Best Companies to Work For (Fortune 2008) : Google

What makes it so great?

Back in our No. 1 spot, Google continued to mint millionaires as the stock cracked $700. The company gives stock options to 99% of employees. Headquarters: Mountain View, CA. 2006 revenue ($ millions): 10,605.

Google's mission is to organize the world's information and make it universally accessible and useful.

As a first step to fulfilling that mission, Google's founders Larry Page and Sergey Brin developed a new approach to online search that took root in a Stanford University dorm room and quickly spread to information seekers around the globe. Google is now widely recognized as the world's largest search engine -- an easy-to-use free service that usually returns relevant results in a fraction of a second.

When you visit www.google.com or one of the dozens of other Google domains, you'll be able to find information in many different languages; check stock quotes, maps, and news headlines; lookup phonebook listings for every city in the United States; search billions of images and peruse the world's largest archive of Usenet messages -- more than 1 billion posts dating back to 1981.

We also provide ways to access all this information without making a special trip to the Google homepage. The Google Toolbar enables you to conduct a Google search from anywhere on the web. And for those times when you're away from your PC altogether, Google can be used from a number of wireless platforms including WAP and i-mode phones.

Google's utility and ease of use have made it one of the world's best known brands almost entirely through word of mouth from satisfied users. As a business, Google generates revenue by providing advertisers with the opportunity to deliver measurable, cost-effective online advertising that is relevant to the information displayed on any given page. This makes the advertising useful to you as well as to the advertiser placing it. We believe you should know when someone has paid to put a message in front of you, so we always distinguish ads from the search results or other content on a page. We don't sell placement in the search results themselves, or allow people to pay for a higher ranking there.

Thousands of advertisers use our Google AdWords program to promote their products and services on the web with targeted advertising, and we believe AdWords is the largest program of its kind. In addition, thousands of web site managers take advantage of our Google AdSense program to deliver ads relevant to the content on their sites, improving their ability to generate revenue and enhancing the experience for their users.

To learn more about Google, click on the link at the left for the area that most interests you. Or type what you want to find into our search box and hit enter. Once you do, you'll be on your way to understanding why others say, "Google is the closest thing the Web has to an ultimate answer machine."

What's a Google?

"Googol" is the mathematical term for a 1 followed by 100 zeros. The term was coined by Milton Sirotta, nephew of American mathematician Edward Kasner, and was popularized in the book, "Mathematics and the Imagination" by Kasner and James Newman. Google's play on the term reflects the company's mission to organize the immense amount of information available on the web.

Business Overview

As with its technology, Google has chosen to ignore conventional wisdom in designing its business. The company started with seed money from angel investors and brought together two competing venture capital firms to fund its first equity round. While the dotcom boom exploded around it and competitors spent millions on marketing campaigns to "build brand," Google focused instead on quietly building a better search engine.

The word quickly spread from one satisfied user to another. With superior search technology and a high volume of traffic at its Google.com site, Google's managers identified two initial opportunities for generating revenue: search services and advertising.

Google grows and business blooms

Over time, these two business lines evolved into complementary networks. Google AdWords advertisers create ads to drive qualified traffic to their sites and generate leads. Google publishing partners deliver those ads targeted to relevant search results powered by Google AdSense. With AdSense, the publisher shares in the revenue generated when readers click on the ads.

For sites wishing to have more control over their intranet or site searches, Google developed the Google Search Appliance, a scalable and secure appliance that delivers accurate search results across any number of documents.

Google continues to think about ways in which technology can improve upon existing ways of doing business. New areas are explored, ideas prototyped and budding services nurtured to make them more useful to advertisers and publishers. However, no matter how distant Google's business model grows from its origins, the root remains providing useful and relevant information to those who are the most important part of the ecosystem – the millions of individuals around the world who rely on Google search to provide the answers they are seeking.

Seven Ways to Fail Big

Paul B Carroll and Chunka Mul

Lessons from The Most Inexecusable Business Failures of The Past 25 years

What causes companies to fail spectacularly ? A recent study of 750 of the biggest U.S. business disasters of the past 25 years reveals that seven popular but risky strategies are often to blame.

Drawing on that extensive research, Carroll, a journalist, and Mul, a fellow at Diamond Management & Technology Consultants, describe seven sirens that lure companies onto the rocks.

