MH0029

1 2 5 9420477
R EV: M ay 7, 2015
FRA NK T. R O THA E RME L
CHRISTO PHE R K . ZA HRT
DAVID R. KIN G

Google Inc.
We know where you are. We know where youve been. We can more or less know what youre
thinking about.
-Google CEO Eric Schmidt
May 1, 2015a green light appeared on the dashboard. Googles CEO Larry Page relaxed, knowing
that Googles algorithms had taken control of the self-driving white Lexus RX450h SUV hurtling down
the highway. To his right, another new office building under construction flashed by. E-commerce and
big data analytics, fields that Googles technology had helped to create, were attracting an endless
procession of Internet start-ups to Silicon Valley. You can make an Internet company with 10 people
and it can have billions of users. It doesnt take much capital and it makes a lot of moneya really,
really lot of money,1 he reflected. Even firms like Walmart and Ford were flocking to Silicon Valley in
an attempt to bring their Old Economy business models into the 21st century. Both the physical and
competitive landscape had changed dramatically since the co-founder helped take Google public in
2004. Subsequently, Googles stock consistently went upthat is until early 2015 when it leveled off
(see Exhibit 1).
As Pages SUV automatically swerved around some debris on the pavement, he sighed, contemplating the increasing complexity of managing Google and its external environment.
Google is now far from a startup. In the last five years it has more than doubled its number of
employees from roughly 24,000 in 2010 to more than 53,000 in 2014. The growth was helped by a combination of acquisitions and internal development. Google is famous for bottom-up innovation, such
as enabling employees to spend 20 percent of their time working on new ideas that represent roughly
50 percent of Googles new products.3 However, analysts are increasingly questioning heavy Research
& Development (R&D) investments, which soared in 2014 by 38 percentclose to $10 billionwith
what they see as offering diminishing returns.4 The Google Glass project, an integrated camera and
computer display that was to be worn like a pair of glasses, was abandoned in 201513 years after
Page began tinkering with it.5 The duration of this venture led Google to set a two-year limit on development in order to force earlier decisions on projects.6 While pressure on more disciplined new product
development increased, Google needed to identify new sources of revenue, which in 2014, was almost
entirely dependent on search. At this time, 90 percent of Googles $66 billion in revenue came from
search advertising.7

Professor Frank T. Rothaermel, Research Associate Christopher K. Zahrt, and Professor David R. King prepared this case from public sources.
This case is developed for the purpose of class discussion. It is not intended to be used for any kind of endorsement, source of data, or depiction
of efficient or inefficient management. All opinions expressed, and all errors and omissions, are entirely the authors. by Rothaermel, Zahrt, and
King, 2015.

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from August 2016 to February 2017.

Google Inc.

On the external front, Googles success in search drew increasing scrutiny from regulators, bringing it into contact with new competitors. U.S. regulators at the Federal Trade Commission (FTC) concluded in 2012 that Google used anticompetitive tactics and abused its monopoly power. After the FTC
ended its investigation in 2013 and requested records following Googles voluntary concessions, the
FTC released its findings in a 160-page report in 2015.8 Subsequent to the news of the FTC report, the
European Union (EU) antitrust regulators filed charges against Google, claiming Google used its 90
percent share of Europes search to promote its own services.9 While the ultimate outcome could take
years to resolve, the EU could, in the meantime, impose sanctions on Google to stop behavior they
deem as anticompetitive. As Google faces government regulation, it also faces increased competition
from technology companies such as Apple, Amazon, Facebook, and Microsoft, as well as from firms
in more established industries such as automotive, cable, telecommunications, and more. This rise in
competition is a direct result of an increased convergence in technology and the ability of individuals
to use technology to access information.
The irony of his car knowing where it was going while he was uncertain of where Google was headed
was not lost on Page. Will technology continue to converge and Google thrive, or will Google splinter
from the growing complexity? The threat of EU antitrust charges underscores the latter problem for
Google for it could be forced to dismantle like AT&T did in 1984 after the Department of Justice filed
its antitrust lawsuit. Leaning back in his seat, Larry Page wondered: What kind of company should
Google be in five years?

Google History
Google founders Larry Page and Sergey Brin met in 1995 during a tour for students accepted into
the PhD program at Stanford University. We both found each other obnoxious, recalls Brin only halfjokingly, but we spent a lot of time talking to each other, so there was something there.10 Despite this
rocky start, the pair quickly became inseparable friends.
While working on a dissertation topic, Page realized that the number and quality of links to a website could be used as a proxy for the credibility of that website. However, at that time, there was no
good way to determine what sites were linking to a web page. Page began working on a program called
BackRub that would index links on the web and use this index to rank sites by relevance. Creating this
index took a mammoth amount of bandwidth and computing power. It would regularly bring down
Stanfords Internet connection by the fall of 1996. Page, with Brins mathematical assistance, then created an algorithm within BackRub that used the index to sort web pages by relevance. He called this
algorithm PageRank (named after himself, not web pages).11, 12
The first test of the PageRank system occurred in March of 1996. It became apparent to Page that his
system would make an excellent search engine. Page and Brin, assisted by several classmates, began
refining this search engine. In September of 1997, they decided to name their engine Google, which
was a misspelling of the mathematical term googol: 1 followed by 100 zeros.
On September 4, 1998, Google filed for incorporation and moved its rapidly growing collection of
servers into a garage in nearby Menlo Park, CA. The web was exploding. By 1999, 100 million web
searches occurred every day, and Google needed capital to continue purchasing servers and hiring
computer scientists. 13 , 14 On June 7, 1999, Google announced that legendary Silicon Valley venture capital firms Kleiner Perkins Caufield & Byers (KPCB) and Sequoia Capital made a joint equity investment

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from August 2016 to February 2017.

Google Inc.

