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Diversification Strategy in Internet Industry: Case of Google Inc.

Year 2018, Volume: 20 Issue: 3, 271 - 289, 27.12.2018
https://doi.org/10.32709/akusosbil.407405

Abstract

One of the growth strategies for business
is to buy other businesses. Growth either may be related to main business area
of firm or different fields from different sectors. This study examines the
buying strategy of Google Inc. which is an important company in the internet
industry with an oligopolistic structure created by a limited number of
operators (Amazon, Google, Microsoft, Facebook, etc.). Between the years of 2001
and 2017, 177 acquisitions were examined. As a result of this review, it
appears that Google Inc. has acquired businesses that manufacture in different
technological areas. However, those acquisitions increased abilities of
generating revenues from its core business. Consequently, among 177
acquisitions, constrained-related diversification model is most frequently observed
strategy which is aimed to increase performance of main business. 

References

  • Ansoff, H. (1958). A Model for Diversification. Management Science, 392-415.
  • Arthur, E. (2017). Strategic Decision Making: Google’s Acquisitions, Partnerships and the “Toothbrush Test”. The 15th Annual Conference on Telecommunications and Information Technology (s. 1-11). Nashville, Tennessee: ITERA.
  • Bhatia, A., & Thakur, A. (2016). Diversification Strategies of Multi-national and Domestic Companies in India: A Comparative Evaluation in the Dynamic Environment. Management and Labour Studies, 41(3), 199 - 215.
  • Crookes, D. (2014, 1 30). The 142 Companies That Google Has Bought (And How It Affects You). Micro Mart, s. 1-6.
  • Dolata, U. (2017). Apple, Amazon, Google, Facebook, Microsoft: Market concentration - competition - innovation strategies. Stuttgartt: University of Stuttgart.
  • Dyck, B., & Mitchell J.Neubert. (2009). Management: Current Practices and New Directions. Boston: Houghton Mifflin Harcourt Publishin Company.
  • Google (Yöneten). (2009). I/O 2009 - Keynot [Video].
  • Google (Yöneten). (2012). Google I/O 2012 - Keynote [Video].
  • Google (Yöneten). (2014). Google I/O 2014 - Keynote, [Video].
  • Google (Yöneten). (2015). Google I/O 2015 - Keynote [Video].
  • Google (Yöneten). (2016). Google I/O 2016 - Keynote [Video].
  • Google (Yöneten). (2017). Google I/O 2017-Keynote [Video].
  • Grant, R. M. (2016). Contemporary Strategy Analysis, Text and Cases. West Sussex: John Wiley & Sons Ltd.
  • Griffith, E. (2017, 1 30). Google Is On the Prowl For Cloud and AI Deals in 2017. Fortune: http://fortune.com/2017/01/30/google-acquisitions-2017 adresinden alınmıştır
  • Heracleous, L. (2001). What is the Impact of Corporate Governance on Organisational Performance? Corporate Governance: An International Review, 9(3), 165-173.
  • Hong, A., Bhattacharyya, D., & Geis, G. (2012). The Role of M&A in Market Convergence: Amazon, Apple, Google and Microsoft . 18th International Business Research Conference, (s. 1-9). Nevada.
  • Mayer, M., & Whittington, R. (2003). Diversification in context: a cross-national and cross-temporal extension. Strategic Management Journal, 24(8), 773–781.
  • Peng, M. W., & Delios, A. (2006). What determines the scope of the firm over time and around the world? AnAsia Pacific perspective. Asia Pacific Journal of Management, 23(4), 385– 405.
  • Picone, P. M., & Dagnino, G. B. (2016). Revamping research on unrelated diversification strategy: perspectives, opportunities and challenges for future inquiry. Journal of Management & Governance, 413-445.
  • Rumelt, R. P. (1974). Strategy, Structure and Economic Performance. Cambridge, MA,: Harvard University Press.
  • Tsai, C.-C. (1994). Diversification Strategies For Construction Companies In The U.S., Yayınlanmamış Doktora Tezi . Masachusets: MIT.
  • Ulgen, H., & Mirze., K. (2007). Stratejik Yönetim. Istanbul: Arıkan.
  • United States Securities and Exchange Commission. (2012). FORM 10-K, For the Fiscal Year Ended December 31, 2012. Washington: United States Securities and Exchange Commission,.
  • United States Securities and Exchange Commission. (2016). Alphabet Inc., FORM 10-K, For the Fiscal Year Ended December 31, 2016. Washington: United States Securities and Exchange Commission.
  • United States Securities and Exchange Commission. (2017). FORM 10-K, For the Fiscal Year Ended December 31, 2017. Washington: United States Securities and Exchange Commission.
  • United States Security and Exchange Commission. (2007, 03 01). Google Inc., a Delaware Corporation. List of Subidiaries of Registrant: https://www.sec.gov/Archives/edgar/data/1288776/000119312507044494/dex2101.htm adresinden alınmıştır.
  • Varadarajan, P., & Ramanujam, V. (1987). Diversification and performance: A re-examination using a new two-dimensional conceptualization of diversity in firms. Academy of Management Journal, 380-393.
  • Żukowska, J., & Pindelsk, M. (2011). Growth Strategies – Case Study. J. Czech-Rogosz, J. Pietrucha, & R. Iron içinde, Wybrane Aspekty Przemian Strukturalnych (s. 237-245). Katowice: Publisher University of Economics.

