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JOSE RIZAL UNIVERSITY

Graduate School

GS 301
(Management Information Systems)

“Google, Apple, and Facebook Battle for your Internet


Experience”
Case Study No. 7

Submitted to:
Prof. Juanito S. Chan

Submitted By:
Group 1

Mariane Celeste A. Ayson


Lourlyn C. Espedido
Xavier Ann Castillo
Jayson T. Tasarra
Introduction: A brief Company’s profile, status and Condition

There is an epic battle between the three internet giants Apple, Google, and Facebook to
dominate our internet experience. Modern mobile devices now have more advanced functionality,
better internet access and are taking over as a more popular form of computing compared to traditional
desktop machines. People spend more time on their phones compared to computers and laptops so
whoever has the better operating system will have more control over the apps that users spend most of
their time on, which translates to more revenue from ads and services. These three internet giants have
adapted their business models to suit mobile computing to gain massive revenues.

Apple started as a personal computer (PC) company but over the years it has quickly extended
its portfolio to software and more consumer electronics. Apple focuses on innovation and elegance
which gives them an edge over competitors. Their millions of mobile applications make their user
experience better.

Google has been known to have the world’s leading search engine from both mobile devices and
computers. Over the years they acquired Androids operating system which they provided at no cost to
smartphone manufacturers. Android is now active on over 80 percent of smartphones in the world and
have over 2 billion users. Google still has 84 percent of its revenues coming from Alphabet, its parent
company despite its numerous user services.

Facebook on the other hand is not in the user device market but is the largest social networking
service. Through the years Facebook has also become an important gateway to the internet with users
spending more time on Facebook than any other service on the internet. 98 percent of Facebooks
revenues comes from advertising and more specifically 89 percent of those revenues comes from
advertising on mobiles.

All three companies see the importance of being on top the mobile computing and
advertisement market. Large portions of their revenues come from mobile advertising, hence the saying
that whoever has the best mobile operating system will control the applications user spend most of
their time on. In Facebooks case, having additional services on their platform will keep them
competitive. For Google is providing wide ranges of services to give them more opportunity or platforms
to be able to run ads and generate more revenue. Apple focuses on device elegance and consumer
experience in new revenue services like iCloud storage, Apple music, etc. Facebook and Google thrive on
monetizing user data with also presents privacy issues white Apple emphasizes on privacy protection
and doesn’t share information on its users. All three companies have monopolistic behaviors and how
the government responds will determine how these organizations will operate in the future. Critics in
the U.S have requested they become regulated instead of existing as mega companies.

Statement of the Problem


1. Why is mobile computing so important to these three firms?
2. Why is the issue of “net neutrality” important to these businesses?

Identifying Major Issues

Where would our society be without the internet? Society, including businesses, relies heavily
for the means to access data or send information in the most expedient manner. Timeliness of
information delivery could be the difference between profits earned or lost and even as serious as a loss
of life if the wrong information is delivered. Currently, Apple, Facebook, and Google are in tremendous
competition to deliver the best services to enhance your internet experience via mobile or desktop
computing. Some of the major issues or challenges that these companies will face are net neutrality;
proprietary vs opens standard software, and the mobile computing experience.

Net neutrality is the idea that “all users have equal access to content and applications regardless
of the source or nature of the content" (Laudon & Laudon, 2015). Net neutrality has been supported by
internet giants and content providers Google and Facebook, but bandwidth owners may disagree. For
example,” if those who own that bandwidth were able to price discriminate then they would: and this
would mean revenue portions of those services would move over from content providers to bandwidth
providers” (Worstall, T., 2014). Despite supporting net neutrality, Facebook CEO Mark Zuckerberg,
believes that it is “not subtainable to offer the whole internet for free” (BBC, 2015). This was in
response to the launch of Internet.org protesters arguing that “it would compromise the principles of
net neutrality, because it favors access to some sites and apps” (BBC, 2015).

