I can’t begin to tell you how many conversations I have had about Google with nearly every one of my firm’s clients. Many of our clients in the hardware business rely (depend) on either Google or Microsoft to get a product out the door. Many of our Wall St. clients are getting concerned over what Google’s next phase will be. I’ve been very vocal in articulating the conundrum Google is in. The un-wise write this analysis off, thinking the mighty Google is too dominant. But I’ve become convinced of something. Google will be dominant, but only during a phase of this industry’s cycle. In many ways, I believe we will look back in some number of years and see Google, like Microsoft, dominated only for a brief time.
I could write an extremely long analysis of how similar Google and Microsoft really are. But this discussion would better take place in a class room. However, at a fundamental level, the core relevant similarity is they both depend on other companies to take their products to market. There is a symbiotic dependency between Android hardware OEMs and Google in many of the same ways there is with Microsoft and PCs. Looking back, Microsoft, and their hardware partners, made PCs affordable. Thus, Microsoft was the default computing platform for the masses. Similarly, Android has standardized mobile computing as, across the planet, Android is the default platform. Both Microsoft and Android played a role in maturing the industry. But Microsoft missed the next phase due to their business model as well as the strong-arming of their partners during their growth phase. I believe the same fate will befall Google. Google has undoubtedly strong-armed their partners during their growth phase, and there is now more of a level of distrust and concern of depending too heavily on Google than I’ve ever seen before (it was bad before, but even worse now). But, ultimately, it is Google’s business model of “free but ad supported” I believe will cause them to play a minority role in the future.
Free but ad supported got us to where we are today. It played a role, but I’m not sure it plays a major role much longer. A great deal of this has to do with the experience. Meaning, it can get out of hand and intrusive if abused. While Google may not the abuser, they are not in complete control. Publishers layer ad unit after ad unit, interstitials at the beginning, middle, and end of an article, and cover sites with ads to the point they are painfully unusable. All because they need to make money and it gets harder every year doing so with a free but ad supported business model. Let’s look at a couple of data points.
First, I saw this chart on Twitter last night.
Consumers are getting so annoyed with overloaded ad unit websites that the number who are employing an ad blocker is actually growing. On this point, I recalled some quantitive data on this subject we acquired toward the end of last year on a project related to this very topic. Here are some global data points from the study:
North America
- I delete cookies so websites will not remember me – 82.3%
- I use services such as Adblock to stop websites from displaying ads when I visit them – 48.6%
- I use services such as DoNotTrackMe to stop companies from monitoring my internet activities – 29.9%
Europe
- I delete cookies so websites will not remember me – 71.4%
- I use services such as Adblock to stop websites from displaying ads when I visit them – 45.5%
- I use services such as DoNotTrackMe to stop companies from monitoring my internet activities – 24.9%
Asia Pacific
- I delete cookies so websites will not remember me – 75.6%
- I use services such as Adblock to stop websites from displaying ads when I visit them – 48.5%
- I use services such as DoNotTrackMe to stop companies from monitoring my internet activities – 40%
Latin America
- I delete cookies so websites will not remember me – 72.9%
- I use services such as Adblock to stop websites from displaying ads when I visit them – 44.2%
- I use services such as DoNotTrackMe to stop companies from monitoring my internet activities – 29.7
Middle East
- I delete cookies so websites will not remember me – 67.2%
- I use services such as Adblock to stop websites from displaying ads when I visit them – 42.1%
- I use services such as DoNotTrackMe to stop companies from monitoring my internet activities – 30%
The ad supported model is wreaking havoc on the user experience of the web. The rise in customers wanting to get away from a blood sucking experience is rising. And with more and more time being spent on mobile, publishers are likely to move their experience more toward apps. If web browsing via a web browser declines, this is not good for Google. If people end up spending more time in apps, this is not good for Google.
A few weeks ago, I wrote the main reason Microsoft’s dominance went from 97% share of computing platform share at its peak to 18% in 2014 was because Microsoft built growth on the back of an enterprise IT customer. This customer does not value user experience. This is why Apple came in and stole the consumer segment from Microsoft.
