Google reported revenues of $6.77 billion for the quarter ended March 31, 2010, an increase of 23% compared to the first quarter of 2009. What does that mean? $515 Million a week or $73 million per day - every day including Sunday!!
So where does this river of money come from? Search mainly, yes, those people out there that are buying Google Adwords, you have contributed to this extraordinary river of gold that Google now experiences. A massive increase from last year and quite extraordinary when you consider that about 5 years ago it turned over a measley $500 million a quarter and about 9 years ago it turned over ZIP.
Has YouTube contributed? Most certainly. In fact, just last week, Google reported that YouTube was serving up TWO BILLION videos... PER DAY! That's 60 BILLION videos per month on average, meaning a few things... YouTube impression advertising works, and their cost of serving this data-hungry service would most certainly be offset (it would be in the millions per month).
So is it's model under threat? Yes and No.
It certainly has a lot of legs left yet and with a market cap of $157 Billion and a war chest of money to rival small countries (or at least Greece & Portugal's), it can certainly move and change it's model over time to react to the market and technology. With a price earnings ratio of an outstanding 22.5, the market clearly thinks the Google's dream run is a long way from over, but move and change it has to at the moment. Adwords (or search) is under threat from Facebook and to a lesser extent Twitter and Social Media generally.
Video sharing sites like Hulu and Funny Or Die are gaining followers fast, Google's Blogger is easily outshone in looks and popularity by the likes of Tumblr and Wordpress. Alternative Search Engines like Wowd and Topsy are powering their results by human web activity, not the Google Algorithm.
Who would have thought that within a very short period of time, Google could go from an unshakable juggernaut to being in direct firing line from the very developments it helped to grow (through search, that is), finding itself having to change its operations almost daily to remain relevant and current in line with digital demands.
What we're seeing is the 'Microsoftisation' of Google. Microsoft's dominance not that long ago put it on the firing line, with everyone like Apple and Google successfully eating into their market. Now, as Microsoft again establishes itself as an underdog, and teaming up with Facebook, it seeks to assert itself as a worthy contender from the number one spot.
Competition was never bad - but the struggle between these behemoths will most certainly be exciting. Now is a better time than ever to look to non-Google markets and establish a presence there for your business.
If you would like to make your business future-proof, we can help: http://www.strongmandigital.com.au/contact-us/
Until Next Time,
Tomer Garzberg
http://www.strongmandigital.com.au/2010/05/21/google-announces-first-quarter-2010-results/
(Thanks to Michael Renton, CPA, for providing the hard data and number crunching)
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