of $25 million in the startup, contingent upon finding Larry and Sergey some adult supervision. As
KPCB principal John Doerr observed, Its not saying anything negative about them, but I thought we
would do a much better job of building a world-class management team if they had a world-class CEO.
They agreed, and we closed the financing.15 What would become a lengthy search for a new Google
CEO had begun.
On June 26, 2000, it was announced that Yahoo had licensed Googles search engine. Jeff Mallett,
president and CEO of Yahoo stated Our web directory and navigational guide is critical to the essential set of services that we provide.16 Despite this acknowledgement from Mallet, Google was allowed
to insert a message below the search box stating that Google was providing the search results.
This agreement introduced Google to Yahoos 180 million worldwide users who generated 900M
average daily page views.17 More importantly, this vast increase in traffic allowed Google to fine tune
its search engine.18 By performing statistical analysis on logs of hundreds of millions of user interactions, Googles engineers were able to make its search engine understand contextual clues in search
queries. Simply put, the more users searched, the better search results became.
After more than two years, the search for the right Google CEO came to an end when Eric Schmidt
accepted the position in August of 2001. Schmidt held a PhD in computer science from the UC-Berkeley.
He also had deep technology management experience, having served as an executive at both Sun
Microsystems and Novell. Most importantly for anyone taking on the CEO role at Google, observed
Page, Eric is a natural fit with our corporate culture.19
At the end of the 2001 fiscal year on December 31, another milestone was reached. Google had its
first profitable year, reporting net income of $6.985 million.20 (See Exhibit 2.) It would never again have
a net loss. When we were still in the dot-com boom days, I felt like a schmuck, recalled Sergey Brin,
I had an Internet startup, so did everybody else. It was unprofitable, like everybody elses, and how
hard is that? But when we became profitable, I felt like we had built a real business.21
With a lucrative licensing agreement, a large capital infusion, a proven method of generating profits,
and experienced management in place, Google had indeed become a real business.
For his first coup as CEO, Schmidt made an agreement with AOL to provide them with web search
and paid contextual advertising services. The contract, signed on May 1, 2002, was a major defeat to
rivals Inktomi and Overture, who had previously provided the service. At the time, AOL had 34 million
subscribers, and its site handled 22 percent of all web searches.22 Googles own site served 31.8 percent
of worldwide searches, and through its license with Yahoo, it controlled another 36.3 percent of the
market.23 Google was now a behemoth in search.
Defeated Inktomi executive Vish Makhijani groused, Theyll learn over time that Google takes your
users; it doesnt help you build your property.24 At the time, Yahoo claimed the AOL deal did not
impact their relationship with Google. However, Yahoo removed the Google logo from its homepage
in 2002 and, in December of that year, Yahoo purchased search provider Inktomi for $235 million.25
Google stock was initially offered to the public at $85 per share on August 19, 2004. The IPO was for
8 percent of the company, but only Class A shares were sold.26 At the time, Google had both Class A
and Class B shares. Class B shares were entitled to 10 votes, whereas Class A shares were only entitled
to one. This dual class stock structure allowed Page and Brin to retain control of the company while
raising outside equity capital. Page and Brin further solidified control of Google with a stock split that
gave investors a new class of stock without voting rights in 2014.27

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from August 2016 to February 2017.

Google Inc.

In 2005, Microsoft began a nearly year-long campaign to lure AOL away from Google. Though AOLs
market share was declining, it was still the nations largest Internet service with more than 110 million
unique visits monthly.28 Google countered by giving AOL $300 million of advertising credit, as well as
buying a 5 percent equity stake in AOL for $1 billion.29 This prevented Microsoft from gaining what
Harvard Business School professor David Yoffie termed its single best way to gain market share.30
It also preserved the value of Google ads.31 The defeat of Microsoft guaranteed Googles primacy in
search.
In April 2011, Larry Page replaced Eric Schmidt as CEO of Google with Schmidt remaining as executive chairman.32 Since then, Google has built upon this strategic advantage in online services through
advertising and taking other steps at channel preservation. Online services, such as Gmail, attract users
to Googles sites. These sites, as well as the third-party sites located through the Google search engine,
are monetized through advertising. Google has preserved its access to users through a number of initiatives to protect its channels, such as Android and Chrome. Google has evolved a sophisticated computational infrastructure both to answer its mammoth volume of queries as well as to offer increasingly
innovative products.

Attracting Users with Online Services

SEARCH
Google is strongly associated with search, and in the US it holds a commanding lead with over 67
percent of search compared to 18 percent for Bing and 10 percent for Yahoo.33 Google and web search
have literally been synonymous since 2006, when the term to Google was added to the MerriamWebster Collegiate Dictionary.34 The search engine is constantly being updated, being tweaked 665
times in 2012 alone.35 More relevant search results are important to keeping market share for search
queries that help justify advertising. In 2015, Google made its most significant change in years to make
its search algorithm favor websites that look good on smartphone screens.36 Google answered over 1.2
trillion search queries in 2012 and associated advertising generated 90 percent of Googles $66 billion in
revenue in 2014.37, 38 (See Exhibit 3.) However, most searches do not earn revenue or attract advertisers.
Microsofts online search engine Bing targets the areas with the most advertising revenue (shopping
and travel) in a strategy to ceding unprofitable searches to Google. Meanwhile, Googles large share of
Internet searches has contributed to the company running up against government concerns. In 2014,
Europe passed a right-to-be-forgotten law giving individuals the right to request the removal of
results that appear when their names are searched.39 In 2015, the EU began the process of filing antitrust charges against Google for having a 90 percent market share in search in Europe that rivals allege
favor Googles services.40

MAPS
Approximately 20 percent of all Google desktop searches are for location information.41 Mobile technology makes this information even more crucial to Googles mission. Google Maps got its start in
October of 2004, when the company acquired Where 2 Technologies and Keyhole Corporation. Where
2 Technologies was an Australian mapping startup, and Keyhole was a startup, partially funded by
the CIA,42 that used a database of satellite images and aerial photos to create interactive 3-D maps.43

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from August 2016 to February 2017.

Google Inc.

Eric Schmidt characterized Keyhole as too fundamental to let someone else control it.44 Where 2
Technologies became Google Maps, and Keyhole became Google Earth.
The next significant addition to Google Maps was Street View, a program that displayed photographs of locations based on street addresses. Street View launched on May 25, 2007. It was the fruition of a concept Page had been experimenting with since at least 2001, when he challenged students
at the Stanford Computer Graphics Laboratory to summarize a video of the landscape he had taken
while driving around the Bay Area.45 Street View was initially available for San Francisco, New York,
Las Vegas, Miami, and Denver. The response was overwhelming. We saw traffic go through the roof
and about as high as we could serve, well we hit that limit immediately. Whats great about being at
Google is you get to observe traffic and interest. The launch showed the interest, recalls Luc Vincent,
engineering director of Google Maps.46
To roll out Street View worldwide, Google equipped fleets of cars with panoramic cameras and GPS
units. These cars were then driven over 6 million miles of roads gathering massive amounts of data.47
The maps team publishes more imagery every two weeks than Google possessed in total in 2006.48 The
GPS tracks of the Street View cars update and verify the accuracy of Google maps. Furthermore, OCR
(optical character recognition) technology allows computers to read road signs and incorporate this
information into the map.
In 2013, Google Maps was further bolstered by the $1.1 billion acquisition of Waze, an Israeli firm.
Waze, a crowd-sourced navigation app, allowed its 50 million users to post information such as traffic
jams, road construction, and speed traps in real time.49 One of the motivations behind the acquisition
was to keep the capability from Apple after it removed Google Maps from its operating system in 2012.
This also drove Google to create a map application for Apple devices.50

E-MAIL
Gmail, Googles free e-mail service, uses algorithms to read a users e-mail, determine the subject
of the correspondence, and then display relevant advertising when the e-mail was read. Gmail was
used in-house for several years before being made available to the public on April 1, 2004. At first,
capacity limitations forced Google to offer Gmail by invitation only. This lent Gmail an air of exclusivity. It was hailed as one of the best marketing decision in tech history, but it was a little bit unintentional, admitted Georges Harik, a manager who oversaw the development of Gmail.51 By 2014, Gmail
had become the second most popular e-mail client, after Apples iPhone, reflecting a shift to people
reading e-mail on mobile devices, which hurt Microsofts Outlook.52

CLOUD STORAGE
Google solidified its cloud strategy through the acquisition of Upstartle in March of 2006. Upstartles
main product was Writely, a web-based word-processing program. Writely co-creator Sam Schillace
followed his creation to Google, where he helped transform it into Google Docs. At the time, public
opinion was divided on the subject of cloud computing. However, Google engineers were quick to
grasp its benefits. Ninety-five percent of the company was using it in, like, a month, with no pushing at all recalled Schillace.53 The Google Docs and Spreadsheets service was publicly announced on
October 11, 2006.