Diamond is a management and technology consulting firm. Recognizing that information and technology shape market dynamics, Diamond’s small teams of experts work across functional and organizational boundaries to improve growth and profitability. Since the greatest value in a strategy, and its highest risk, resides in its implementation, Diamond also provides proven execution capabilities. We deliver three critical elements to every project: fact-based objectivity, spirited collaboration, and sustainable results. Diamond is headquartered in Chicago, with locations in Hartford, New York, Washington D.C., London, and Mumbai. Diamond is publicly traded on the Nasdaq Global Market under the symbol "DTPI."

One is the synergy mirage hoped for but nonexistent merger synergies. Group dis ability insure Unum unwittingly pursued these when it acquired individual disability insurer Provident, assuming the units could cross sell each other's products. It turns out they had entirely different sales models and customers.

Pseudo-adjacencies aslo lead companies astray, as school bus operator Laidiaw learned when it spent billions on a move into ambulance services. The firm expected its logistics expertise to carry over but discovered ambulances were not a transportation business but a highly regulated health care business demanding skills it sorely lacked.

Faulty financial engineering,aggressive financial practices don't necessarily lead to fraud, but they can be dicey. The stakes are high-brands and reputations and entire businesses can crumbles as a consequence, and corporate officers may be exposed to massive fines and even prison.

Stubbornly staying the course, redoubling your investment in your current strategy in response to market signals is a strategy itself, and it can lead to disaster. Executives too often kid themselves into thinking that problem isn't so severe or delay any reaction until it is too late.

Bets on the wrong technology, the huge rewards for breakthrough product and services understandably inspire many companies to search relentlessly for the next Google or eBay or iPod. Still, in our research we discovered that many technology-dependent strategies were ill-conceived from the get-go. No amount of luck or sophisticated execution could have saved them. To keep pursuing the strategies that produced these failures-some quite spectacular-companies had to go to great lengths to deceive themselves.

Rushing to consolidate are all dangerous, too, as Conseco, Kodak, Motorola, and Ames can attest. Our research shows that it is sometimes better to sit back and let others fumble through consolidation. Though there's more glory in being buyer, it may be wiser to sell and pocket the cash before industry condition deteriorate.

And a rollup of almost any kind is a high-wire act in which a slight market downtum is all it takes to finish you off. Research shows that more than two-thirds of roll-ups have failed to create any value for investors.

If the executives at these companies had taken a closer look at history, they might have avoided billions in losses. But even experienced teams can fall into these traps. The best way to safeguard your company against them is to institute a formal strategy review by a devi’s advocate panel not involved in strategy development. Its members must have license to ask tough questions, say the authors, who offer guidelines to help panels focus on facts, tes assumptions, and bring to light flaws in the strategy that could lead to costly blunders. Lean more How Harvard Business Review September 2008


Source : Harvard Business Review

How Pixar Fosters Collective creativity

Pixar Animation Studios is an Academy Award ®-winning computer animation studio with the technical, creative and production capabilities to create a new generation of animated feature films, merchandise and other related products. Pixar's objective is to combine proprietary technology and world-class creative talent to develop computer-animated feature films with memorable characters and heartwarming stories that appeal to audiences of all ages.

Pixar Animation Studios, a wholly-owned subsidiary of The Walt Disney Company, is an Academy Award®-winning film studio with world-renowned technical, creative and production capabilities in the art of computer animation. Creator of some of the most successful and beloved animated films of all time, including "Toy Story," "Finding Nemo," "The Incredibles," "Cars," "Ratatouille," and most recently, "WALL•E." The Northern California studio has won 21 Academy Awards and its nine films have grossed more than $4.5 billion at the worldwide box office to date. The next film release from Disney•Pixar is UP (May 29, 2009).

Toy Story, released November 22, 1995, reflects more than nine years of creative and technical achievements. The film received tremendous critical acclaim and became the highest grossing film of 1995, generating $362 million in worldwide box office receipts. Toy Story's director and Disney · Pixar's chief creative officer, John Lasseter, received a Special Achievement Academy Award® for his "inspired leadership of the Pixar Toy Story team resulting in the first feature-length computer animated film."

Pixar has since released A Bug's Life, Toy Story 2, Monsters, Inc., Finding Nemo, and The Incredibles. The six films combined have grossed more than $3.2 billion at the worldwide box office, and Pixar now has six of the top grossing animated films of all time. Toy Story 2, at the time of release, broke numerous opening weekend records all over the world and won a Golden Globe award for Best Picture, Musical or Comedy in 1999.

In 2001, Pixar released the Academy Award®-winning Monsters, Inc., which reached over $100 million at the domestic box office in just 9 days, faster than any animated film in history at the time of its release. Monsters, Inc.'s opening-weekend gross of $62.6 million marked the largest 3-day opening ever for an animated film, the largest 3-day opening in the history of The Walt Disney Studios, the largest 3-day opening in the history of Pixar Animation Studios, and the sixth-largest opening in industry history - records that Monsters, Inc. held until the release of Finding Nemo.