Diversification Strategy in Internet Industry: Google Inc. Example

Year 2018, Volume: 20 Issue: 3, 271 - 289, 27.12.2018
https://doi.org/10.32709/akusosbil.407405

Abstract

İşletmeler
için büyüme stratejilerinden birisi diğer işletmeleri satın almaktır. Büyüme,
işletmenin esas faaliyet alanı ile ilgili olabilirken, farklı sektörlerden
farklı faaliyet alanları ile ilgili de olabilmektedir. Bu çalışmada sınırlı
sayıda işletmenin (Amazon, Google, Microsoft, Facebook gibi.) oluşturduğu
oligopol bir yapıya sahip internet sektöründe önemli bir şirket olan Google
Inc.’nin satın alma stratejisi incelenmiştir. 2001 ve 2017 tarihleri arasında
177 adet satın alma işlemi incelenmiştir. Bu inceleme sonucunda Google Inc.’nin
farklı teknolojik alanlarda üretim yapan işletmeleri satın aldığı fakat bu
satın almalar sonucunda esas faaliyet alanında elde ettiği gelirleri artıracak
yeteneklere sahip olduğu görülmektedir. Sonuç olarak, seçilen Google örneğinde
177 satın alma arasında “kısıtlı ilişkili çeşitlendirme” modeli, temel işin
performansını arttırmaya yönelik en sık gözlenen strateji olarak
belirlenmiştir.