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Google Inc.

In 2012, Google Docs was integrated into a new cloud storage service called Google Drive. Drive
was offered as a freemium service. Each user was initially allotted 5GB of free storage, with the ability to add more for a monthly fee. Drive allowed Google to collect user specific information in order
to offer more targeted advertising.54 Primarily targeted at consumer users, Google Drive at the end of
2014 had 240 million users compared to DropBox and Microsoft with 300 million and 250 million users
respectively.55

SOCIAL NETWORKING
Google is playing catch-up in social networking as Facebook dominates this area. Launched in 2004
by Harvard undergraduate Mark Zuckerberg, Facebook users create profiles with photos and information about themselves and connect with others. In 2010, Facebook overtook Google search as the
Internets most popular destination, and Facebooks share of U.S. online advertising surged.56 Google
has struggled with social networking beginning with its first attempt, Orkut. Despite being launched a
month before Facebook, Orkut never gained widespread acceptance and it was shut down in September
of 2014.57 Its next attempt, Google Buzz, resulted in a class action lawsuit and a FTC complaint over
privacy issues. Google Buzz was shut down in late 2011 in order to focus instead on Google+.58
Google+, launched on June 28, 2011, was Googles third attempt at establishing a viable social networking site. While the photo sharing and video conferencing features of Google+ attracted positive
reviews, it lagged significantly behind Facebook. In 2014, Facebook, Twitter, Instagram, and Pinterest
all had more users than Google+.59 In 2014, the Google+ organizational structure was shaken, and Vic
Gundotra, the executive in charge of Google+, departed soon afterward.60 It is likely that Google+ will
be integrated across Googles other platforms rather than being a social network targeted specifically
at consumers.61

Monetizing Users through Advertising

Advertising is the primary way that Google is able to provide its services to consumers. By providing
services free, Google gains market share that enables it to sell more advertising. Googles worldwide
share of worldwide online advertising has held steady at roughly 31 percent since 2012.62 However,
since 2012, Facebook has seen the largest increase in advertising revenues with its display ad revenue
increased 65 percent to $11.5 billion in 2014.63 Facebooks growth largely results from its ability to
match user information with advertisements. Other firms competing for advertising dollars include
Microsoft, Yahoo, Twitter, Amazon, LinkedIn, and Apple. Given the relevance of iPhones and iPads
bought at premium prices, Apple has more than 27 percent of mobile search and its iAd program
commands the highest price for advertising.64 While Apple also gets revenue from selling hardware,
Google remains largely dependent on advertising revenues. The high dependence of Google on advertising has led to some questionable decisions. For example, in 2011, Google agreed to a $500 million
settlement in a U.S. criminal probe over selling advertising for Canadian pharmacies that confirmed
Larry Page knew about and had approved the ads.65 Still, Google pursues advertising revenue in multiple ways.

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Google Inc.

ADWORDS
Google introduced AdWords in October of 2000.66 AdWords made advertising more effective by displaying advertisements that were contextually relevant to a users search query. Advertisers bid on key
search terms, called keywords, in AdWords auctions. AdWords determines the winner of the auction
based both on the advertisers bid amount and on the probability that a Google user will click on the
ad. This probability is determined by an algorithm. Then, when a Google user submits a search query
containing the keyword of the winning bidder, that bidders advertisement is displayed alongside the
search results. AdWords was the key to making Google profitable.

ADSENSE
Google announced the acquisition of Applied Semantics on April 23, 2003 for $102 million in cash
and stock. At the time, it was Googles largest acquisition.67 Applied Semantics most important product
was AdSense, a program that could distill the content of a website into a handful of keywords. AdSense,
when combined with exiting Google technology, opened the entire web to Google advertising in the
following manner: A third party would provide space on their site for advertisements. AdSense algorithms would match the context of the website to appropriate advertisements in the Google inventory.
Advertising revenue was then split between Google and the third party. Sergey Brin called AdSense a
two billion dollar opportunity.68

DOUBLECLICK
Google diversified its online advertising capabilities with the $3.1 billion acquisition of DoubleClick
in 2007. DoubleClick was a leading ad server, delivering display and video ads to third-party websites.
This was a key acquisition for Google because, as Group Product Manager Alex Kinnier observed,
Google . . . has been a minor player in display advertising.69 The acquisition was also motivated by
the deep relationships DoubleClick had developed with both advertisers and web publishers.70 By
October of 2010, Google claimed that its display advertising business was bringing in $2.5 billion annually, though much of this revenue was derived from YouTube.71

YOUTUBE
Google announced the acquisition of online video clip provider YouTube in October 2006. This
is the next step in the evolution of the Internet, enthused Eric Schmidt.72 The purchase of YouTube
allowed Google to extend its reach into the nascent yet rapidly growing field of online video. YouTube
had been in operation less than a year but had already garnered an estimated 50 million viewers.73 With
an acquisition price of $1.65 billion, it was Googles largest deal to date. YouTube allowed Google to
offer advertisers yet another outlet to consumers. YouTube reached a billion regular visitors a month in
2013 and generated an estimated $5.6 billion in revenues.74, 75 While YouTube offers a volume of users
and a variety of content, the addition of channels offers advertisers a way to deliver more relevant
advertising.

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Google Inc.

Channel Protection
ANDROID
In April 2005, pioneering smartphone maker Research in Motion reported that its BlackBerry subscriber base had doubled to 2.5 million users and that we believe we are still in the early days of this
market.76 Therefore, Google had to determine its strategy in the rapidly burgeoning mobile field even
as it wrestled with Microsoft for AOLs user base. As Larry Page recalled, At the time it was extremely
painful developing services for mobile devices. We had a closet full of more than 100 phones and were
building our software pretty much device by device. It was nearly impossible for us to make truly
great mobile experiences.77 To remedy this problem, Google purchased a Silicon Valley startup called
Android in August 2005.
Android became an open source, Linux-based operating system for mobile devices. Because software is a significant cost for smartphones, Google ensured that it would be adopted by handset manufacturers by making it open source. This adoption, in turn, ensured that users could access Google
through their mobile devices. As author Steven Levy observed, Android would be a Trojan horse
for Googles consumer apps, chief among them mobile search. Still, Googles open-source strategy
has additional limitations, including making it more susceptible to malware and modification. For
example, Chinese search company Baidu has negotiated with smartphone manufacturers to remove all
references to Google in Android and replace it with Baidu.78
Even though it is open source, Android is not free to firms using it. Both Apple and Microsoft successfully sued Google for Androids operating system infringing on their intellectual property in 2011,
leading firms that adopt Android to pay licensing fees to Apple and Microsoft.79 Concerns over patents
contributed to Google spending $12.5 billion to acquire Motorola Mobility and then turning around
and selling it to Lenovo for $2.9 billion in 2012, though Google kept Motorolas patents.80 Adopters of
Android also pay Google to have access to other Google services, such as Google Maps and Google
Play.