Similarly, Google’s customers are publishers not end users. This model, and this customer, who cares and values different things, was the right customer during the phase of the web’s growth. But I don’t believe it has as large of a role to play in the next phase of the internet.
Google can certainly adjust and maybe they can play more of a role than I believe they will right now. By focusing on who the true customer is, it sheds light on what a company is and isn’t oriented to do. From all the data I’m seeing on the next phase of the market, I’m increasingly convinced Google is not oriented well to maintain their dominant position with regards to the internet. I believe we will look back and observe their dominance was temporary, just like Microsoft’s, and in the future they are just one of many players.
I think you’re raising 2 issues:
1- Google’s relationship with OEMs. OEMs’ whining is a bit disingenuous: it’s been known for a while that Software pays more than commoditized Hardware, and Infrastructure and Services pay even more. (well, provided you’re successful). That’s the whole IBM-MS saga. The key point is, you’ve got to be good at it, which OEMs mostly aren’t: even their simple attempts at custom UIs are broadly despised by customers in and of themselves, and on top of that those delay OS updates.
I think it’s mostly a case of blaming someone else for their own faults: if they can, not even do better, but simply match, what Google is doing, let them use AOSP and add their own stuff, they can even probably wiggle a GMS package too, as long as they’re not too loud about it. Or they could use a whole different Ecosystem. Suddenly, the room goes as silent as many of Sony’s content stores and services recently did.
On top of that, Google are rather well-behaved: they use OEMs for their Nexus line, they let OEMs modify Android to an extent never seen in Windows (pen support, windowing, laptops, desktops, any bundled app/service… even now-GMS features such as multi-user and entreprise-level security started off as OEM proprietary features).
2- Advertising as a way to fund content. Can’t we make a very strong parallel with TV, radio/streaming, and print ? I’d argue Web, and even Apps, is “content”, just like TV, radio, magazines and newspapers. My best guess is that web & app ads are going away about the same way TV, radio and print ads are going away, which is… not at all. For today’s “radio”, streaming, several times more users choose ads over a monthly fee: 70m free vs 2.5m paid for Pandora in early 2013 it seems. that’s a 30:1 ratio (including the luxury iOS segment). In print, last decade’s main event was the rise of free dailies.
I don’t think the world is going to change. Hardware is a commodity, and OEMs are stuck with it because Software, Infrastructure and Services are a whole different skillset. Which they’re free to pursue if they’re not afraid of “letting go of the prey for a shadow”… but my long-term bet is on experienced, focused companies such as Lenovo that are able to thrive as simply OEMs. As for consumers preferring to pay for content than see ads, sure, some do and will. I think the better probability is ads getting better (more relevant, more pleasant, less disruptive) à la magazine ads.
Companies are effectively centrally planned economies, which is dangerous. Fortunately, they receive strong price signals from their customers, which allows them to direct their actions towards the things that are most worthwhile doing and are the most profitable.
The problem that Google has is that all their price signals are coming from advertisers rather than end-users. That means that if end-users grow dissatisfied with the quality of their product, Google will notice this quite late. (Microsoft had a similar issue because they were paid by Enterprise IT rather than the end-user.)
The same problem exists with Android because Google does not sell Android to OEMs and end-users. Being able to sell your product for money to another company is not trivial and can validate your hunches about whether or not you are on the right track. Giving the product away leaves you in the dark about the needs of OEMs and end-users, who you may, unknowingly, be antagonizing.
Finally, advertising is a zero-sum game that it usually commands about 2% of GDP (not much more not much less). If other companies come up with a superior advertising experience to Google’s then that will shift a larger slice to another party.
I think Google is trying to not dampen users’ signals by not focusing on lock-in the way Apple and MS do: AOSP, Google Takeout, the non-exclusivity of Google’s apps and OEMs’ ability to add features on Android are all distinctive features, that only exist in the Android/Google ecosystem, and that are specifically targeted at letting users out and getting early warning of issues.
When companies start to get into trouble, it’s tempting to blame their business models, their culture, their management and their products. What is often neglected however, is that these were the exact same things that made these companies wildly successful in the first place. For this very reason, I hard it very difficult to follow arguments that do not address both sides of the coin simultaneously.
