Greg has done a lot of scenario building based on scanning.
However not letting any details get in the way I'll take a crazy stab at scenarios. Didn't look at 'strategic gap' (Ansoff) or market growth rates specifically.
Optimistic scenario: Positive marketing environment and transition to on-line spend grows internet advertising market. Google diversifies into other media, becoming a single source supplier for many customers. Development of web-platforms e.g. the Chrome browser, Gears, Andriod lead to ubiquity of the web and in particular web-search. Google's applications successfully become content drivers adding to conversion into clicks. Applications become carriers for Google's advertising and thereby capture a large proportion of software spend. Google provides an end-to-end solution for marketing, tying themselves into marketing supply chains. Google also manages to provide a purchasing directory, thereby tying themselves into consumers supply chains.
Pessimistic scenario: Google gets surpassed by searchme.com with advertising conversions falling to negligible levels (20% of existing?). Worldwide economy falters with marketing spend fulling dramatically in key Google markets, e.g. U.S.. Internet media consolidates into a model more resembling a traditional publishing model with a few significant players - not Google. Hubris at Google results in them spending to 'invent their way out of trouble' compounding the liabilities that expensive fixed-cost platforms have become. Specialist providers have picked of effective platforms such as YouTube, which was never quite consolidated into a coherent part of the Google organisation. Google is forced to charge $25 a year for gmail, obtain revenue through ever more detailed profiles and on-sell 'anonymised' content profiles to Sharman Networks and Mark Zukerberg which coupled with rising unreliability results in mass defection and the sale of the Google brand for $1 to Murdoch.
Gmail-Picassa-Docs etc/storage options:
10GB - $US20/yr | 40GB - $US75/yr | 150Gb - $US250/yr | 400Gb - $US500/yr
Neutral scenario:
These are the revenue growth figures from the Google 2007 Annual report:
| Revenue | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 |
| Y/Y Growth rate | 409.00% | 234.00% | 118.00% | 92.00% | 73.00% | 56.00% |
Clearly the rate of growth is decreasing. As Hamel says – rapid growth leads more quickly to constraints to growth.
I was looking in the y/y growth rate crystal ball. Our hypothesis is that the growth rate needs to be high so as justify share price (P/E 21 in this financial market), to justify expectations and offset a high rate growth rate in costs (69%, 2007). Admittedly the first line starts at a high 50%. Data came from Google investor site.
I can't imagine the 2008 annual growth being too much higher than the Q2 growth rate of 39% given global economics. Growth rates should be able to be compared quarterly, ignoring seasonal factors. Open office 'power regression' (guess that is the -1.19 bit) give me an equation f(x) = 4.56x^-1.19 and an r value of 98 as the closest fit to these numbers. Equation gives 45% growth for 2008, 38% for 2009 and 20% for 2014.
If we took the negative model and mapped linear, Google would be negative in 2007 (r = 0.77).
For costs, I could not get a good model, the 2003 figure probably should be discarded. In 2005,2006, 2007 the rate of growth actually increased to sit at approximately 70%. This is higher than the growth in revenue at 56%
Divergent:
a) Google finds the long-lost patent for the hyperlink and purchases it. It uses this patent and address translation software to become the middle-man in all accesses to internet resources.
b) Big media and authoritarian regimes limit access to freely available sources. The only access is through media company or national portals.
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