CHROME
Disparagingly nicknamed chrome by programmers, Google Chrome was launched on September
2, 2008. A stripped-down browser designed for speed, Chrome eschewed the complicated visual interfaces that slowed other browsers down. The motivation for developing Chrome was plain. As KPCB
principal John Doerr explains, I was quite nearly panicked that Google was getting to all the worlds
people through Microsofts browser.81 In 2014, Googles Chrome browser became the second-most
used behind Microsofts Internet Explorer (IE) with 20 percent market share.82 At some point in 2015,
as part of the update to its operating system, Microsoft plans to end support of IE with a new browser
called Edge.83
In 2011, after two years of development, Chrome evolved into an operating system (OS) for laptops
sold by Acer.84 However, Chrome OS has not been widely adopted. The predominant OS is Windows
7, which combines with other Microsoft operating systems to represent approximately 90 percent of the
worlds computers.85 Microsofts Windows OS represents its primary product and source of revenue.
Interestingly, Google has phased out the use of Microsoft operating systems on employee computers
citing security concerns; exceptions require the approval of the CIO (chief information officer).86

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Google Inc.

GOOGLE FIBER AND WIRELESS

Increasing Internet access for all has become a primary concern for Google, since the increase in
searches and associated advertising revenue depends on growing the number of people online. On
February 10, 2010, Google announced plans to build its own experimental fiber optic network in a city
ranging from 50,000 to 500,000 people. The goal of the experiment was to deliver 1 gigabit per second Internet speeds to residential customers. More than 1,000 cities applied to receive Google Fiber.87
Kansas City, Kansas was selected, based upon its offer of free rights of way, expedited permitting, office
space, and other free perks.88 Google Fiber then announced plans to build networks in Provo, Utah
and Austin, Texas. AT&T activated its own gigabit Internet service in Austin, ahead of Google Fibers
anticipated start in December 2014.89
In 2015, Google attempted to integrate into the U.S. wireless service, an industry dominated by a
few players: AT&T, Verizon, T-Mobile, and Sprint.90 Currently, Google is able to offer wireless service
cheaper than established industry players as it can supplement wireless subscriptions with advertising. Initially, the service is only available by invitation and via Googles Nexus 6 phone. However,
contrary to industry practice, Google plans to credit customer accounts when they do not use all of
their data. Googles service will default to Wi-Fi hotspots and default to Sprint or T-Mobile networks
if Wi-Fi is not available.

Data Center Infrastructure

In order to both answer a huge volume of search queries and to index the exponentially growing
number of websites around the world, Google began building a network of large data centers in 2005.
Google purchased 30 acres in The Dalles, Oregon for its first data center.91 These data centers were
designed to be 50 percent more efficient than the current state of the art. More data centers soon followed. By 2013, it had more than one million servers.92 Googles infrastructure demands were so large
that its in-house server production probably [made] us one of the largest hardware manufacturers in
the world, according to Google CFO Patrick Pichette.93 As a result of these data centers requiring huge
amounts of electricity to operate (more than 2 million megawatt hours were consumed in 2010), Google
began investing in renewable energy.94, 95

Internet of Things (IoT)

The Internet of Things (IoT) is a catch-all phrase used to describe the ecosystem of devices connected to the Internet. Traditionally, the online world was reserved only for computers and cell phones.
However, because of IPv6, the latest version of how Internet Protocol addresses are assigned, and a
dramatic decrease in chip costs, a virtually limitless number of IP addresses have allowed devices as
prosaic as door locks and coffee makers to feature Internet connectivity. 96 A recent study by McKinsey
estimated that 20 billion to 30 billion devices could be connected by the year 2020.97 By then, the value
of the IoT market is expected to exceed $7 trillion.98 Because the real value is more about the connections of things than the items themselves, the real battleground in IoT is over network standards, for
which both closed and open standards have been proposed.

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Google Inc.

The best known closed IoT standard is Apples HomeKit with the first HomeKit certified devices
debuting at the 2015 Consumer Electronics Show.99 A closed standard is consistent with Apples previous policy of maintaining control of its hardware and the software running on it. Apple takes the
approach that having a totally closed ecosystem allows it to create a more perfect experience for their
customer, and its hard to argue with the success they have had, observes Mark VandenBrink, leader
of worldwide engineering for Frog Design.100 It also enables better monetization of its customers by
controlling access to them and their purchasing decisions (e.g., apps, music).
For open standards, multiple solutions are vying for primacy. The first from AllSeen Alliance, based
on Qualcomms AllJoyn software, represents a consortium of LG Electronics, Panasonic, Qualcomm,
Sharp,101 Sony, Microsoft, and others. AllSeen unveiled its first products at the 2015 Consumer Electronics
Show. Rivaling the AllSeen Alliance is the Open Internet Consortium (OIC), which counts Samsung,
Intel, Cisco, and General Electric among its members. OIC terms its standard IoTivity. Both standards
are based on Linux, leading IoTivity steering-group chair Mark Skarpness to state, In the end, it would
be great for the industry if they would merge, and Im still hoping to influence that.102 Meanwhile,
Google is working to provide another option for an open standard. In 2011, Google unveiled its own
smart home platform called Android@Home.103 After Android@Home failed to gain widespread adoption, Google purchased Nest Labs for $3.2 in 2014 and it has been using Nests Linux-based operating
system as its IoT platform. Google opened the Nest platform to developers in June 2014.104 In addition
to standards options, IoT can also be divided into industrial- and consumer-facing applications.

Industrial Internet
The Industrial Internet, a term coined by GE CEO Jeff Immelt in 2012, encompasses a wide variety
of industrial applications.105 One example is the smart grid. Electrical distribution networks can be
made more efficient through the use of connected sensors. Further, these sensors will enable homeowners to feed excess electricity generated by solar arrays or windmills back to the grid in what is termed
distributed generation.106 Predictive maintenance of capital assets and smart factories also fall under
the umbrella of the Industrial Internet. The anticipated impact of increased efficiency in industrial
operations is anticipated to be large. Morgan Stanley, for instance, estimated that the Industrial Internet
could lead to $500 billion in global savings for manufacturers.107
The potential savings is causing a sea change in thinking in traditional manufacturing firms. For
example, Dr. Stefan Ferber, Director of Business Development of the Internet of Things & Services at
Bosch Software Innovations GmbH observes:
What we have, then, is a competitive arena full of Old and New Economy companies, all jostling for position and attempting to shape the future. Long-standing producers in traditional industrial fieldswhether
they make coffee machines, cars, air conditioners, home gym equipment, or shoesare suddenly not only
competing with companies of their own breed; they are also confronting players the like of which they
have never faced before.108

The result is that Old Economy manufacturers are finding that they can make much higher margins on providing analytic services on their capital goods than they can on the goods themselves.109 The
problem is that others are already working to leverage their products to provide associated information, which Bill Ruh, Vice President of GE Software, summarizes thusly:

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Industrial people who arent in the game today, who are not making the kind of investments were making,
its like someone in the retail sector now saying, We want to be like Amazon too. But you cant be like
Amazon. Its too late. And in the industrial sector, you have to take the risk now. Because by the time its
obvious, which is a few years from now, its going to be too late.110

The increased emphasis on the Industrial Internet underscores the potential need for Google to shift
its focus from consumer search to better consider the needs and applications of business customers.

Consumer IoT Applications

Google has consistently focused on consumers, and it has a presence in all three categories of consumer IoT: (1) wearables, (2) the connected home, and (3) the autonomous vehicle.