On May 30, 2003, Pixar released Finding Nemo which broke every one of Monsters, Inc.'s opening weekend box office records that had been set only 18-months earlier. Finding Nemo generated $865 million at the global box office and received the Academy Award® for Best Animated Feature Film.

The Incredibles, released in 2004, continued Pixar's success both critically and at the box-office. The film grossed $70.2 million in its first weekend of release in the United States and performed similarly throughout the rest of the world. The film earned more than $620 million worldwide, elevating it to the second highest grossing Pixar film and amongst the 25 highest grossing film of all time. In addition to a multitude of prestigious accolades, praise for The Incredibles has culiminated in a Pixar-record: four Academy Award® nominations.

Directed by Academy Award®-winner John Lasseter, "Cars" opened in theaters on June 9, 2006. “Cars” was the 2007 Golden Globe winner for Best Animated Feature Film and received Academy Award® nominations for Best Animated Feature Film and Best Music - Original Song. The film also won the 2007 Grammy Award for Best Song Written for Motion Picture, Television or Other Visual Media. "Cars" was the #1 animated film on DVD for 2006, and the Disney•Pixar's "Cars" Original Motion Picture Soundtrack debuted in June 2006 at #8, making it the first Pixar soundtrack to enter the Billboard Top 10 and to ship gold.

Many people believe that good iesa are rarer and more valuable than good people, Ed Catmull, president of Pixar and Disney Animation Studios, couldn’t disagree more. That notion, he says, is rooted in a misguided view of creativity that exg-gerates the importance of the initial ideas in devel-opening an original product. And it reflects a profound misunderstanding of how to manage the large risks inherent in producing breakthroughs.

In filmmaking and many other kinds of complex product development, creativity involves a large number of people from different disciplines working effectively together to solve a great many inherently unforeseeable problems. The trick to fostering collective creativity. Catmull says, is threefold : Place the creative authority for product development firmly in the hands of the project learders (as opposed to corporate executives), build a culture and processes that encourage people to share their work-in-progress and support one another as peers; and dismantle the natural barriers that divide disciplines.

Mindful of the rise and fall of so many tech companies, Catmull has also sought ways to continuslly challenge Pixar’s assumptions and search for the flaws that could destroy its culture. Clear values. Constant communication, routine postmortems, and the regular injection of outsiders who will challenge the status quo are necessary but not enough to stay on the rails. Strong leadership is essential to make sure people don’t pay lip service to those standards. For example. Catmull comes to the orientation sessions for all new hires, where he ta lks about the mistakes Pixar has made so people don’t assume that just because the company is successful, everything it does is right. Learn more How Pixar Fosters Collective Creativity


Source : Harvard Business Review

Why Toyota wants GM to be saved

By Chris Isidore
Detroit's Big Three aren't the only automotive companies that want to see the government step in with some much needed financial help.

Overseas automakers, most notably Toyota Motor, all endorse some form of federal aid to keep General Motors (GM, Fortune 500), Chrysler LLC and possibly Ford Motor (F, Fortune 500) out of bankruptcy.

The Senate killed an effort to get the automakers a stopgap loan last week and now the Bush administration has said it is looking at providing the automakers help from the $700 billion approved to bailout banks and Wall Street firms.

"We support measures to help the industry," said Toyota Motor (TM) spokeswoman Mira Sleilati. "We just want a strong, competitive healthy industry."

This may seem surprising at first, especially when you consider that much of the opposition to the auto bailout was from senators from Southern states home to auto plants operated by Asian auto companies, such as Alabama and South Carolina. But the Asian automakers insist they never lobbied against such help for the Big Three.

And this makes sense once you take a closer look at the dynamics of the auto industry and how intertwined the fates of all the companies are.

Here's why Toyota, Honda Motor (HMC) and other Asian auto manufacturers clearly believe they are all better off with GM and Chrysler surviving than if they go out of business.
Collateral damage

The overseas automakers, who between them produce more than 3 million vehicles a year at U.S. plants, all worry their production would be hurt if one of the U.S. automakers went under. That's because a Big Three failure would likely lead to widespread bankruptcies in the auto parts supplier industry.

Erich Merkle, lead auto analyst with the consulting firm Crowe Horwath LLP, said there is much overlap between the automakers' suppliers. Since most parts in an automobile have only a single supplier producing them, the disruptions in production will be severe and prolonged.

"It could take months for a Toyota to work through that and resume normal production," he said.