Advertising has problems, but the Adwords advertisement model is also what freed us from banner clutter on search results 15 years ago. It also gave us the “free”Internet. You can argue that the ad model won’t work for the next phase of the Internet and I would agree. However, because it was also their reason for success, I don’t think that focusing on the negative side of advertising is really getting us closer to the real problem that Google has had.
Instead, what we have to accept is that everything in tech will be turned on its head with a 15-, 20-year cycle. Change is the only constant. Hence the problem with Google is not the Ad model. It is that Google itself has not changed.
20-years after being founded, Apple almost went bankrupt because the Windows-OEM distribution model dominated. Then Microsoft found itself in trouble 15-years after that as it failed to capitalise on the shift towards smaller and mobile devices, enabled by Moore’s law. Google similarly is finding itself in trouble after 15-years of dominance because it cannot adopt its revenue engine to mobile-first (technology-wise, it has embraced mobile-first but business-wise, it hasn’t).
In the case of Google, I think the warning was that it was milking search too long. Although technology-wise, it came up with good mobile products, it failed to come up with a business model that would work on mobile. They assumed that their advertising model would last forever and be relevant everywhere.
So really, the demise of PC-centric advertising as the driver of the Internet after 15-, 20-years of dominance is totally expected. It’s not something that is specific to advertising. Any technology, even from Apple, would see a similar life-cycle. The problem is that Google hasn’t come up with something new.
@Naofumi
i completely agree with what you said except that i would have end it with The problem is that Google hasn’t come up with something new yet that we are aware of or maybe all of these analysis who are chanting the Google peak jambaya are simply off guard
Yes, if Google creates a new business that has the potential to be big, and suits the current trend towards mobile, then I’m sure that they will be fine.
I even think that an Ad-based business will be OK, because despite its inherent annoyance, it’s actually what’s driving Facebook, Twitter, etc.
Good advertising that exists within the content stream will work pretty well I think. The key is to stick to a kind of one ad per page/screen, almost a sponsorship model that goes back to the 50s. 5by5 does this concept well. The mistake I see in a lot of ad-based sites and services is ads friggin’ everywhere, crammed in to every available spot. Trickery should not be a business model. Also, pay per click has to go away. I suppose in some cases it makes sense, but I wouldn’t do it, per click (or impressions) is a race to the bottom, in many ways. A flat fair rate per ad per spot is better, there’s value just in being viewed, and if the ad is done well and is presented within the flow of the actual content, it will be viewed.
Now you understand why Apple’s Ad Business in with a captive audience isn’t doing so well. Although Pay per Click is here to stay. But the reasons it’s only successful on Google’s Adwords, is altogether different. It revolves around giving your audience fewer and better highly targeted Ads. By knowing what they are actually looking for, well before they go looking for it!
Yes, without that ad revenue Apple is surely doomed. You’ve really hit on something there I think.
Why yes…. without that #1 BrandZ Ranking Only Google has had 3 yrs in a row, I suppose you’re right. They are most definitely in decline! ;-P http://www.forbes.com/sites/jenniferrooney/2014/05/20/google-beats-apple-as-brandz-most-valuable-global-brand/
Together with Samsung Electronics Division alone moving up, instead of down on the BrandZ Ranking. While also now two places ahead of Apple on Fortune Global 500;
http://fortune.com/global500/samsung-electronics-13/
I’d also like to point out that although Apple was able to grab that one single iF Award from last year’s model iPhone 6, Samsung Topped the list of with far greater iF Design Awards Excellence… handed out this year…. again, by 3 times:
http://www.ifdesign.de/ranking_tabellen_d
Now for the really… really… really….. good news for people who understand that Apple is not only ripping their customers off, but ripping the rest of Global Tax payers off too:
http://www.bbc.com/news/business-31944211
So although you may scoff at your own arrogant flippant remark, I don’t think the rest of the world are laughing about having to make up for Apple’s own Greedy Elitist Club Arrogance, over Scamming not only all you iDiots, ripping off all us normal people’s taxes in place of paying their own, very much longer.
