In partnership with Glassdoor, our investment analysts are taking a closer look at some of the most popular companies in Glassdoor's career community.
In today's business textbooks, Google (NASDAQ:GOOG) is frequently cited as a prime example of a new breed of highly ethical companies taking unprecedented measures to redefine social responsibility. In fact, it wouldn't be a far cry to argue that the online search giant is, overall, one of America's best companies. An assessment of how Google concerns itself from the perspective of key stakeholders, particularly employees, customers, investors, and the larger world, clearly shows why Google is a first-rate company.
Setting the standard for corporate culture
Google sets big, audacious goals. Sometimes the goals are related to the company's core search business, and other times they are related to Google's wild "moonshot" projects that fall under the company's extracurricular business, Google X, home to projects like Google's autonomous cars and an attempt to build a $50 smartphone with Project Ara.
This type of work requires a very unique corporate culture -- a culture that fosters innovation and attracts independent thinkers. Fortunately, Google doesn't struggle to inspire this sort of culture.
Google boasts a 4.4 stars out of a possible 5 rating on GlassDoor.com, based on 2,450 employee reviews. This rating is based on five factors: culture and values, work-life balance, senior management, compensation and benefits, and career opportunities. Google's lowest score (3.8) is in career opportunities and its highest (4.4) is in culture and values. From its free supply of food at its 15-plus cafes on Google's main campus to compensation and benefits that Google employees rate 37.4% above average at Glassdoor, Google seems willing to do whatever it takes to attract and keep talent.
Other items related to Google's exceptional corporate culture worth noting:
- Employees gave Larry Page an impressive 96% approval rating by as CEO at Glassdoor.
- Fortune Magazine and the Great Place to Work Institute dubbed Google the "2014 Best Company to Work For." This was Google's fifth time on the list.
Improving customer lives
The majority of Google's revenue comes from advertising. While the business of making money on user data is sometimes viewed as invasive, the collection of free services that Google provides using the funds earned from advertising revenue is unquestionably useful to end users. And if users were forced to decide between free Google Search, Gmail, YouTube, Maps, Chrome, and Android along with the ads we know today, versus these same Internet products along with feeds instead of ads, there's little doubt users would strongly favor Google's current advertising business model.
It goes without saying that Google's suite of Internet services plays a crucial role in improving lives for users. Just imagine a world without Google search. Further, thanks to Google's effective advertising business model, which helps the company rake in more digital advertising revenue than any other company in the world, the search giant is able to not only improve its existing core offerings for customers but also continually place bold long-term bets on new technologies.
A lasting competitive advantage will reward shareholders
"Google has a huge new moat. In fact, we've probably never seen such a wide moat," said Warren Buffett's partner Charlie Munger in 2009. Those are powerful words coming from one of the world's greatest investors. Indeed, it's Google's moat, and management's proven ability to continue to reinforce this moat, that has made Google such a great long-term investment.
An economic moat, referencing the moat around a castle built to keep enemies at bay, simply refers to a company's sustainable competitive advantages. The "deeper" and "wider" this moat, the easier it is for a company to protect its profits.
Google's moat is mainly sourced from the impressive scale of its advertising reach. With a dominant 65% plus share of search traffic in the U.S., Google not only has more comprehensive data on users than competitors, but its costs are spread across a larger number of marketers, making Google's ad network pricing very competitive. Plus, where better to advertise than where users are specifically searching for products and services directly related to a marketer's offering? Online search advertising not only offers reach for marketers, but it helps marketers tap into a highly targeted demographic.
Google is always refining it core products to stay ahead of peers. Most importantly, Google bends over backward to build increasingly compelling value propositions for marketers. And management has proven that it can fluidly and rapidly leap into new mediums for building marketer value: consider how Google's acquisition of YouTube in 2006 has panned out or the prompt proliferation of Android that helped Google solidify its place in mobile.
Overall, Google management performs expertly at building shareholder value -- and this trend looks poised to continue.
Google wants to change the world
"It's a tragedy that with so much information available today, two-thirds of the world's population lack even the most basic Internet connection," Google CEO and co-founder Larry Page said in the company's 2013 Founders' Letter. But the company isn't just complaining, it's taking action. In June 2013, Google launched project Loon, one of the company's latest "moonshots" aimed to provide balloon-powered Internet access to rural, remote, and underserved areas. And earlier this year when Google agreed to buy Titan Aerospace, project Loon's tools to deliver Internet access to the rest of the world expanded beyond balloons to long-lasting autonomous high-altitude solar-powered drones.
The potential impact a fully connected globe could have on overall humanity is difficult to measure -- but few would dare to argue that the impact wouldn't be enormous. Bringing the power of connection to more and more people, Page says, will create opportunities that none of us have yet imagined.
Google also thrives in philanthropy. In June 2013, for example, 8,500 Google employees from 75-plus offices participated in GoogleServe, the company's annual global week of service. Further, Google donates $50 for every five hours an employee volunteers.
And when it comes to Google's environmental efforts, Google is always aiming to improve. Among the greenest of cloud Internet brands, Google has a carbon neutral footprint.
In its interactions with employees, customers, investors, and the world at large, Google is setting the bar high. Treating these key stakeholders exceptionally has earned the company important rapport with current and prospective Google stakeholders, and proven that Google is willing to go above and beyond. Best of all, as one of America's greatest innovators in social responsibility today, stakeholders can expect Google to continue to push the limits.
Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.