Over-reliance on advertising, how long can one-legged Google last ? Silicon Valley Cover
1、Google's advertising business remains its only core business, but it faces stiff competition from technology companies such as Amazon, with more young people turning to their rival platforms.
2、Neither mobile nor cloud computing is enough to be Google's new growth engine, and google's other bets on the future have been burning money.
3、The popularity of ad blocking software poses a huge threat to Google's business. People are used to using the Internet without seeing ads, and Google loses money every time it gets blocked by ads.
4、Google's high-hope Youtube platform in the advertising business has not allowed it to get enough attention from the brand.
5、As society as a whole becomes more concerned about personal privacy, users are more cautious about Google's free products, regulators are more disciplined about Google, and the public is more critical of Google's behavior.
(This article is about 4000 words, it takes about 10 minutes to read the full article)
Editor's NoteLast month, Google just reported its first-quarter results, and Alphabet, its parent company, reported revenue growth at its slowest pace since 2015. Google's advertising revenue for the quarter was $30.72 billion, less than expected at $31.48 billion, up just 15 percent from a year earlier and down from 24 percent a year earlier and the lowest since 2015. Google's revenue comes from advertising, and it is clear that the tech giant is at high risk of a possible collapse because of weak growth in its core advertising business.
The following is the full text of the article:
Before the collapse, business esthed tended to boom, as did Google. But if Google Tower collapses, it will be the most spectacular collapse in the tech industry's history.
Long before Google was an idea, its founders argued that "advertising-funded search engines will inherently favor advertisers, away from the real needs of consumers." "
But they eventually changed their minds.
With this change, Google became one of the richest and most powerful companies in history. The search business is Google's cash cow and its indisputable only advantage. And when Amazon quickly overtook Google as a top-of-the-line search destination in 2017, Google's base began to falter.
Amazon, which competes with Google on its own turf and is now making a splash in online advertising. More online shoppers are now searching directly on Amazon, which could be a life-and-death threat to Google. To make matters worse, it is advertisers and the most important group in the future market: young people, who have abandoned Google in favor of Amazon for shopping searches. Advertisers tend to follow in the footsteps of younger audiences, and Amazon is taking market share from Google's search advertising business. Google's already powerful search engine business is beginning to falter.
Google realizes that it's hard to convince users who are used to free services to pay instead.
The shift from search to discovery also took shape in late 2010: when consumers aren't searching directly for items on Amazon, they turn around to find consumers. Advertisers are also generally aware that the money previously spent on Google search ads could either be spent on Amazon ads or on native ads with embedded content such as Instagram and Facebook. Google doesn't have engaging original content, so it's completely missing the wave, just as it missed social media and instant messaging services.
Google has also found these signs and tried unsuccessfully to find more revenue in areas other than advertising. Google has struggled to make money in hardware, cloud services and many ambitious areas.
Despite its numerous businesses and its efforts to diversify, Google is essentially a company with a high-tech coat and an old-fashioned billboard business. Despite its efforts, Google has made very little revenue from its non-advertising business. Other businesses, including the Play Store, hardware and cloud businesses, reported revenue of $5.45 billion, also below expectations of $5.67 billion, or just 15 percent of Google's overall revenue. Moreover, The revenue from Google's Other Bets is not even enough to pay a small percentage of the fines that regulators are about to issue.
Of course, in addition to Google, companies such as Apple have the effect of relying too heavily on individual businesses. Just as Google relies on advertising revenue, Apple once relied on iPhone revenue. But since the fourth quarter of last year, Apple has accelerated its transition to service, and while it has not been able to plug the gap created by the collapse in iPhone revenue growth, services such as services and wearables, which continue to grow at a high rate, are becoming the new engine of Apple's growth.
By contrast, neither mobile phones nor cloud computing will be enough to be Google's new growth engine.
In late 2015, Apple, Google's main mobile rival, added a feature on its own devices that allows users to block ads.
Devices running iOS account for as much as 75 percent of Google's mobile search ad revenue, which may be why Google pays Apple billions of dollars a year to maintain its default search engine status on Apple devices. By allowing users to block ads, Apple has made a decisive case for blocking ads and dealt a major blow to the future of online advertising.
Apple's move reflects its position at a time when the mainstream media was widely using ad-blocking software. Apple, one of the world's largest technology companies, has also stood behind consumers, making the campaign even more aggressive.
By 2018, more than a quarter of desktop and laptop users in the United States will be blocking online advertising. These users soon began blocking ads on mobile devices, and mobile ad blockers used more in 2017 than desktop ad blockers and grew faster.
The mobile advertising business was Google's biggest growth point in its final years in power. But when consumers realize that ads and tracking scripts are consuming up to tens of dollars a month in traffic services, and are consuming power from mobile devices, they start blocking mobile ads.
The study showed that 54 percent of users said they didn't click on banner ads because of a lack of trust, while 33 percent said they couldn't stand the form at all. According to the survey, on average, only 0.06% of viewers click on banner ads, with more than 60% of them by accident.
Even those who don't block ads try to ignore the content entirely. The researchers call this phenomenon "banner blindness."
However, those most likely to block ads tend to be millennials and high-income groups, who are also the most valuable to advertisers. Young users are a powerful indicator of future trends, but they are also loyal users of ad blocking software. Internet users have made it clear that they hate Google's ads.
The popularity of ad blocking software poses a huge threat to Google's business. People are used to using the Internet without seeing ads, and Google loses money every time it gets blocked by ads.
