Google fans over here might consider this as a stupid statement/question. Even for others, it’s hard to accept that Google is jumping the shark. You can pose a lot of facts to offend this statement. But let’s discuss on the fact which makes Google weaker from sustaining in its supremacy.
From this generation’s common man’s perspective, Google is the best known “Tech Giant”. We can’t deny that it owns Google Search which is widely used search engine, Android which is currently the best mobile operating system, Google Chrome arguably the best web browser, You Tube the most popular video website , Google Maps the most popular interactive maps. And it’s projects like Project Loon, Google Glass, Google driverless car, Google cardboard are more than enough to give you “Wowww” moments. Moreover, it generates annual turn over of $66 billions(2014) and net profit of $14.4 billions(2014) which $12.9 billions in 2013. Also it invested around $7.95 billion for Research and development on 2014 ( for those who believes the stats only on proofs, check here )Many people will astonish, “Dude, even after knowing these numbers, you still stand on your point?” I agree, these numbers are enough for common statistician to say that “Google” will continue its supremacy over a long period of time.
But if you analyse further from tech side, it might be a different story. Around 89% (i.e. $59 billion ) of Google’s Revenue is from Google Ads. Only remaining 11% from other products. It shows Google’s ineptitudency to create revenue from it’s other innovative projects. For those who baffle “Dude, What’s the problem in the source of income ? Money is money right”, it’s weakness lies in the source only i.e. Ads.
In the beginning of 21st century, Google started a new chapter in the digital marketing by running text ads with search results and it reaped a huge profit in the business. But in the rapid changing world, Digital Marketing has changed considerably. Google Ads might work well for direct response ads like Classifieds but surely it’s not enough for brand marketing. When it comes to bulk revenue marketing, brand ads scores competitively higher than direct response ads. To keep it simple, Google Ads may make you buy a product once but won’t create the impact/good impression on the brand (say Pepsi) among the people in which TV Ads are better at. Google failed to create immerse web apps like Facebook, Twitter where people spend most of their leisure time ( You might say Google plus but as everyone knows it’s a failure Google product) which now becomes the place for brand marketing. And brand advertising over Google search and gmail ads won’t create impact what fb/twitter does. “Then, what about You Tube?” might be you question. Yes, it’s the only triumph card of Google in Digital Marketing Business. But it’ll be again one of the options for advertisers. Google can sustain if it creates such kind of platforms more.
Google has a strong customer base which may seems to be its strength. But, it doesn’t have strong enough platform to utilize that customer base. You have to accept that Gmail and Google search may ‘Lock in’ its users but it can’t control its advertisers.
So what’ll happen if Google can’t sustain in its ad business. It’ll directly affect its revenue which’ll block the Google from investing in research and development and layoffs of employees become inevitable. End of supremacy doesn’t mean it’ll shutdown the company. Over a period of time, it’ll be no longer in the competition of top tech giants.
If you think that these facts and points are proposed on assumption, Google has failed to meet it expectations of tech analysts for last 5 quarters and it’s stock price fall around 8 percent last year.
And Google is not the first company to have the problem of sustaining in their supremacy. Former Tech giants like Digital Equipment and Wang become unknown for this generation. And Microsoft, which was once the fore frontier in Computer personnel software Dynasty was unable to convert its supremacy to the mobile world. It’s the price that every tech giants which dominated for long time need to pay. And now it’s in Google hands how it gonna resolve this problem.