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Google’s Rough Future
21st January, 2015

To all my clients be aware – this blog is aimed directly to you more than anyone else, so here’s some plain English tit bits for you.

Google may be on the wane – for the first time ever it lost market share in the USA where it’s always been in the 70%ish region.  Bing and other search engines have made far more in roads into Google’s Search in the USA because unlike here in the EU, when you get a new computer it is automatically loaded to default to Bing.

Here in Europe following some Anti-Trust cases Microsoft was forced to load an extra start up choice so that when people brought a new computer they were given options about using Firefox, Chrome or Internet Explorer – as you can imagine a lot of people switched to Google and that has given Google a significant boost in the EU.  Google now boasts about 96% market share of Search.  We in the UK Google pretty much everything.

But, then along comes Mobile – and sure the main two mobile types are Apple (IOS) and Google (Android) – Google knew this was coming and have done everything they can to benefit from it.  However the upsetting piece of information for Google is that people are searching for less. They prefer to play their games on this mobiles rather than look for things.

Now let’s look at Google monster revenues – 5Billion a quarter – it’s a massive ‘cash cow’ – but 90% of that is driven by Google’s Adwords Advertising system – you place you Advert in your words, selecting your chosen keywords and set at a price you’re willing to pay. It’s a very powerful proposition for advertisers, the only really danger is if someone else advertises on the same keywords as you.

However, with around half of all time spent on the Internet is via a Mobile phone – and as the ‘Internet’ isn’t quite so cool on a Mobile, people are searching differently, fewer people are finding those Adverts and Google despite giving you Android for free is actually collecting less revenues.

An additional factor is that Google charges slightly more to advertise on a Mobile – thus many advertisers are ignoring Mobile (fewer returns anyway) and concentrating on Desktop.

You can begin to see Google’s worries… as more and more of us turn to Mobile instead of the Internet so Google’s revenues will slow down.  And more worries are on the way, for Google, as advertisers realise their customers are all on their Mobiles they will look to ways to get the adverts on a Mobile and here enters Facebook.  Around 50% of all time spent on the internet on Mobiles is spent on the Facebook App, that is something that may increase with time.

There isn’t really a solution here – Google’s revenue are forecast to stall or reduce – but what is revealing and on huge interest is that now we are starting to understand why Google is investing in Wearable Tech like Google Glass, Driverless Cars, High Speed Internet into people homes and all the other super cool things they do.

They know at Google headquarters that they are on borrowed time with their current Advertising model.

Caveat – Google Glass has been closed down on the grounds that it was too ‘uncool’, you can see just how sensitive Google is to a product that can be described as ‘uncool’.  It’s a small word that could potential destroy a massive company like Google very very quickly.

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  1. […] We wrote about possible Google worries over the future of Mobile and their Adwords Revenues back in January last […]