The number of devices using ad blocking software is on the rise year by year
In early 2017, Google made an unexpectedly desperate decision on the growing status of ad blocking, and it decided to add its own ad blocker to chrome. But Google's move does nuns, except that it has attracted more antitrust regulation sparking more antitrust regulation sedit on blocking rival ads. Google soon learned that even if the quality of its ads improved slightly, the number of ad blockers would inevitably continue to rise.
Then, in 2019, Google tried to prevent users from blocking ads in the then-dominant Chrome browser. Google, meanwhile, has been paying huge sums of money to keep its ads out of the mainstream.
Google is reluctant to admit that there are many problems with the networks that users help build, and it's clear that when users start rejecting Google's advertising business, the company doesn't know how to respond. Too many users are used to a network that doesn't have intrusive banner ads. Internet users have waged a war on online advertising, and Google has lost.
One of Google's key platforms for advertising services is YouTube, which has quickly become one of Google's biggest physical businesses since it was acquired in 2006. Although one in six people in the world now access the YouTube video platform every month, it has never been profitable, and Google has never reported its earnings.
YouTube is trying to lure big brands and advertisers into the platform and hopes to end up making a profit. But in the process, YouTube misunderstood, alienated and completely infuriated creators and communities that turned the platform into a global phenomenon. It has also recently drawn frequent public criticism that YouTube does not have effective control over the distribution and promotion of dangerous content.
To counter the impact of ad blocking software, Google introduced a youTube without ad subscriptions in late 2015, but the number of subscribers was not satisfactory. In the end, Google realized it was hard to convince users who were used to free content to pay for it.
YouTube ads are annoying to users, and the video-sharing site has never been as effective in raising brand awareness as Google needs. Global advertising spending continues to shift from traditional media to the web, but not to Google's platforms.
In the eyes of users, Google has free and innovative products that are used by billions of people. In order to get these free products, users have to give up their personal data and valuable attention. Google ads are not what users want, but a price to pay to access the Google ecosystem.
Google is attracting people to use their privacy, data and attention in exchange for the convenience of free use of its products and services, largely because there are no good alternatives on the market. However, one scandal after another proved that the deal was not a good deal, and people began to question what they had given up by clicking "I agree".
It's not just Google users who question this trade-off. Regulators and policymakers are finally beginning to understand how free Internet products and services are profitable, and the companies behind them will soon face a variety of liquidations and regulations.
Now that Google's cash cow is not what it used to be, with rising ad blocking, changing public attitudes and tighter regulation, and Google's failure to make a profit on all of its bets on the future, Google's future depends largely on Google's transformation.
But there is no doubt that Google has done it wrong.
It's not the worst thing for Google to lose most of its users and annoy the public. More importantly, it has failed to catch up with one of the biggest shifts in Internet history.
From day one, Google's strategy can be simply summed up as "information aggregation and advertising." Every word Google Digital Assistant Assistant hears, every operation in Google's many apps, and every data point generated by billions of users is stored and analyzed by Google on the grounds that it provides more accurate advertising.
Google's business model is built entirely on the need to collect and analyze as much data as possible from as many users as possible in order to provide advertising services accurately. And this idea has led the entire advertising industry to turn the network into a monster that can track and monitor users.
The ultimate vision of precision advertising is perfect targeting and perfect attribution: display ads in front of the right people, know exactly when and where someone sees them, and prove which ad they're shopping for.
The whole industry is chasing this vision, but people are finally realizing that the solution to this problem is completely backward. A large, dirty, unfathomable, and complex tracking system that covers the entire network can only make things too complicated, disrupt the user experience, and lead to an alarming amount of ad fraud.
For the advertising industry as a whole, the true attribution of shopping behavior and accurate customer targeting used to be a kind of black magic, almost impossible to achieve.
The breakthrough in technology is that if everything from interest matching to ad placements occurs inside the user's device, it's perfectly possible to show and interact with the user's ads without leaving the user's device, and to give brands an understanding of how to serve them.
As it turns out, ads don't need to broadcast a user's private data on the network to be accurate, or slow down the site, and don't need to spend the user's bandwidth and battery life to fund good content.
As Google's revenues grow, so does consumer awareness about how Google can profit from its own data and concerns. Users are increasingly reluctant to sacrifice privacy for convenience. More and more reluctant to click "I agree". But this trend will only accelerate if regulators force Google to increase the transparency of its business model. And a perfect storm is brewing.
Those booming companies understand that users are not pawns in the company's business, not bids in unlimited automated auctions, not data points in the ocean of categories, and not the relevance of big data sets. The user is the user. It turns out that treating users as talents is a successful strategy, not just for advertising or profits, but also for society.
At its peak, Google had an impressive number of products and a large and loyal user base, but advertising revenue was the glue that kept it all together. Google's core business is beginning to collapse under the weight of its vast empire as data volumes shrink and rivals grow.
Google has been a driving force in the tech industry since it was launched in 1998. But in a world where people are increasingly hated to be tracked and generalised, Google's business model is not as innovative and friendly, and it has missed opportunities to turn around, ultimately making its many ambitious and ambitious projects unsustainable. Innovation will no doubt require huge sums of money, but Google's main source of revenue has begun to dry up.
In just a few short years, Google has gone from an interesting search verb to a verb that reminds us how fast a giant falls.
The "Silicon Valley Cover" series is a compilation of tech industry interviews, heavy research reports, and in-depth surveys of large companies, and aims to provide technology information enthusiasts with the most in-depth high-quality good writing.
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