Google to move into new markets?  Will Google dilute its prowess in web search by venturing into so many other product/service lines?  Does it really matter?
  3. What new initiatives do you think will be successful for Google in the coming years?

Please provide support for your responses.

[1] Ben Elgin, “So Much Fanfare, So Few Hits.” BusinessWeek, July 10, 2006.

Question 3

You are the head of marketing at a major university, and you want to increase the presence of the school’s programs on-line. Would you choose to advertise on Google or Yahoo? Why? What type of on-line advertising would you pursue? Please be sure to discuss all relevant financial and technological reasons for your decision.

Question 4

Please refer to the financial information for Google that is presented in Exhibit 1. Like others in its industry, Google spends a significant amount on its Research and Development (R&D) efforts.

Ordinarily, an expense is recognized when the benefit associated with a particular expenditure has been consumed (i.e., no future benefit is anticipated from the expenditure). Clearly this is not the expectation a company has when it engages in activities to develop new products and services – the company expects to leverage its R&D activities to increase future revenues. However, because the future benefits associated with R&D expenditures are so uncertain, generally accepted accounting principles require that costs associated with R&D be immediately expensed.

  1. What distortions might this treatment of R&D create in evaluating the financial position and profitability of the company? That is, how might you expect the results of a financial analysis for Google to differ from that of a traditional manufacturing or service company?
  2. The case describes Google’s commitment to “leveraging leading-edge technology” as well as its unconventional approaches to managing innovation in its research and development processes. Using the information in Exhibit 1 as a starting point, how would you evaluate the effectiveness of Google’s “investment” in R&D over the past five years?

Question 5

You are interested in buying stock in Google (symbol, GOOG). Based on the company’s fundamentals (e.g., revenue, earnings per share, etc.), how many shares would you buy if you had $10,000 to invest? $50,000 to invest? $100,000 to invest? $1,000,000 to invest.

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