Proprietary versus open software could be become a major issue as larger companies are buying
smaller companies that thrive off of open software and essentially adding elements to that software
arguably making that software proprietary (Kepes, B., 2013). In 2013, Oracle purchased the open source
cloud vendor Nimbula; mixing this open source platform with other technologies to create its very own
cloud platform” (Kepes, B., 2013). Companies like Apple has thrived in proprietary software marketing
becoming the first US company worth 700 billion (CNN Money, 2015).

These three companies have a common goal of making money. Each company has produced
similar devices to compete with one another; it’s only a matter of time before Facebook joins the mobile
device industry. However, for now Google and Apple remain fiercely competitive. In 2005, Google
purchased Android open source mobile operating system and founded Open Handset Alliance to
compete with Apple’s proprietary software in mobile computing (Laudon & Laudon, 2015). Facebook is
able to compete with these giants because of its popularity and use on mobile devices. With Facebook
evolving as a legitimate advertiser and Google challenging Apple on mobile devices, the future of mobile
computing will be quite exciting (Laudon & Laudon, 2015).

Comparation of Business Models and Core Competencies of Google, Apple, and Facebook.

Apple: Apples’ business model is about focusing on having the most superior and elegant looking
devices while having a wide range on application for its users. They focus on innovation and constantly
coming up with now user features and device ideas. Their core competency is finding a way to match
elegance with innovation, which is what makes them stand out from other brands or companies.

The Apple business model consist of "distribution deals for licensing others' content, integration of
proprietary hardware and software, and its ability to restrict users' rights based on copyright laws,
contracts, and technology measures" (Reder, 2009). The very core competency for apple would be its
mobile music devices, iTunes music store, applications store...also ventured into very high definition
monitors. Apple OS considered more secure although vulnerabilities do exist. The difference of open
software use with Google and proprietary software use with Apple is also a major difference.

Google: The Google business model consists of maintaining search engine dominance and earning
revenue through advertisements. A core competency for Google would be its use of core products like
AdWords which allows advertisers to purchase keywords that will increase online visibility.

Googles business model and core competency is diversity or polyhedral, which means that it provides a
wide range of services that could be beneficial to users, developers, or businesses. Users have access to
a lot of free services or service options from emails to YouTube. Businesses have the opportunity to
advertise on all their platforms.
Facebook: Like Apple and Google, Facebook also provides a wide range of services for its users. But from
my understanding, Facebooks uses an advertising-based model. Although they created a platform to
connect people, they generate their revenues from advertising and letting businesses create targeted
ads based on data collected from users.

Facebook digitally connects people worldwide as a means to socialize, collaborate, play games, and now
advertise which is quite similar to Google. Facebook’s business model "depends on the way it crunches
the streams of profile and activity data generated by the social media site’s more than 1 billion users in
order to deliver targeted advertisements" (Kanarakcus, C.,2013). This similarity puts Facebook in direct
competition with Google as far as advertisers paying for keywords or consumer data to earn business.

Important of Mobile Computing

Mobile computing is so important to these firms because of the real-time demand from
consumers. Consumers want the convenience and functionality of desktop applications "on the go" or
"on the move". Interestingly, the mobile applications are becoming more user-friendly and accessible
than desktop applications on certain devices. More importantly, "people spend more than half their
time online using mobile devices.

Strategies of Each Firm.

Facebook mobile strategy is a part of his overall strategy of connecting the internet to the two-
thirds of humanity that is currently offline. To achieve this type of global dominance, smart phones,
tablets, and other mobile devices will be needed. As a part of Facebook's mobile strategy, it teamed up
with a set of mobile operators and handset manufactures to create Internet.org which aims to connect
the next 5 billion people. This initiative is designed to make Facebook the "on-ramp to the internet" and
offer other free services that include Facebook messenger and Wikipedia.