References

  • Ansoff, H. (1958). A Model for Diversification. Management Science, 392-415.
  • Arthur, E. (2017). Strategic Decision Making: Google’s Acquisitions, Partnerships and the “Toothbrush Test”. The 15th Annual Conference on Telecommunications and Information Technology (s. 1-11). Nashville, Tennessee: ITERA.
  • Bhatia, A., & Thakur, A. (2016). Diversification Strategies of Multi-national and Domestic Companies in India: A Comparative Evaluation in the Dynamic Environment. Management and Labour Studies, 41(3), 199 - 215.
  • Crookes, D. (2014, 1 30). The 142 Companies That Google Has Bought (And How It Affects You). Micro Mart, s. 1-6.
  • Dolata, U. (2017). Apple, Amazon, Google, Facebook, Microsoft: Market concentration - competition - innovation strategies. Stuttgartt: University of Stuttgart.
  • Dyck, B., & Mitchell J.Neubert. (2009). Management: Current Practices and New Directions. Boston: Houghton Mifflin Harcourt Publishin Company.
  • Google (Yöneten). (2009). I/O 2009 - Keynot [Video].
  • Google (Yöneten). (2012). Google I/O 2012 - Keynote [Video].
  • Google (Yöneten). (2014). Google I/O 2014 - Keynote, [Video].
  • Google (Yöneten). (2015). Google I/O 2015 - Keynote [Video].
  • Google (Yöneten). (2016). Google I/O 2016 - Keynote [Video].
  • Google (Yöneten). (2017). Google I/O 2017-Keynote [Video].
  • Grant, R. M. (2016). Contemporary Strategy Analysis, Text and Cases. West Sussex: John Wiley & Sons Ltd.
  • Griffith, E. (2017, 1 30). Google Is On the Prowl For Cloud and AI Deals in 2017. Fortune: http://fortune.com/2017/01/30/google-acquisitions-2017 adresinden alınmıştır
  • Heracleous, L. (2001). What is the Impact of Corporate Governance on Organisational Performance? Corporate Governance: An International Review, 9(3), 165-173.
  • Hong, A., Bhattacharyya, D., & Geis, G. (2012). The Role of M&A in Market Convergence: Amazon, Apple, Google and Microsoft . 18th International Business Research Conference, (s. 1-9). Nevada.
  • Mayer, M., & Whittington, R. (2003). Diversification in context: a cross-national and cross-temporal extension. Strategic Management Journal, 24(8), 773–781.
  • Peng, M. W., & Delios, A. (2006). What determines the scope of the firm over time and around the world? AnAsia Pacific perspective. Asia Pacific Journal of Management, 23(4), 385– 405.
  • Picone, P. M., & Dagnino, G. B. (2016). Revamping research on unrelated diversification strategy: perspectives, opportunities and challenges for future inquiry. Journal of Management & Governance, 413-445.
  • Rumelt, R. P. (1974). Strategy, Structure and Economic Performance. Cambridge, MA,: Harvard University Press.
  • Tsai, C.-C. (1994). Diversification Strategies For Construction Companies In The U.S., Yayınlanmamış Doktora Tezi . Masachusets: MIT.
  • Ulgen, H., & Mirze., K. (2007). Stratejik Yönetim. Istanbul: Arıkan.
  • United States Securities and Exchange Commission. (2012). FORM 10-K, For the Fiscal Year Ended December 31, 2012. Washington: United States Securities and Exchange Commission,.
  • United States Securities and Exchange Commission. (2016). Alphabet Inc., FORM 10-K, For the Fiscal Year Ended December 31, 2016. Washington: United States Securities and Exchange Commission.
  • United States Securities and Exchange Commission. (2017). FORM 10-K, For the Fiscal Year Ended December 31, 2017. Washington: United States Securities and Exchange Commission.
  • United States Security and Exchange Commission. (2007, 03 01). Google Inc., a Delaware Corporation. List of Subidiaries of Registrant: https://www.sec.gov/Archives/edgar/data/1288776/000119312507044494/dex2101.htm adresinden alınmıştır.
  • Varadarajan, P., & Ramanujam, V. (1987). Diversification and performance: A re-examination using a new two-dimensional conceptualization of diversity in firms. Academy of Management Journal, 380-393.
  • Żukowska, J., & Pindelsk, M. (2011). Growth Strategies – Case Study. J. Czech-Rogosz, J. Pietrucha, & R. Iron içinde, Wybrane Aspekty Przemian Strukturalnych (s. 237-245). Katowice: Publisher University of Economics.
There are 28 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Eyüp Bayram Şekerli 0000-0003-1562-4716

Eyüp Akçetin 0000-0001-7232-2154

Publication Date December 27, 2018
Submission Date March 18, 2018
Published in Issue Year 2018 Volume: 20 Issue: 3

Cite

APA Şekerli, E. B., & Akçetin, E. (2018). Diversification Strategy in Internet Industry: Case of Google Inc. Afyon Kocatepe Üniversitesi Sosyal Bilimler Dergisi, 20(3), 271-289. https://doi.org/10.32709/akusosbil.407405

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