Merkle said the current network of auto suppliers, manufacturers and dealerships have worked well for the overseas automakers, who have posted steady gains in their U.S. market share during the past few years.

Besides sharing suppliers, many dealers sell both U.S. and overseas brands. So the failure of a U.S. automaker could hurt the overseas manufacturers' dealer network and their sales as well, Merkle said.

"There would be a severe disturbance in the force," he quipped.
Economic shockwaves

A collapse of one of the Big Three would also probably cause an even more severe hit to the U.S. economy. That would further eat into demand for U.S. auto sales, which hit a 26-year low in November.

"The U.S. economy would be in shambles," Merkle said. "The robust U.S. economy that Toyota and the others depend on would suddenly not be as lucrative."

The overseas automakers agree that the last thing they need is for the U.S. economy to slow further. The U.S. is the largest market for Toyota, Honda and Nissan (NSANY). All are expected to report lower U.S. sales this year for the first time ever.

"We want to get the economy back," said Michael Stanton, CEO of the Association of International Automobile Manufacturers, which represents most of the Asian automakers with plants in the U.S. "Everyone is hurting at this level of sales. Everybody is either cutting back or shutting down."

The latest cutbacks came Monday when Toyota announced it was putting plans to open a new plant in Mississippi on hold indefinitely, even though it is about 90% complete. The plant was set to start building the first domestically produced Prius in 2011.

While the overseas automakers would be certain to eventually pick up more U.S. market share if a U.S. automaker stopped doing business, Merkle said the need to sell off the inventory of the failed automaker at fire sale prices would depress all prices in the industry in the short-term.
Enter new competition

The final concern for the overseas automakers is a longer-term problem. If a U.S. automaker fails, that could open the door for a Chinese or Indian automaker to buy up the assets of the failed automaker and create a new low-cost competitor in the U.S.

"You could open the door for foreign companies to buy distressed assets at rock bottom prices," he said. He pointed to India's Tata (TTM) and China's Geely, as two automakers in the developing world that are already on record as being interested in expanding into western markets like the United States.

"Tata and Geely would be incredibly open to brownfield sites," he said, referring to the term used to describe companies that buy discarded industrial facilities.

Toyota and Honda have already felt the effects of competition from other upstarts firsthand in the U.S.

Korean manufacturers Hyundai and Kia have eaten into the sales of Toyota's and Honda's small, inexpensive vehicles, but that growth has taken decades.

Merkle said it might take a year or more for a new competitor to get off the ground. But by grabbing U.S. automakers' assets, vehicle designs and dealerships, an incoming Indian or Chinese manufacturer could quickly become a low-cost threat much quicker than the Koreans.

The established automakers like Toyota and Honda are also unlikely to look to buy the distressed assets themselves because they have never used acquisitions or purchases of other companies' assets as a method of growing.

Instead, they have always built their own facilities from the ground up in order to expand. Merkle said that is unlikely to change, even if the more productive facilities of U.S. automakers were put up for sale by a bankruptcy court, Merkle said.

While companies such as Tata or Geely are likely to eventually enter the U.S. anyway, Merkle said the vacuum caused by the failure of GM or Chrysler could jumpstart those efforts and bring them to the market years earlier than expected.
Source : CNNMoney.com

