Google is the Net's leading provider of consumer search technology. In August, Google brought in former Novell CEO Eric Schmidt to lead the company. Here are his recommendations:
CHALLENGE
Keep innovating: Google's technology tops that of rivals because it rates Web links by their relevance rather than just searching text. Now, it must stay ahead of the pack.
SOLUTION
Search more of the Web: Google is developing technology so that search queries will be more accurate. It's adding images and new documents to expand its database.
PROSPECTS
Excellent: Half of Google's 230 employees are engineers, many of whom have PhDs in computer science. In short, it has the brainpower and the plan to stay on top.
CHALLENGE
Pump up ad revenues: Ad sales make up 50% of Google's revenues. Despite a 10% increase in ad sales every quarter since its inception, only a sliver comes from foreign companies.
SOLUTION
Go global: Google needs more feet on the street outside the U.S. It has recently opened sales offices in Britain and Japan, with one in Germany expected by yearend.
PROSPECTS
Fair: Google is playing catch-up to Web giants such as Yahoo!, which has 25 country-specific Web sites and pulls in 18% of its revenues from international ads. New offices are costly.
CHALLENGE
Find new customers: Google's technology powers the search engines of more than 100 portals, including Yahoo. But the company has only seven corporate customers.
SOLUTION
Crack corporations: Google believes it can use its brand name and know-how to break into more businesses. It's also counting on Schmidt's Rolodex to help get in the door.
PROSPECTS
Poor: It will be difficult for Google to edge out entrenched rivals such as Inktomi and AltaVista, which have 2,500 and 1,000 corporate customers respectively.
CHALLENGE
Count the beans better: Google is preparing to go public next year, but it must first put in place financial managers and processes that resonate with Wall Street.
SOLUTION
Hire a CFO: Schmidt replaced a small-business accounting package with heavy-duty financial software. Now, he needs a chief financial officer who can build rapport with analysts.
PROSPECTS
Good: Google has the brand name and two quarters of operating profits that could lure a high-profile CFO. Investment bankers are already clamoring for a piece of its IPO.
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