The fact is, just as Ireland promised last September, they will now be forcing Apple to declare a State of Residency of Tax Purposes. Which means….. since I’m sure you failed 3rd grade…. with your illiterate and ignorant “Maffz Skills”! ;-P
So…. in effect for the sum total of 70% of their Global iP…. sales (I mean iTrinket sales being illegally funnelled into Ireland as Software Sales. To avoid taxes being determined as illegal State Aid) inside Ireland, you may be more right than you know! 😀
Oh and be sure to respond with relevant commenting and not just gloating on & on about your Applewellian Pride in non-relevant Sycophantic Expletives announcing over and over again what Apple’s Market Cap Value is now. Which if you were really aware, have declined over the last Month by $20 Billion! And anyone with a brain of their own, realizes Market Cap only pertains to Publicly Held Companies. Not PRIVATELY Held Global Conglomerates…… like that held by the Lee Family’s Global Empire in Samsung Group and Everland Holding. Which also owns majority (controlling shares) of Samsung Electronics! ^_*
I think we’re in agreement, everyone *is* laughing.
Only in your Wildest Applewellian RDF’d FUD’d Up DREAMS!!! lol….
Let me know when all of Apple leaps ahead of just Samsung Electronics on Fortune’s Global 500. Meaning as a purely outsourced business model, that actually depends on many other companies, besides Samsung Electronics, inside their Massively more powerful Samsung Group, with all your beloved publicly held by Wall Streets Braggadocious Zealots….. all getting rich off fools…. like YOU!!! ^_*
btw…. learn the difference between Publicly Held by Share Holders and Privately Held by a Family of Companies. Then you might actually understand the Super iZealots on Wall Street are so happy, when you fools don’t miss the key qualifier in “World’s Most Valuable (Publicly Owned) Company” being Apple. But then again…. like with the The Gold Edition Apple Watch…. the only people buying it will be those that get off on broadcasting their wealth. Like Pimps, Bling Whores and Religious iCult of the Mac Super Fans!
I’ve been friends with the really wealthy, who don’t need to flaunt the Wealth. Look at your own Saint Steve Jobs….. or is that Tim Crook Now? Steve Jobs himself…. never wore any jewelry and especially WATCHES. Since he himself starred in his FDR Commercial Spot. And never wore one in any WWDC conference. On the launch of iPhone, he even said iPhones will take the place of your WATCHES!!! ;-P ……but you’ll just deny that and laugh at just how smart and visionary he really was. When everything goes around in circles and Samsung’s phones (even Phablets) start getting really small and foldable…. end of this year!!!
You’re fun. Did I mention that my family owns a fair bit of Apple stock? Should I sell now or hold? Sounds like I should sell before Apple goes down the drain, or rather before they *fold*.
Oh… did I tell you I’ve owned Apple stock and my family works and worked for Apple? Yeah….. one was a numbered employee hired by Steve Jobs straight out of a Silicon Valley University. Where she graduated Summa Cum Laude in Marketing. Worked for Apple from 1982 through 1992.
Then she opened up her own Consulting Firm in Los Altos. You know right there in Silicon Valley, next to Mountain View and Cupertino. Her Clients included Warner Brothers, Microsoft and many… many… others. She owns many businesses now and is still invested in Apple. Like many other members of my family besides me. Well until I sold them just over under a month ago, after Samsung introduced S6 and Edge. When I attended a Samsung Fashion Industry event in Paris! 😀 ….since I wanted to pick up a new Galaxy Men’s suit. Which celebrated it’s 30th Anniversary in 2012/2013!
Any way she still does some work for Apple, while having switched to using Android phones for her entire family. Somewhat because her husband had worked for Motorola in an acquisition, that brought them Moto360 smartwatch design team. The sale was contingent on them being hired into Google, if Motorola was sold. Which it was to Lenovo! …..so I’ll let you know, when she sells her Apple shares! ;-P
With Apple watch headed for a complete flop against a Fashion Industry and Luxury Market Heavyweight in Samsung Cheil Industries, now in Samsung SDI! lol….