WEARABLES
Wearables are connected devices that are small enough to be worn comfortably on ones body for
extended periods of time. The increased competition in wearables can be seen by different companies
introducing multiple products (see Exhibit 4). Wearables can be further classified into two broad areas
of hands-free Internet access and the monitoring of personal fitness or other applications that have
implications for Google and more broadly corporations as a whole.
A controversial, hands-free Internet access device was Google Glass. Glass was developed by the
companys Google X research lab. Its launch in 2012 was similar to that of Gmail, in that it was first
distributed to a specially selected group of Explorers for testing before being released to the general
public in 2014. Users gave Glass tepid reviews due to its short battery life and its limited functionality. The public reaction was even worse. The awkward design led some to refer to Glass as a Segway
for your face.111 The device was often seen as a sign of pretension, spawning the derogatory term
Glasshole.112 People feared they were being surreptitiously filmed by Glass wearers, leading The
Atlantic magazine to observe that, very few people are willing to be viewed as walking, talking invasions of privacy.113 Google removed Glass from the consumer market in early 2015, but planned to
continue its development under Nest Lab founder Tony Fadell. Emerging technologies such as LED
micro displays and contact lenses that can magnify projected images may allow glasses-type interfaces
to become more useful and less obtrusive in the future.114
An earlier and more successful product category involves health monitoring. In 2007, Fitbit ushered
in the era of wearable devices with the Fitbit Tracker, a miniature accelerometer that tracks peoples
exercise habits. As the pioneer, Fitbit continues to enjoy the largest market share in this category (see
Exhibit 5) with competing health tracker, such as the Jawbone UP not being introduced until 2011. Still,
newer offerings have increased functionality, such as tracking heart rate, altitude, body temperature,
sleep patterns and more. For example, Jawbone users have logged more than 130 million nights of
sleep, 1.6 trillion steps, and 180 million items of food.115 User data is becoming more valuable than the
devices themselves, as Jawbone VP of Data Monica Rogati says: You take all that data, and you can
see interesting patterns emerge.116 Jawbone CEO Hosain Rahman agrees, stating I think of hardware as a customer-acquisition device. Well know similar things to Facebook.117 To that aim, Jawbone
purchased data analysis company Massive Health in order to make sense of the flood of information
pouring into Jawbones servers.118

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So far, Google has largely focused on providing apps under Google Fit that use sensors in other
devices to track user fitness goals. It appears Google entered this space in response to Apples Health
application, and it highlights increased competitive contact with Apple on desktop and mobile operating systems, maps, etc.119 The competition will likely heat up as Apple offers Apple Watch, which
combines hands-free Internet access, synced with a cell phone, that alerts users of incoming texts,
e-mails, and status updates, as well as integrating health tracking. The acceptance of smartwatches is
unknown, as the first smartwatch, Sonys LiveView that was unveiled in 2010, failed to garner many
sales. Samsung introduced its Gear watch in late 2013. A review of the Gear in the New York Times
opined that Nobody will buy this watch, and nobody should.120
However, the release of the Apple Watch in April 2015 was significant in that it made wearables more
fashionable. Robert Brunner, the designer of the Beats by Dre headphone, observes that, Capturing
peoples imagination in a way that makes them want to put your stuff on their body is a skill set that
not many people have. It definitely doesnt exist in many large corporations.121 This has forced technology firms to recruit talent from the fashion industry, such as Angela Ahrendts, the former CEO of
Burberry who became Apples head of retail in 2014. Another limitation of wearables involves battery
life. For example, a concern about the Apple Watch is its battery life that is advertised as 18 hours
but could only last 3 hours of talking paired to an iPhone and a recharge time of 2.5 hours.122 In 2012,
Google formed a team led by a former Apple employee to help Google control more of its destiny with
over 20 projects that depend on batteries.123 While multiple concerns about wearable devices remain,
Goldman Sachs expects the market to be worth nearly $20 billion by 2017.124

CONNECTED HOME
The addition of Internet connectivity to household appliances offers the ability to operate devices
remotely. This enhanced control allows homeowners to perform a host of household activities anywhere, such as unlocking doors with their smartphones, adjusting the thermostat from their cars,
or viewing live-streaming security camera footage from their tablets. By the end of 2014, 13 percent
of homes with a broadband connection were estimated to have at least one smart-home device.125
Goldman Sachs estimated that the connected home market would be valued at over $12 billion by
2017.126
Because the market for connected home devices is so broad, the space has become crowded.
Appliance makers such as LG Electronics and Whirlpool have introduced new lines of connected
products. Startups are also targeting the connected home. Microsoft Corporate Vice President Steven
Guggenheimer observed that, The Internet of Things, and home automation in particular, is rapidly
emerging. With consumer demand growing for solutions that are intuitive, connected and affordable,
there are tremendous opportunities for new players in the space.127 To capitalize on these opportunities, Microsoft recruited 10 startups to its IoT business accelerator in 2014. Google has pursued a
similar strategy, purchasing thermostat-maker Nest for $3.2 billion in January of 2014. Five months
later, Nest purchased home security device provider Dropcam for $555 million. Apple has taken a
different approach, concentrating on its HomeKit software platform. By focusing on software, Apple
is not exposed to the risk and expense of manufacturing physical devices for which there is uncertain
demand.128

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Google Inc.

AUTONOMOUS VEHICLES
IoT also extends to vehicles, and the integration of Internet connectivity into vehicles is termed
telematics. Telematics depends on software to enhance driver convenience, such as enabling the
vehicle to be unlocked with the drivers cellphone, starting a car without a key, and allowing vehicles to
diagnose and report problems to a mechanic before the car arrives at the garage. Telematics-equipped
vehicles can also be used as Wi-Fi hotspots, allowing media streaming and web browsing (collectively
termed infotainment) while the vehicle is in motion. Internet connectivity is one of the enabling technologies for autonomous vehicles, due to the massive amount of data and detailed maps these vehicles
require. Lux Research estimates that by 2030 the market for autonomous cars could reach $87 billion.129
Because connectivity is achieved through the cellular network, some of the biggest players in the
space are cellular carriers. For example, Verizon has partnered with Mercedes-Benz and Volkswagen,
among others. Not to be outdone, AT&T has announced deals with eight different automakers.130 AT&T
also launched its telematics research laboratory, called Drive Studio, in Atlanta, Georgia in 2014. Glenn
Lurie, president of Emerging Enterprises and Partnerships with AT&T Mobility, stated, Our goal is to
be the best carrier for connected car innovation in the world.131
Telematics is forcing major automakers to expand into unfamiliar technologies.132 Bill Ford, the
Chairman of Ford Motor Company, admits: The reality is that we will not own, or develop, most of
these technologies. So we have to be a thoughtful integrator of other peoples technologies and understand where we add value. Because if were not careful, we could become like some mobile-handset
makers, where all the value is added by someone else.133 This recognizes that technology firms are
becoming increasingly active with automobiles.
Microsoft, Google, and Apple each have projects in automobile projects. Microsoft has taken a collaborative approach to partner in developing different telematics platforms for Kia (UVO), Toyota
(Entune), Fiat (Blue&Me) and Ford (SYNC). SYNC is absolutely impacting our top line revenue in
terms of improved vehicle sales, net transaction pricing, and incremental revenue from SYNC services, states Fords Paul Mascarenas, VP of Engineering for Global Product Development. Meanwhile,
Google publicly began its autonomous car program in 2009. Sebastian Thrun, who led the effort, stated,
Our goal is to help prevent traffic accidents, free up peoples time and reduce carbon emissions by
fundamentally changing car use.134 This is a real concern as human error contributes to approximately
90 percent of all traffic accidents that are responsible for 1.24 million deaths worldwide annually.135 At
the start of 2015, Apple was rumored to have begun development of an electric car that resembles a
minivan under the code name Titan.136 The interest in autonomous vehicles goes beyond reduced
traffic fatalities.
A direct benefit of reduced accidents are insurance firms that can also use telematics to gather
information about how a car is driven to more accurately price policies with products termed usagebased insurance (UBI). Allstates Drivewise and Progressives Snapshot are two examples of UBI.
UBI allows drivers to obtain discounted premiums by providing insurers with information obtained
from a telematics device. In 2013, Allstate claimed that 7 out of 10 drivers received a discount through
Drivewise, which on average was 13 percent.137 However, consumers have voiced privacy concerns,
and only 8 percent of U.S. drivers signed up for UBI through July 2014; still, this is twice the acceptance
rate in 2013.138

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Google Inc.