The Contribution Revolution: Letting Volunteers Build Your Business

Many internet superstars owe much of their success to the active and passive contributions made by countless people from outside their organizations. Think, most obviously, of Facebook profiles, eBay goods, YouTube videos, Wikipedia entries, and, less obviously, of the aggregated buying behavior underlying Amazon recommendations and the donated use of personal-computer resources underpinning Skype’s internet-based phone network.
Facebook is a social networking website launched on February 4, 2004. The free-access website is privately owned and operated by Facebook, Inc. Users can join networks organized by city, workplace, school, and region to connect and interact with other people. People can also add friends and send them messages, and update their personal profile to notify friends about themselves. The website's name refers to the paper facebooks depicting members of a campus community that some US colleges and preparatory schools give to incoming students, faculty, and staff as a way to get to know other people on campus. Mark Zuckerberg founded Facebook while he was a student at Harvard University. Website membership was initially limited to Harvard students, but was expanded to other colleges in the Ivy League. It later expanded further to include any university student, then high school students, and, finally, to anyone aged 13 and over. The website currently has more than 120 million active users worldwide.
eBay Inc. is an American Internet company that manages eBay.com, an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. In addition to its original U.S. website, eBay has established localized websites in thirty other countries. eBay Inc. also owns PayPal, Skype,StubHub, Kijiji,and other businesses.The online auction website was founded in San Jose, California, on September 3, 1995, by French-born Iranian computer programmer Pierre Omidyar as AuctionWeb,part of a larger personal site that included, among other things, Omidyar's own tongue-in-cheek tribute to the Ebola virus.In 1997, the company received approximately $5 million in funding from the venture capital firm Benchmark Capital.
YouTube, LLC is a video sharing website where users can upload, view and share video clips. YouTube was created in February 2005 by three former PayPal employees.In November 2006, YouTube was bought by Google Inc. for 1.65 billion dollars, and is now operated as a subsidiary of Google. The company is based in San Bruno, California, and uses Adobe Flash Video technology to display a wide variety of user-generated video content, including movie clips, TV clips and music videos, as well as amateur content such as video blogging and short original videos. Most of the content on YouTube has been uploaded by members of the public, although media organizations including CBS and the BBC offer some of their material via the site.YouTube was founded by Chad Hurley, Steve Chen and Jawed Karim, who were all early employees of PayPal.Hurley studied design at Indiana University of Pennsylvania, while Chen and Karim studied computer science together at the University of Illinois at Urbana-Champaign.
Amazon.com, Inc.is an American electronic commerce (e-commerce) company in Seattle, Washington. It is America's largest online retailer, with nearly three times the internet sales revenue of runner up Staples, Inc.Jeff Bezos founded Amazon.com, Inc. in 1994, and launched it online in 1995. Amazon.com started as an on-line bookstore, but soon diversified to product lines of VHS, DVD, music CDs, MP3 format, computer software, video games, electronics, apparel, furniture, food, toys, etc. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, China and Japan. It also provides global shipping to certain countries for some of its products (Wikipedia).
Cook, the founder of Intuit (maker of financial software products such as Quicken and TurboTax), challenges traditional companies to tap this emerging source of value by actively creating what he calls user contribution systems.
The user can be a customer, employee, sales prospect—or someone with no previous connection to the company at all. The contribution can be actively offered work, expertise, or information, as well as passive or even unknowing contributions, such as behavioral data that are gathered automatically as a by-product of a transaction or an activity. The system is the method, usually internet based, by which contributions are aggregated and made useful to others. Such a system creates value for a business as a consequence of the value it delivers to customers.
In this article, Cook describes the personal journey that led him to see the tremendous value in user contributions. He creates a taxonomy of the systems that can capture user contributions and shows the variety of ways in which companies from Honda to Procter & Gamble to Hyatt Hotels are leveraging them. And, drawing on his successes and failures in trying to put them to work at Intuit, he offers advice on how business leaders can catalyze action to create user contribution systems in their own organizations.

Source : Harvard Business Review

Development of a Strategy

In Webter's New World Dictionary, the definition of the strategy is the science of planning, and the determination of the direction of military operations, large scale. Strategy is how to propel the team to the most advantageous position before the actual battle with the enemy. Multidevisional big business, usually have a three-level strategy, namely the corporate strategy, business strategy and functional strategy. Corporate strategy describes the overall direction of the company about the company's general attitude towards the growth and management of various business and product lines to achieve a balance portfolio of products and services.
Corporate strategy consists of a single business corporate strategy, and a multi-business corporate strategy. A single corporate business strategy is a corporate strategy, a growth-oriented and industry that will be the place to compete. Meanwhile, a multi-business corporate strategy not only in growth-oriented and industry, that will be the place to compete, but also the management of its business units to achieve synergy.
Business strategy, or competitive strategy, usually developed in the level of division and the emphasis on the improvement of the position of competing products or services companies in specific industries or market segments served by the division. Although many kinds of strategies that are available. Michael Porter has been summarizing strategy into three general types that provide a good beginning for strategic thinking: overall cost leadership, differentiation, and focus.
According to Hamel and Prahalad in his book Competing for the Future, the future competition is a competition will come to dominate and create the opportunities that arise. Creating the future is more than just capture the opportunities that we have set previously. Our objective is not only imitate the products, processes and methods of our competitors, but how to create opportunities for the future and take advantage of these opportunities.
W. Chan Kim and Renee Mauborgne said that the Red Ocean Strategy is no longer effective to create growth and profits in the future. They are proposing a new strategy called the Blue Ocean Strategy. Blue Ocean Strategy, considers that compete is to create market space that is not their. The market is very widely as "blue ocean".
While the strategy is on the third level of functional strategies. The strategy emphasizes the functional, especially in the optimization of resources productivity, for example, marketing strategy, financial strategy, human resource strategy, operating strategy and the strategy of research and development.