Who in owning their own Luxury Hotel chain carry the most expensive designer brands in their stores. While already teamed up with many Luxury Jewelry and Watch Designers on Orbis Smart Modular watches coming this fall! haha…. Let’s see if you’re still laughing then!!! haha…
I imagine ten years from now I’ll be looking back at this wishing I had listened to the great and wise iKrontologist. Why oh why didn’t I dump all my Apple stock? Why oh why didn’t I buy and horde all those incredibly valuable luxury goods from Samsung? The horror! The horror!
Wow….. I thought you were a Space Cadet before, but here you are talking to yourself and now I’m really feeling sorry for you! 🙁
You really need to take your meds. Though, I know there just isn’t a real cure for your kind of arrogant ignorant Appleholism, except DEATH. Go get yourself fitted for a Galaxy suit to be buried in, before the little green iKrontologists you’re seeing (that aren’t really there), come back inside your f….’d up head!
Oh….. and they call the mental illness you’re suffering from, Steve Jobs Disease now. Don’t worry…. the Thermonuclear Weapons you think you have really aren’t there and the money you think you have isn’t either. You see he thought everyone was out for him too. But apparently he didn’t get any of those truck loads of nickels and it’s not looking like Apple or you will ever get them either.
The words for it are; True Applewellian iDiocy, complicated by delusional megalomania. See ya…. wouldn’t want to be ya! ^_*
You’re an interesting case study, to be sure. I don’t think I’ve actually seen anyone so upset by Apple’s success. By the way, I don’t have any thermonuclear weapons. I’m a gorilla from space, I have laser cannons of course.
I guess you’re only reading the cherry …..errr Apple picked reviews on iWatch…. I mean Watch! lol… Dude? ….ain’t looking too good for the success and Wall Street will be reflecting what people are finding is true. Battery life is severely wanting, inconsistent, and the reviewers say they prefer cradles to that thing that gets disconnected far too easily.
9 to 5 Mac has nice things to say about it….. sort of: http://9to5mac.com/2015/04/08/fifteen-new-user-experience-details-revealed-in-early-apple-watch-reviews/comment-page-1/#comment-252832
The interface is way too complicated for Apple fans to figure out. The learning curve too steep and oh….. the laggggg is ridiculous. BT connections come n go and I could go on, but I don’t want to get you too upset, before find out Wall Street going punish Apple for releasing a device not ready for prime time! 😀 ….but don’t sell your shares just yet, my cousin is still hanging on till at least the 20th! ;-P pssst…. don’t sell Apple shares ever. It’s iDiots like you that deserve to go down with the ship of fools!
I’m sure you’re right, the Apple Watch will be a miserable failure. I mean, come on, the first iPhone had lots of problems and missing features, which ultimately led to its demise. It’s so obvious. Thanks for the insight.
When your $60+ Million Dollar a Marketing Pro poached from Burberry dumps $7 Million in Apple shares now of all times to be doing so, something’s very wrong in Cupertino’s Apple Watch Launch!
When they have absolutely no watches in stock, but yet start pre orders only online, then how are they going to claim Millions Sold already sold and delivered? lol… Oh…. yeah… that’s why they have mostly sold to employees at half price with the difference simply written off, still making them full price sales! ;-P Can’t wait for the lame claims to have SOLD 10 Million Apple Watches, when nobody will even have them to wear in the first place for up to months later!!! haha….
Of course you’re right, Angela Ahrendts has known the Apple Watch would bring Apple down since last November when she filed a pre-planned schedule of stock sales with the SEC. I can’t help but come around to your way of thinking, you’ve really nailed it, no matter how much Apple succeeds, Apple is not succeeding. I see it clearly now. Thank you.
Only difference Facebook and Twitter don’t own the largest databases in the World and they rely solely on tons of annoying Mud Ads up against the Wall to see what sticks. The Ad companies that are keeping them alive, won’t continue to do so forever.
Google provides highly targeted Ad placement and that’s why they are able to get such massive Ad revenue in the first place. Whereas Facebook in particular rely totally on Ads within their own userbase to make their living off of. On top of this one key aspect of their business being a closed network, what people don’t realize (and they are never going to tell us this), they don’t anonymise our personal information before feeding it to advertisers.
