Hi all, I have seen a few comments on Reddit and YouTube regarding Google and their future. As you all know the competition in the search space is getting more competitive as companies trying to get a slice of that ad money. Meanwhile search bots have proven to be useful in many instances.
As many bear cases have been written all over the internet, I will focus on the bull cases. I will share my top ten with you, and I promise you, this is fully written by myself without the help of AI. You will believe me as my English grammar is bad AF.
Let me give you first an overview about Google revenue streams by percentage:
57% Google Search ads, 10.3% YouTube Ads, 10.2% Google network ads, 11.3% Subscriptions and devices, 10.8% Google Cloud, Rest Are other bets.
Of course Google search makes up a huge chunk of the revenue and even more of the profits. But I think what many people are missing in many of the discussions about Google is:
Google will not lose their 90% market share over night IF at all. It will be years until the majority of people will even notice that there are other options now. They know about ChatGPT and are still googling.
Regarding to Statcounter Google had 91.8% market share in January 2021. Now after ChatGPT and MS Copilot and whatever, Google stands at 90.9%. This is so little change, that we cannot even speak about a trend at the moment.
IF Google is going to lose substantial market share it won’t go to zero. People are often pretending like Google is going to be irrelevant and losing all business. Not going to happen, Bing and DuckDuckGo existing during Googles dominance proves this.
The minimum market share will always be the Android users. As Google will be defaulted with Android and Chrome devices. As long as the Apple Safari deal is legal and active the minimum base for Google is HUGE. I can’t see people changing the standard search engine pro actively, especially if it’s what they know – Google. That something like Bing even has market share at all, shows that people are likely to stay with the default. That is not an insult from my side this is an argument from Satya Nadella himself, made in court. At the moment, IF they change the default, they are more likely to switch from Bing to Google, than from Google to Bing. Additionally I think you can also add Google cloud business customer to this baseline.
That means advertiser will continue to pump money into Google search. Even if their market share goes down to 50-70%(very conservatively). They will very likely remain the number 1 search engine for a very long time. A few anecdotal tech bubble guys are not representative for changing the habits of billions of people. And with more people getting access to internet, the market as a whole will continue to grow.
Google does not only have the number 1 search engine, they also have number 2 with YouTube. YouTube is also getting a lot of advertising money and is still growing double digits.
Even if Google search money stops to grow or would decline, you have to look out for, if it would decline faster than the other segments will grow. If it’s flat or declining like 1-2% a year while Cloud and YouTube and Networks are growing double digits, Google will still generate Billions of cash flow a quarter. Similar to the current state of Apple with their IPhone sales.
Googles businesses are alle potential high margin businesses and are still growing double digits. Of course search is the number 1 but the other businesses would also be worth 100s of billions on their own.
I don’t see the threat of Google getting broken up by the authorities. You cannot made a bear case for both. Either they have monopoly that needs to be broken up, or they are threatened by AI companies. You cannot make a case for both at the same time imho. But even if they are getting punished or broken up, this will take YEARS in courts and after that they will be appeals by Google which will also take years. Until then there is a chance that Google businesses are more worth broken up in parts anyway. I see that very relaxed.
All of this doesn’t factor in any bets (like Waymo or their 8% SpaceX stake) that could take off or anything they are doing with Deepmind and AI which is a potential upside imho.
Google will be fine. Why I think YouTube, Networks, Cloud and other businesses are too businesses that will continue to grow would take another 100000 words and I think there are enough sources and analysis for that. So that’s it from my side, would love a positive vibes discussion.
Long story short: They could have some short term struggles due to sentiment and temporary revenue and profit lost. But they will be fine long term.