Another benefit that autonomous vehicles could deliver is significant reductions in greenhouse gas
emissions. Drivers seeking parking spaces are responsible for 30 percent of urban, vehicle-related pollution.139 Barcelona is realizing $67 million in annual savings through the use of embedding sensors
that allow drivers to locate vacant parking spaces.140 This figure will go up considerably once the
vehicle is able to deliver the driver to her destination and then park itself. Vehicle-to-vehicle communication (V2V) will allow so-called adaptive cruise control to maintain more constant vehicle speed
by better anticipating changing traffic conditions. One study estimated that a 20 percent reduction in
speed fluctuation could lead to a 5 percent reduction in fuel consumption.141 V2V would also allow
vehicles to travel in closely spaced platoons. The aerodynamic benefit of platooning yielded a 15
percent reduction in truck fuel consumption in one Japanese test.142 Vehicle to infrastructure communication (V2I) will allow vehicles to interface with traffic signals, reducing both the number of stops and
the amount of idling at stoplights. Andy Palmer, executive vice president of Nissan Motor Company,
estimates that autonomous vehicle technology could reduce CO2 emissions by 300 million metric tons
a year.143
Despite these obvious benefits of autonomous vehicles and potential benefits to personal productivity, significant roadblocks to widespread adoption remain. Perhaps the biggest hindrance is concern
over liability. Once driving is controlled by software, liability will pass from the driver to the creator of
that software. Similarly, state laws must be amended to allow the operation of autonomous vehicles.
Price is another concern. The cost of Googles autonomous equipment has been estimated at $80,000 per
vehicle.144 Finally, while Googles test cars have logged hundreds of thousands of miles, the technology
is not yet ready to scale. The highly accurate maps required by the car have only been prepared for a
few thousand miles of road.145 Furthermore, Google does not allow autonomous vehicles to operate
in challenging weather conditions, such as snow, ice, and dense fog, or in certain road conditions such
as roundabouts and railroad crossings that are not signaled.146 Companies with autonomous vehicle
aspirations are undeterred by these roadblocks.
Reasons for optimism include a growing demand for automobiles, a better understanding of the
required technology, and potential savings. Worldwide demand for automobiles is expected to expand
from 80 million a year in 2014 to 107 million in 2020.147 In comments, Renault-Nissan CEO Carlos
Ghosn observed: I dont see any impossible obstacle. I think this is something you are going to see on
the horizon of 2020 because the technologies are getting mature.148 Tesla CEO Elon Musk estimates
that, while the technology will be ready by 2020, regulatory issues will prevent wide-scale deployment
at that time.149
It is estimated that autonomous vehicles could save the U.S. economy $450 billion annually150 with
savings coming primarily from the more efficient use of cars. Currently, cars sit unused for a majority
of the time. While reliable data on personal car utilization is not tracked, rental car company fleets are
rented around 70 percent of the time.151 This drives a higher cost for personal automobiles than public transportation, but the cost is often paid to enable flexibility. A fleet of autonomous vehicles could
change that and expand growing interest in car sharing, such as ZipCar, Lyft, or Uber. For example,
Uber has announced it is starting to work on autonomous cars to remove the cost of taxi drivers.152
Combining autonomous cars with mobile apps for payment and reserving rides in them would offer
both flexibility and higher utilization of vehicles.

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Google Inc.

The Road Ahead

As his car drove itself to his destination, Page furrowed his brow. There was literally trillions of dollars of value to be realized in information technology as everything from coffee makers to diesel locomotives went online. However, this tantalizing valuation was spurring a bevy of competing firms to
make large R&D investments (see Exhibit 6). The result was several companies with diverse capabilities vying to succeed in what was increasingly the same competitive space. For Page, this meant leading Google into unfamiliar territory, such as consumer goods and industrial products, with decidedly
mixed results. At the same time, Googles foundation in search continued to provide the majority of
Googles revenue at the same time the EU was exploring a legal remedy to limit that dominance. Both
the shifting sands of technology and government regulation were threats that could not be ignored.
Tapping his finger while listening to a song streaming from his Google Play Music collection, Page
wondered: What strategy could provide the guidance needed for Google to maintain both its reputation for technology innovation and healthy profitability?

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Google Inc.

EXHIBIT 1 Google Stock Price and NASDAQ, 1/1/20044/30/2015

GOOGL Price % Change Apr 30 15

NASDAQ 100 Level % Change Apr 30 15
1.05K%
950.0%

953.7%

850.0%
750.0%
650.0%
550.0%
450.0%
350.0%
250.0%

226.2%

150.0%
50.00%
-50.0%
2006

2008

2010

2012

2014

Source: Authors depiction of publicly available data using YCHARTS, http://ycharts.com/

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Google Inc.

EXHIBIT 2 Google Net Income and Key Events, 19982014

16000

Nest Labs acquired

Waze acquired

14000

Larry Page becomes

CEO, Google+ launches

Net Income ($ millions)

12000
10000
8000
6000
4000
2000

Autonomous car
unveiled

AdSense acquired
AdWords unveiled,
first AOL deal
First Profitable Year

Launch of Google
Drive & Google Play

Chrome browser launch

Google Fiber
announced

Android acquired,
second AOL deal

Yahoo licenses
search engine

DoubleClick acquired
YouTube acquired

0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Year

Source: Depiction of publicly available data drawn from Yahoo.

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Google Inc.

Exhibit 3 Google Financial Data, 20102014 (in $ millions, except EPS data)
Fiscal Year

2010

2011

2012

2013

2014

Cash and short-term investments

34,975

44,626

48,088

58,717

64,395

Receivables (total)

5,002

6,172

8,585

9,390

11,556

Inventories (total)

35

505

426

Property, plant, and equipment (net total)

7,759

9,603

11,854

16,524

2,3883

Depreciation, depletion, and amortization (accumulated)

4,012

4,797

5,843

7,313

8863

Assets (total)

57,851

72,574

93,798

110,920

13,1133

Accounts payable (trade)

483

588

2,012

2,453

1,715

Long-term debt

2,986

2,988

2,236

3,228

Liabilities (total)

11,610

14,429

22,083

23,611

26,633

Stockholders equity (total)

46,241

58,145

71,715

87,309

104,500

Sales (net)

29,321

37,905

50,175

59,825

66,001

Cost of goods sold

9,036

11,351

17,633

21,885

20,711

Selling, general, and administrative expense

8,523

12,475

16,284

19,912

23,814

Income taxes

2,291

2,589

2,598

2,282

3,331

Income before extraordinary items

8,505

9,737

10,788

12,214

13,928

Net income (loss)

8,505

9,737

10,737

12,920

14,444

Earnings per share (basic) excluding extraordinary items

26.69

30.17

32.97

36.7

20.61

Earnings per share (diluted) excluding extraordinary items

26.31

29.76

32.46

36.05

20.27

Source: Depiction of publicly available data drawn from Yahoo.