Along with this glaring fact; the migration off of Facebook actually began years ago. It includes the fact that half their so called membership is composed of clone accounts, multiple same users accounts and all those bogus Friends Train Multipliers. Just a few years ago, people were joining up with multiple email accounts. So they could play games and supposedly get their friends (most of the time multiple logins of their own) to plant their crops and feed their zoo animals.
No way is this even close to true Pigeon Computing Power. Where the pigeons are Free to come and leave easily, taking all their personal information with them. If the pigeons feel threatened by the fact sites like Facebook rely on keeping you locked in FOREVER, without the ability to simply leave (like with Google+), then they will be reluctant to fly in to the Trap, where it’s inevitably hard to leave. Right now…. Facebook probably has less than half their membership being actual real people.
And most of the ones that are, aren’t feeding off all the junk ads, that can’t be nearly as highly targeted as Adwords! ….I’ve been off Facebook for awhile and I certainly don’t miss it. Each time I go there…. I get the feeling I’m about to get FB raped for my personal information. I’ve already closed out about a dozen accounts used for gaming, I’m no longer interested in playing. Now with Real Name membership required, they’re even stopping Native Americans from joining, because it can’t discern the difference between Raining Cloud Water and Shining Sun Morning as being Real People!!! …..so it’s time for the Flying Eagles to split the FB Nest!!! ^_*
I disagree entirely with this article, but somewhat less with you. What’s missing is the fact that Google owns some key technology patents to go with their Pigeon Computing Philosophy. As long as they still use this all in their own business model, Google Search will remain it’s main money maker. At least as long as they have exclusive use of PageRank from Stanford University. Which they have a license to use it in “Perpetuity” (forever)!
http://www.whydomath.org/node/google/math.html
“As long as there are Pigeons Pigging Out in Parks, Google will be dominating the Web…. with Pigeon Computing.” This is perhaps the greatest reason Google will continue to thrive in “To Infinity and Beyond”!!! ……it’s all about their Math Skills!
https://www.academia.edu/2495800/Secret_Behind_Googles_Success_Must_Read_Project_Report_
With it…. only they can give you results, that are actually keyed to what you’re actually looking for and it’s only going to get better with their massive data base, growing larger by the second. That’s why they remain and will remain…. the dominant Search Provider and therefore the Dominant Ad Revenue Generation company the World. Even over Apple’s Ad business, that generates far more impressions, but no real income to challenge Google’s Dominant PageRank Fueled Pigeon Computing Revenue Model.
YouTube? Lest we forget about the fact, they had no revenue model and that’s why they were sure to fail. If…. Google hadn’t bought them. Now YouTube is making ordinary people Rich & Famous off their YouTube Channels. They attract Top Advertising Revenue and are now poised to challenge every online, as well as offline content provider. Including major Advertising and marketing networks, cable companies and other Video sites, just can’t make it against Google’s Pigeon Computing Concepts. Try as they may….. they will never be a challenge, without a way to make money, by knowing the real numbers and how to just allow them to multiply on their own.
YouTube is the new iTunes Store Model for Video and Music. Only with both streamed and downloadable for offline viewing pay for content. That’s why Apple would be foolish to drop YouTube. Witch I’m sure would be a huge mistake. With Google already fully prepared to move into coming W3C’s HTML 5 content and application provider business model. While companies like Apple have nothing like it and will continue to depend on their proprietary garden walls to hold their unwitting consumers under their control! …..a model sure to fail, as we move directly into a more Open Cross Platform model, better suited for the coming era of Web Based Cloud Computing with W3C HTML 5 as it’s Thermonuclear Fuel Rod!!!
PageRank is why they were so successful to begin with and it’s why they will remain successful as long as they can continue to use it into perpetuity! …..funny how Google’s… Larry Page’s Genius…. owns the web, still today fueled Pigeons continuing to Multiply. Google by knowing the where the heart of the NUMBERS GAME REALLY COMES FROM! ….It’s All About Their Skills and having all us Pigeons Multiplying Naturally for Them!!!
I agree that Google still owns the most powerful search engine in the world, and will continue to do so for the foreseeable future. That is not the issue.
