Five Forces- Google

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Five Forces Analysis of the Search Based Advertising Competitive Structure Search-based advertising has attracted enormous attention in the advertising industry as it offers unprecedented ability to target potential customers with quantifiable returns. Bargaining Power of Buyers and Suppliers The bargaining power of both the buyers and suppliers is relatively low because the online audience usually determines the exchange between the buyer and the supplier and also because of the Auction process where the Buyers negotiate between themselves (E.g. Google and X Company) Threat of New Entrants The barriers to entry in the Internet search market are high. The current competitors have thousands of servers deployed in locations all over the. A new entrant would need to provide better search results at very fast speeds to compete in this highly competitive market. Google and its competitors have established its brand around the globe and also have technology advances that they use to their advantage. The entry barriers are quite high therefore the threat of new entrants is low. The existing brands have a huge advantage. Rivalry The rivalry in the search based advertising market is intense because it is quite a huge market generating $450 billion earnings worldwide. The demand in this market is high and is constantly growing. Google experiences major profits in this market because of its auction methodology. Google’s stated goal is to “organize the world’s information” (Google, 2008), and to merit they have created many complimentary products to their main Internet search service. Google has the largest Market share in this industry and this helps them to improve the quality of their search results and targeted ads more quickly than their competitors. Potential Substitutes In 2008, the Internet has become the mode

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