Comparative Analysis of Marketing Strategies - Yahoo! vs Google

1.1. Google

Google began in January 1996 as a research project by Larry Page, a Ph.D. student at Stanford. In search for a dissertation theme, Page decided to explore the mathematical properties of the World Wide Web understanding its link structure as a huge graph.

Originally the search engine used the Stanford website with the domain google.stanford.edu. The domain google.com was registered on September 15,1997. They formally incorporated their company, Google Inc., on September 7,1998 at a friend's garage in Menlo Park,California.

The name "Google" originated from a misspelling of "googol ," which refers to the number represented by a 1 followed by one-hundred zeros. Having found its way increasingly into everyday language, the verb, "google," was added to the Merryam Collegiate Dictionary and the Oxford English Dictionary in 2006, meaning, "to use the Google search engine to obtain information on the Internet.”By the end of 1998, Google had an index of about 60 million pages.

In March 1999, the company moved into offices at 165 University Avenue in Palo Alto, home to several other noted Silicon Valley technology startups. After quickly outgrowing two other sites, the company leased a complex of buildings in Mountain View at 1600 Amphitheatre Parkway from Silicon Graphics (SGI) in 1999.

The Google search engine attracted a loyal following among the growing number of Internet users, who liked its simple design. In 2000, Google began selling advertisements associated with search keywords. The ads were text-based to maintain an uncluttered page design and to maximize page loading speed. Keywords were sold based on a combination of price bid and clickthroughs, with bidding starting at $.05 per click.

"Don't be evil" is the informal corporate motto (or slogan) for Google, established by Gmail inventor Paul Buchheit.

Don't be evil" is said to recognize that large corporations can often maximize short-term profits with actions that destroy long-term brand image and competitive position. By instilling a Don't Be Evil culture, the corporation establishes a baseline for decision making that can enhance the trust and image of the corporation that outweighs short-term gains from violating the Don't Be Evil principles.

While many companies have ethical codes to govern their conduct, Google made "Don't Be Evil" a central pillar of their identity, and part of their self-proclaimed core values.

1.2. Yahoo!

In January 1994, Jerry Yang and David Filo were Electrical Engineering graduate students at Stanford University. In April 1994, "Jerry and David's Guide to the World Wide Web" was renamed "Yahoo!", for which the official backronym is "Yet Another Hierarchical Officious Oracle". David Filo and Jerry Yang said they selected the name because they liked the word's general definition, which comes from Gulliver's Travels by Jonathan Swift: "rude, unsophisticated and uncouth".

The yahoo.com domain was created on January 18, 1995. Yang and Filo realized their website had massive business potential, and on March 1, 1995, Yahoo! was incorporated. On April 5, 1995, Michael Moritz of Sequoia Capital provided Yahoo! with two rounds of venture capital, raising approximately $3 million. On April 12, 1996, Yahoo! had its initial public offering, raising $33.8 million, by selling 2.6 million shares at $13 each.