The issue is that the Google style of advertising (AdWords and AdSense) will no longer be the dominant ad format. Ad spending will shift to different formats.
What I’m saying is that if you look at a 15-, 20-year lifecycle, the market will move to a new category of product (or business model). The incumbent company might still have the best product in their category. This becomes less relevant however as the new category overtakes the old.
Likewise, it is reasonable to assume that Internet advertising will shift to a different Ad format, maybe a more native format similar to what Facebook and Twitter are offering. If this happens, then having the best search engine won’t save you. You will have to adapt to the demands of the mobile market.
If you look at Google’s revenues, they are still growing and they are still much, much larger than Facebook’s. They still have strong assets like their brand as you mention. It’s very hard to convincingly say that they have peaked, simply because the evidence still isn’t there. Data suggesting that customers are getting fed up with advertising isn’t really strong enough to suggest Google’s downfall.
But then, you could also have made a similar case for Microsoft in the last decade.
The way I think is that if you keep looking at micro-level trends, you will not be able to see the macro trends. If you look at technology, product, market position, etc, these are the micro-level trends that can dramatically change within a decade or even a few years. To be able to look at a longer scale, at a 20, 30 year scale, the only thing that seems to matter is the ability to change.
Google has not yet proven that it can do that. It has moved a lot of its technology to mobile, but it still hasn’t changed its revenue source.
Hopefully Ads never move to a more Facebook or Twitter revenue model. It would be a disaster on the far more open web. Besides the fact that both their internal search engines suck massively!
With a far more Open Web on the way, users will always navigate to the Search model that feeds them the most relevant data. Whereas Advertisers will always navigate to those online sites, who give them greatest exposure to the people who are most likely to buy their products. With the largest databases in the World to provide relevant search and the greatest multimedia content, with the widest assortment of content providers and user traffic (Maps, YouTube, Google+ w/ Take Out and Hangouts, Google with always be far ahead of the contentless databaseless Web Site pack!
Here’s Facebook trying to get away from YouTube, with a crippled Multimedia mix of their own, that is so 90’s Dial Up like…. it’s pathetic!
Then you have what….. on Twitter’s Vines short clips? Flash in the pan success, with only real content also linked to YouTube. Again… Google with YouTube still gets the hits. Usually because their channels simply repackage Vines into longer content. While FB users now simply click the YouTube links rather than watching a corrupt, slow stream on pages that are getting as loaded up with Ads, as MySpace did before it took a dive!
I never watch FB’s own uploaded video content on Facebook, precisely because I can’t stand scrolling forever, to view what I went there for in the place. But…. especially the extremely poor quality of pictures (better viewed on Google+) or crappy slow frame rate low res videos. Especially linked to external spam sites, you’re inclined to find there.
ADs on both Twitter and Facebook are near always not relevant and sometimes end up getting you scammed. So I simply won’t click on them…. ever!!! ……hence they get the automatic View income builtin, but no ad clicks from me means no hits income for them. Make ’em more relevant…. and that could change. But I don’t see that ever happening. Twitter is lucky to see me log in 6 times a year these days and I’m always on the bleeding edge of technology, before the masses even arrive!
If Google had managed to transform YouTube into a massively profitable business that generates significant cash for them, then I would agree with you. However, YouTube does not seem to be generating much profits.
http://www.digitaltrends.com/web/youtube-a-billion-users-and-still-no-profit/
Google still relies predominantly on its 14-year old AdWords for profit, and that’s the problem.
Where do you think they earn their Adsense revenue from? You can twist the truth up all you want with bogus Applewellian FUD and Doublethink, but in the end Google still makes most of their money off iPhone and iPad users watching YouTube and using Google Services like Maps and Search with Adwords PWN’ing the Web’s Ad revenue! ;-P
Reportedly, YouTube has been helping Google grow revenue, but not much in terms of profits. Most of their profits still come from search ads (Adwords).
As for Adsense, this has been flat for the last couple of years. This is based on hard data that Google reports in ther financials.
http://blog.pagefair.com/2014/adsense-smoking-gun/
Sorry I didn’t get this link posted up properly on April 1st! 😀
http://www.google.com/technology/pigeonrank.html
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