Apple revolutionized how people buy, listen to, and make music by introducing the iPod. Their
strategy of enhancing the experience of using a mobile device was apparent with the development of
the "App Store". Apple believes that apps are the new equivalent of the traditional browser and
whoever creates the most appealing set of applications and devices will have a significant competitive
edge over rival companies. Apple also expanded its strategy by providing a way for customers to pay in
store using a mobile device. Apple pay has changed how purchases are made using contactless
payment technology and unique security features built right into the mobile devices you have every day.
This innovation further deepens the need or wants for mobile computing. Mobile computing crosses all
markets including archaeological purposes. Through the power of mobile computing , Archaeologists
are able to use iPads to provide a robust and reliable way to collect data in the field Apple's mobile
device dominance is a direct reflection of its strategy of wanting to be the platform of choice for the
internet.

Google's strategy to continue search dominance by providing the most relevant search results
has also led to advertising growth. Google has completely dominated online advertising with "AdWords,
its keyword-based search advertising product; AdSense, the online advertising network; and
DoubleClick, an intermediary between online publishers and ad networks that buys, sells, and conducts
performance reporting on display advertising space. What is important about this strategy is the ability
to specifically target advertisements to mobile device users when the Google search engine is used.
Google's main source of revenue comes from advertisers paying for the number of times users click on
their advertisements. This is accomplished by the Google AdWords program which allows advertisers to
purchase keywords used by consumers while searching online. Google purchase of the Android open
source mobile operating system and creation of the Open Handset Alliance in 2005, continues to
provide dividends to its mobile computing strategy (Schonfeld, E., 2007).

Why is the issue of “net neutrality” important to these businesses?

The issue of net neutrality is important to corporations such as Apple, Google, and Facebook
because it "allows customers equal access to content and applications, regardless of the source or
nature of content" (Laudon & Laudon, 2015). The real issue comes down to money and how it is
divided. If net neutrality doesn't exist, then customers could be affected by higher costs because of
businesses having to pay other businesses a substantial amount of capital to protect its brand integrity.
It also comes down to bandwidth utilization with anti-net-neutrality supporters arguing that businesses
should be charged more according to the type of services they provide and the amount of bandwidth
the service requires.

Comcast and Netflix were involved in a bitter spat about net neutrality. Netflix claimed Comcast
was the cause for poor download speeds for its movie streaming customers (Diallo, A., 2014). Comcast
fought back saying that because Netflix accounted for a large amount of internet traffic, they (Netflix)
should share the cost of upgrading systems to facilitate a better customer streaming experience (Diallo,
A., 2014).
Adherence to net neutrality rules should allow customers paying for internet access to get what
they're paying for no matter where the content came from (Diallo, A., 2014). Even though Facebook
founder Mark Zuckerberg supports net neutrality, he also believes that it is "not sustainable to offer the
whole internet for free...it costs tens of billions of dollars every year to run the internet..." (BBC, 2015).
Even Google may inadvertently teeter with neutrality rules with a term called "search neutrality".
According to Wharton Business School Professor Eric Clemons “search neutrality” will be the next fight
in overall net neutrality (Shavin, N., 2014). " Search neutrality is the idea that search results should be
free of social, political, or financial agendas and that results are sorted by revelance, not by a hidden pay
structure or opinions of the search engine's owners" (Shavin, N., 2014).

What difference would it make to a business or an individual if Apple, Google, or Facebook dominated
the internet experience?

 Businesses: A lot of businesses will benefit if any of these companies dominated the
market. They have a bigger platform to advertise their services, especially if Facebooks
dominates because there will be an abundance of data, they can use to better improve
their business performance

 Users: Some users might benefit, and some might suffer. For Facebook users that are
knowledgeable can enjoy the added services that would result in Facebook dominating the
market because they know how to protect their privacy, but other users might suffer
because there’s a bigger stage that their data can be collected without knowledge. Also, if
any of the companies dominate the market, they might slow down on product research and
not care about making their services better to serve the public, they might also behave as
badly by selling user data and infringing privacy rights.

Which company and business model do you think is most likely to dominate the internet and why?

