Have we Reached the Peak of Google’s Dominance?

Posted by | January 23, 2015 | Blog | No Comments

One of the most profitable company’s out there today, Google’s quarterly revenues are mind-blowing. With more than $3 billion in free cash flow every quarter, the tech giant seems to be endlessly growing at a 20 percent rate year over year.

Besides dominance in search, Android is the number 1 mobile platform, and Google has the top visited video site YouTube in its portfolio as well. But with all this great stuff, has Google finally hit it’s peak? Are we about to see the end of Google’s dominance as we know it? Keep reading to see what we have to stay.

Only One Revenue Stream?

Although Google doesn’t break down revenue by individual business segments, most of all revenue is only coming from search advertising. About two thirds of all of Google’s revenue comes from it’s own sites while the final third comes from Google’s partner sites and other businesses.

As reported for the third quarter of last year, Google earned $11.3 billion in search advertising revenue on its own sites. While it did earn money from other things like an estimated $300 million from YouTube as well as more from Gmail and Finance, search advertising takes the cake.

Network revenue brought in Google a total of $3.4 billion of which $2.4 billion was paid out to network partners for their traffic. The remaining $1.8 billion was from other revenues and even though this is up 50 percent from last year, could this really make a dent in Google’s bottom line?

Google’s Search Advertising Flat-lined

Although with still more than 80 percent of market share globally and 75 percent in the US, Google is facing major challenges. When the web browser Firefox opted to default to Yahoo! search, the decision which may have cost Google a whopping 4 percent in US market share.

More of the same may follow. Apple is in talk with Bing as their default search provider. Facebook is pushing for its own internal search function to prevent users from leaving the site and Amazon is doing the same for product searches.

Users Search for Products Outside Google

As Amazon pushes to improve their product search functions, users may go directly to the source rather than relying on a Google search. The same holds true for apps as people search app stores for downloads instead of using the Google homepage.

With Google seemingly reaching its market saturation point, the era of Google dominance might have reached it’s end. Do you think Google has reached its peak? Please share your comments.

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