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Google Inc.

EXHIBIT 4 Googles Stock Price and Selected Product Introductions

GOOGL
NASDAQ
60%

January 14, 2014

Nest aquisition announced

50%

September 3, 2013
Samsung unveils
Gear smartwatch

Return

40%
30%

October 29, 2014

Microsoft releases Band fitness tracker

April 15, 2013

Glass Explorer
Program launch

20%
June 2, 2014
Apple iOS 8 with
HomeKit announced

10%

January 15, 2015

Google removes Glass
from consumer market

0%
4/15/13

8/15/13

12/15/13

4/15/14

8/15/14

12/15/14

Date

Source: Depiction of publicly available data drawn from Yahoo.

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Google Inc.

EXHIBIT 5 Fitness Band Market Share Q3Q4 2013

Other
7.6%
Nike
13.7%

Fitbit
57.6%
Jawbone
21.1%

Source: Canalys.

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Google Inc.

EXHIBIT 6 Top 20 R&D Budgets, 2014

Rank

Company

IoT Strength

R&D Budget ($B)*

Volkswagen

Automotive

13.5

Samsung

Operating system, devices

13.4

Intel

Integrated chip sets

10.6

Microsoft

Data analytics, cloud platform, operating system, devices

10.4

Roche

N/A

10

Novartis

N/A

9.9

Toyota

Automotive

9.1

Johnson & Johnson

N/A

8.2

Google

Data analytics, cloud platform, operating system, devices, proven

autonomous vehicle technology

10

Merck

N/A

7.5

11

GM

Automotive

7.2

12

Daimler

Automotive

13

Pfizer

N/A

6.7

14

Amazon

Data analytics, cloud platform, devices

6.6

15

Ford

Automotive

6.4

16

Sanofi-Aventis

N/A

6.3

17

Honda

Automotive

6.3

18

IBM

Technology services

6.2

19

GlaxoSmith Kline

N/A

6.1

20

Cisco

Networking

5.9

*R&D spend data is based on the most recent full-year figures reported prior to July 1st.
Source: Adapted from PwC Strategy& The top innovators and spenders www.strategyand.pwc.com/global/home/
what-we-think/global-innovation-1000/top-innovators-spenders

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Endnotes
1 Waters, Richard. FT interview with Google co-founder and CEO Larry Page. Financial Times. 31 October 2014.
2 http://www.statista.com/statistics/273744/number-of-full-time-google-employees/
3 Johnson, S. 2010. Where good ideas come from: The natural history of innovation. Riverhead Books, New York.
4 Alistair Barr. 2015. Google lab puts a time limit on innovations, The Wall Street Journal. 31 March 2015.
5 Levy, Steven. Googles Larry Page on Why Moon Shots Matter. Wired. 17 January 2013.
6 Alistair Barr. 2015. Google lab puts a time limit on innovations, The Wall Street Journal. 31 March 2015.
7 Winkler, Rolfe. Google gives boost to mobile-friendly sites, The Wall Street Journal, 21 April 2015.
8 Brody Mullins, Winkler, Rolfe, and Kendall, Brent. Inside the U.S. antitrust probe of Google The Wall Street
Journal. 19 March 2015.
9 Valentinia Pop, and Fairless, Tom. Europe to pull trigger on Google The Wall Street Journal. 15 April 2015.
10 Battelle, John. The Birth of Google. Wired. August 2005.
11 Ibid.
12 Levy, Steven. (2011), In the Plex (New York, NY: Simon & Shuster).
13 Google Receives $25 Million in Equity Funding. Google. 7 June 1999.
14 In the Plex.
15 Ibid.
16 http://www.google.com/googlefriends/alert2_2000.html
17 Yahoo 2000 Annual Report.
18 In the Plex.
19 Google Names Dr. Eric Schmidt Chief Executive Officer. Google. 6 August 2001.
20 2003 Financial Tables. Google Investor Relations.
21 In the Plex.
22 Gallagher, David F. AOL Shifts Key Contract to Google. The New York Times. 2 May 2002.
23 Teather, David. How Google got it so right. The Guardian. 5 May 2002.
24 Mangalindan, Mylene and Angwin, Julia. Google Lands Pact with AOL, Strengthening IPO Prospects. The
Wall Street Journal. 2 May 2002.
25 Google turns 10: A look back Fortune. 5 September 2008.
26 Ritter, Jay. Googles IPO, 10 Years Later. Forbes. 7 August 2014.
27 Floyd Norris. The man classes of Google stock The New York Times. 2 April 2014.
28 Vise, David. Google to Buy 5% of AOL for $1 Billion. The Washington Post. 17 December 2005.
29 AOL-Google: Who Gets What. Business Week. 20 December 2005

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30 Hansell, Saul, AOLs Choice of Google Leaves Microsoft as the Outsider. The New York Times. 19 December
2005
31 Edelman, Benjamin and Eisenmann, Thomas (2010), Teaching Note: Google Inc. and Google Inc. (Abridged)
(5-910-0505), Harvard Business School, June 1.
32 Liedtke, M. 2011. Has Page learned from first stint as Google CEO? Milwaukee Journal Sentinel: 3 April, p. 3D.
33 http://searchenginewatch.com/sew/study/2345837/google-search-engine-market-share-nears-68#
34 Thaw, Jonathan. To Google: Merriam-Webster Defines Google as a Verb (Update1). Bloomberg. 6 July 2006.
Accessed 15 Nov 2014.
35 Inside Search. Google.com. Accessed 15 November, 2014
36 Winkler, Rolfe. Google gives boost to mobile-friendly sites, The Wall Street Journal, 21 April
37 Zeitgeist 2012. Google. Accessed 15 November 14, 2014
38 Winkler, Rolfe. Google gives boost to mobile-friendly sites, The Wall Street Journal, 21 April 2015.
39 http://www.wsj.com/articles/google-starts-removing-search-results-under-europes-right-to-be-forgotten-1403774023
40 Pop, Valentina, and Fairless, Tom. Europe to pull trigger on Google. The Wall Street Journal. 15 April 2015.
41 Fisher, Adam. Googles Road Map to Global Domination. The New York Times Magazine. 11 December 2013.
42 In the Plex.
43 Google Acquires Keyhole. The Wall Street Journal. 27 October 2004.
44 In the Plex.
45 http://www.graphics.stanford.edu/projects/cityblock/ Accessed 14 November 2014.
46 Olanoff, Drew. Inside Google Street View: From Larry Pages Car to the Depths of the Grand Canyon.
TechCrunch. 8 March 2013. Accessed 14 November 2014.
47 Fisher, Adam. Googles Road Map to Global Domination. The New York Times Magazine. 11 December 2013.
48 Madrigal, Alexis. How Google Builds Its Mapsand What It Means for the Future of Everything. The
Atlantic. 6 September 2012.
49 Womack, Brian. Google Buys Waze in Push to Expand in Mobile Mapping. Bloomberg. 11 June 2013.
Accessed 15 November 2014.
50 Letzing, J., Lessin, J. New detour to Google Maps. The Wall Street Journal, 14 December 2012.
51 McCracken, Harry. How Gmail Happened: The Inside Story of Its Launch 10 Years Ago. Time. 1 April 2014.
52 https://litmus.com/blog/53-of-emails-opened-on-mobile-outlook-opens-decrease-33
53 In the Plex.
54 Griffith, Erin. Whos winning the consumer cloud storage wars? Fortune. 6 November 2014.
55 http://fortune.com/2014/11/06/dropbox-google-drive-microsoft-onedrive/
56 Fowler, G. 2011. Facebooks web of frenemies, The Wall Street Journal, 11 February, p. B1.