In the coming years, I believe Google is most likely to dominate the internet. Googles Android
OS alone has over 2 billion active users and is already in possession of 80 percent of smartphones
market. Google is more diverse compared to Facebook, as well as Apple who have a more exclusive
service. They also have 90% of the mobile search market that is also a default search engine for Apples
iPhone. Also, Facebook has been under fire recently for misleading users and violating user’s privacy and
if they don’t change their policies, their value will go down drastically.

Recommendation

Recommend to Google how it could use business intelligence tools to support decision making in a
highly competitive  environment

A recommendation could be to ensure a good information policy is established. "An information


policy specifies the organization's rules for sharing, disseminating, acquiring, standardizing, classifying,
and inventorying information" (Laudon & Laudon, 2015). For example, many companies make policy
statements available on the website. These policies do not necessarily state how long information will
be stored; time length of data storage should be clearly stated. As an example, visit Netflix,
https://www.netflix.com/PrivacyPolicy. Making policies publicly available increases consumer
confidence in "big business" operations and practices.

Another recommendation is the use of data warehouses and data marts. According to Horkoff,
et al (2014) “data residing in databases and data warehouses can be interpreted and understood in
business terms, thereby facilitating reasoning over strategic decisions" (p. 1016). It is important to point
out that data warehouses and data marts are somewhat limited depending on how the data is
structured and the quantity. For analysis of large quantities of data, the open software Hadoop is used.
Hadoop allows data to be spread over large clusters of commodity servers and processed in parallel,
therefore facilitating faster analysis of "big" data (Heath, N., 2013). Even though the Hadoop technology
is dynamic it still may not be enough for "big" data companies such as Facebook. According to Facebook
analytics Chief Ken Rudin, "the problem is that Hadoop is a technology, and big data isn't about
technology. Big data is about business needs” (Kanaracus, C., 2013). Business needs will determine
which business intelligence tools a company decides to use.
References

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https://www.apple.com/apple-pay/

BBC. (2015). Facebook opens up Internet.org amidst net neutrality row. Retrieved July 30, 2015

from BBC: http://www.bbc.com/news/technology-32580586

CNN. (2015). Apple: First U.S. company worth$700 billion. Retrieved August 1, 2015 form

CNN Money: http://money.cnn.com/2015/02/10/investing/apple-stock-high-700-billion/

Diallo, Amadou. (2014). Netflix singles out comcast in call for stronger net neutrality. Retrieved

July 30, 2015 from Forbes.com: http://www.forbes.com/sites/amadoudiallo/2014/03/20/netflix-

singles-out-comcast-in-call-for-stronger-net-neutrality/

Heath, N. (2013). Hadoop creator: 'Google is living a few years in the future and sending the

rest of us messages'. Retrieved on July 31, 2015 from Zdnet.com:

http://www.zdnet.com/article/hadoop-creator-google-is-living-a-few-years-in-the-future-and-

sending-the-rest-of-us-messages/

Horkoff, J., Barone, D., Jiang, L., Yu, E., Amyot, D., Borgida, A., & Mylopoulos, J. (2014).

Strategic business modeling: representation and reasoning. Software & Systems Modeling, 13(3),

1015-1041. doi:10.1007/s10270-012-0290-8

Kanaracus, C. (2013). Hadoop is not enough for 'big data', says Facebook analytics chief.

Retrieved on July 31, 2015 from PCWorld.com:

http://www.pcworld.com/article/2058900/hadoop-is-not-enough-for-big-data-says-facebook-

analytics-chief.html
Kepes, B. (2013). Open Source is Good And All, But Proprietary is Still Winning. Retrieved

August 1, 2015 from Forbes.com: http://www.forbes.com/sites/benkepes/2013/10/02/open-

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Business Model Controls Digital Content Through Legal and Technological Means. Journal Of

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Retrieved July 31, 2015 from Techcrunch.com: http://techcrunch.com/2007/11/05/breaking-

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amazon-the-next-threat-to-net-neutrality

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http://www.forbes.com/sites/timworstall/2014/07/15/why-google-facebook-the-internet-giants-

are-arguing-for-net-neutrality/