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Peak Google: The Company's Time At the Top May Be Nearing Its End
HughPickens.com writes Farhad Manjoo writes at the NYT that at first glance Google looks plenty healthy, but growth in Google's primary business, search advertising, has flattened out at about 20 percent a year for the last few years. Although Google has spent considerable resources inventing technologies for the future, it has failed to turn many of its innovations into new moneymakers. According to Manjoo, as smartphones eclipse laptop and desktop computers to become the planet's most important computing devices, the digital ad business is rapidly changing and Facebook, Google's archrival for advertising dollars, has been quick to profit from the shift. Here's why: The advertising business is split, roughly, into two. On one side are direct-response ads meant to induce an immediate purchase: Think classifieds, the Yellow Pages, catalogs or Google's own text-based ads running alongside its search results. But the bulk of the ad industry is devoted to something called brand ads, the ads you see on television and print magazines that work on your emotions in the belief that, in time, your dollars will follow. "Google doesn't create immersive experiences that you get lost in," says Ben Thompson. "Google creates transactional services. You go to Google to search, or for maps, or with something else in mind. And those are the types of ads they have. But brand advertising isn't about that kind of destination. It's about an experience." According to Thompson the future of online advertising looks increasingly like the business of television and is likely to be dominated by services like Facebook, Snapchat or Pinterest that keep people engaged for long periods of time and whose ads are proving to be massively more effective and engaging than banner advertisements.
In less than five years, Facebook has also built an enviable ad-technology infrastructure, a huge sales team that aims to persuade marketers of the benefits of Facebook ads over TV ads, and new ways for brands to measure how well their ads are doing. These efforts have paid off quickly: In 2014 Facebook sold $11.5 billion in ads, up 65 percent over 2013. Google will still make a lot of money if it doesn't dominate online ads the way it does now. But it will need to find other businesses to keep growing. This is why Google is spending on projects like a self-driving car, Google Glass, fiber-optic lines in American cities, space exploration, and other audacious innovations that have a slim chance of succeeding but might revolutionize the world if they do. But the far-out projects remind Thompson of Microsoft, which has also invested heavily in research and development, and has seen little return on its investments. "To me the Microsoft comparison can't be more clear. This is the price of being so successful — what you're seeing is that when a company becomes dominant, its dominance precludes it from dominating the next thing. It's almost like a natural law of business."
In less than five years, Facebook has also built an enviable ad-technology infrastructure, a huge sales team that aims to persuade marketers of the benefits of Facebook ads over TV ads, and new ways for brands to measure how well their ads are doing. These efforts have paid off quickly: In 2014 Facebook sold $11.5 billion in ads, up 65 percent over 2013. Google will still make a lot of money if it doesn't dominate online ads the way it does now. But it will need to find other businesses to keep growing. This is why Google is spending on projects like a self-driving car, Google Glass, fiber-optic lines in American cities, space exploration, and other audacious innovations that have a slim chance of succeeding but might revolutionize the world if they do. But the far-out projects remind Thompson of Microsoft, which has also invested heavily in research and development, and has seen little return on its investments. "To me the Microsoft comparison can't be more clear. This is the price of being so successful — what you're seeing is that when a company becomes dominant, its dominance precludes it from dominating the next thing. It's almost like a natural law of business."
agreed, ddg is my default as well. i also like the bangs feature, so I can type into my browser's search bar "alexander hamilton !w" and it takes me immediately to the wikipedia page for alexander hamilton without needing to deal with any annoying click throughs.
One of the big things they did wrong was kill binary compatibility for software running on XP at the same time they killed XP.
Wait, what? Microsoft hasn't done this. Most XP software works fine on later windows. It's the earlier software which doesn't work well. Some games (Civ2, egads!) won't run even in XP Mode. I presume some actual business programs are the same. Game developers may be more likely to do wacky things to the machine, but they don't have a monopoly on it — especially when it comes to the inept copy protection schemes that you often see in commercial software. But most of the software I've been using since Windows 2000 still works just fine on Windows 7, for example.
Totally ignoring the fact that for all middleware-based vertical market software (which is, in effect, "all of it", mostly written in dialects of VB to glue a bunch of Microsoft and third party DLLs together) it's an added "rewrite everything from scratch" overhead, it ignores buying cycle.
But I have stuff like that running on my Windows 7 amd64 system on a regular basis. WTF are you on about?
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
People must or Bayer, Excedrin, Motrin, or Tylenol wouldn't exist. There is literally the exact same pills with a different name right next to them at a lot lower price.
Yes it's an anecdote! Were you expecting original research in a Slashdot comment?
Are you sure you know what exponential means? The simplest exponential equation has the form:
f(t) = a^t
The critical feature is that the functional variable (t) is in the exponential term.
The formula for annual growth rate, whether it's advertising revenue, interest, an economy or population is:
f(t) = x_0 (1 + r)^t where r is the growth rate. For 20% annual growth r = 0.2. The equation is most definitely exponential. Note also that expecting 6% / year growth, 1% / year growth or even 0.1 % / year growth is also exponential. Ask a biologist or physicist sometime whether exponential growth can last forever.
Show me a company that _only_ reports financial data every T=100 years and I'll bow to your wisdom. Companies report annually, all of them. They are required to do so in fact, so using the Government mandated "T=1" the term "exponential" is absolutely false.
Ok, I'm genuinely curious, how does that have anything to do with it?
If you start with a company revenue of 100 at T=0 then:
1) In additive growth: T0=100, T1=120, T2=140, T3=160
2) In exponential growth: T0=100, T1=120, T2=144, T3=1.728
Merely reporting at intervals of T(n) where n=1 per year doesn't turn #2 into #1. According to their latest 10-K filing their revenue for the last three years was (in millions):
2012 46,039
2013 55,519
2014 66,001
Which is an exponential growth rate of 19.73%, so close enough to 20% for conversational purposes.
If
.2)^x
.2)) * x]
Rx = revenue in year x
R0 = revenue in base year (year 0)
then 20% growth means: Rx = R0 * (1 +
represented as:
Rx = R0 * exp[(log(base e)(1 +
Which is exponential growth as seen at Wolfram where lambda = log(base e)(1.2) (and every mathematician I have ever known). Not sure what you mean when you say exponential growth, but it's not the mathematical definition.
Your soap box is quite misinformed.