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57 Huet, Ellen. Google Finally Shuts Down Orkut, Its First Social Network. Forbes. 30 June 2014. Accessed 16
November 2014.
58 Google Official Blog. A fall sweep. 14 Oct. 2011. Accessed 16 November 2014.
59 http://www.usnews.com/news/articles/2014/04/30/has-facebook-beaten-google-plus
60 Winkler, Rolfe. Google+ Chief Vic Gundotra Departs. The Wall Street Journal. 24 April 2014.
61 http://www.usnews.com/news/articles/2014/04/30/has-facebook-beaten-google-plus
62 http://www.statista.com/statistics/193530/market-share-of-net-us-online-ad-revenues-of-google-since-2009/
63 Rolfe Winkler and Marshall, Jack. Google imitates Facebook with email marketing The Wall Street Journal. 15
April 2015.
64 http://www.operasoftware.com/press/releases/general/2015-02-03
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68 In the Plex.
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81 In the Plex.
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83 http://www.cnet.com/news/meet-microsoft-edge-the-replacement-for-internet-explorer/
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89 Grisales, Claudia. AT&T: Web fight wont affect Austin customers. Austin American-Statesman. 12 Nov 2014.
90 Barr, Alistair, and Knutson, Ryan. Google wireless service undercuts phone plans, The Wall Street Journal. 23
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91 In the Plex.
92 Steve Ballmer: Worldwide Partner Conference 2013 Keynote. Microsoft News Center. 8 July 2013. Accessed
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93 McMillan, Robert. Google: Were One of the Worlds Largest Hardware Makers. Wired. 22 June 2012.
94 https://gigaom.com/2011/09/08/google-reveals-electricity-use-aims-for-a-third-clean-power-by-2012/
95 http://www.google.com/green/bigpicture/
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108 Ibid.
109 Ferber, Stefan. How the Internet of Things Changes Everything. Harvard Business Review. 7 May 2013.
110 Gertner, Jon. Behind GEs Vision for the Industrial Internet of Things. Fast Company. July/August 2014.
111 Stone, Brad. Inside Googles Secret Lab. Bloomberg Businessweek. 22 May 2013.
112 Honan, Mat. I, Glasshole. Wired. 30 December 2013.
113 Swearingen, Jake. How the Camera Doomed Google Glass. The Atlantic. 15 January 2015.
114 Metz, Rachel. Google Glass Is Dead; Long Live Smart Glasses. MIT Technology Review. 26 November 2014.
115 Walsh, Bryan. The Doctor on Your Wrist. Time. 14 November 2014.
116 Ibid.
117 Lashinsky, Adam. Jawbone: The trials of a 16-year-old cant-miss startup. Fortune. 22 January 2015.
118 Olson, Parmy. A Massive Social Experiment on You Is Under Way, and You Will Love It. Forbes. 21 January
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119 http://readwrite.com/2015/03/24/google-fit-vs-apple-health
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121 Wasik, Bill. Why Wearable Tech Will Be as Big as the Smartphone. Wired. 17 December 2013.
122 http://www.zdnet.com/article/apple-watch-official-battery-data/
123 Barr, A. Google joins the better-battery parade The Wall Street Journal: 11-12 April 2015.
124 What Is the Internet of Things? Macroeconomic Insights. Goldman Sachs. September 2014.
125 Clark, D. The Race to Build Command Centers for Smart Homes. The Wall Street Journal. 4 January 2015.
126 What Is the Internet of Things? Macroeconomic Insights. Goldman Sachs. September 2014.
127 Ravindranath, M. 10 start-ups join Microsofts Internet of Things accelerator. The Washington Post. 13
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128 Lapowsky, I. Why Apple Wants to Make a Remote Control for Your Home. Wired. 27 May 2014.
129 http://www.luxresearchinc.com/news-and-events/press-releases/read/
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131 Seward, Christopher. AT&T Drive Studio opens to develop connected car. Atlanta Journal-Constitution. 16
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132 Gao, Paul, Hensley, Russell and Zielke, Andreas. A road map to the future for the auto industry. McKinsey
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134 Thrun, Sebastian. What were driving at. Official Blog. Google. 9 October 2009. Accessed 14 Nov 2014.

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135 Look, no hands. The Economist. 20 April 2013.

Gao, Paul, Hensley, Russell and Zielke, Andreas. A road map to the future for the auto industry. McKinsey
Quarterly. October 2014. This doesnt seem to be linked to a note in the text. Does it belong to #135?
136 Wakabayahshi, D, and Ramsey, M. 2015. Apple secretly gears up to create car, The Wall Street Journal,
February 14, p. A1.
137 Allstate Courts Third Party Developers for Driver Monitoring Mobile Platform. The Wall Street Journal. 16
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138 Yerak, Becky. More consumers say no way to driver-monitoring programs. Chicago Tribune. 15 January
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139 Chambers, John and Elfrink, Wim. The Future of Cities. Foreign Affairs. 31 October 2014.
140 Ibid.
141 Fagnant, Daniel and Kockelman, Kara. Preparing a Nation for Autonomous Vehicles: Opportunities,
Barriers and Policy Recommendations. Eno Center for Transportation. Washington DC. October 2013.
142 Heine, Max. Mercy sakes alive, looks like we got us a robot convoy. www.overdriveonline.com 11 April
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143 A New Leaf. The Economist. 30 August 2013.
144 In the self-driving seat. The Economist. 31 May 2014.
145 Gomes, Lee. Hidden Obstacles for Googles Self-Driving Cars. MIT Technology Review. 28 August 2014.
146 Harris, Mark. How Googles Autonomous Car Passed the First U.S. State Self-Driving Test. IEEE Spectrum.
Posted 10 September 2014. Accessed 19 September 2014.
147 Gloom and boom. The Economist. 20 April 2013.
148 Look, no hands. The Economist. 20 April 2013.
149 Ramsey, Mike. Tesla CEO Musk Sees Fully Autonomous Car Ready in Five or Six Years. The Wall Street
Journal. 17 September 2014.
150 Fagnant, Daniel and Kockelman, Kara. Preparing a Nation for Autonomous Vehicles: Opportunities,
Barriers and Policy Recommendations. Eno Center for Transportation. Washington, DC. October 2013.
151 http://ir.avisbudgetgroup.com/secfiling.cfm?filingID=723612-14-41&CIK=723612
152 http://money.cnn.com/2015/02/03/technology/innovationnation/uber-self-driving-cars/

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