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Article Description: by Ben Thompson @stratechery.com - Ben looks at the state of google today, is search advertising the height of its success

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Content: use HTML Edit Content <h1 style="text-align: center;">SUMMARY - Peak Google</h1> <h2>[WHAT]</h2> <ol> <li>] Ben looks at the state of google today, is this the limit</li> </ol> <h2>[WHY]</h2> <ol> <li><strong>] In the beginning IBM was the boss selling mainframe computers, </strong></li> <ol> <li>] they still are selling and maintaining mainframes but have some financial problems,</li> </ol> <li><strong>] then MSFT surpassed IBM with the PC</strong></li> <ol> <li>]</li> </ol> <li><strong>] then APPLE surpassed MSFT with mobile ( smartphone / ipad )</strong></li> <ol> <li>] IBM focused on selling and servicing PCs, instead of building a platform, while Microsoft focused on extending Windows to mobile instead of the user experience. If you&rsquo;ll forgive a war analogy, both companies won the battle but lost the war.</li> </ol> <li><strong>] who could be surpassed next, will it be GOOGLE</strong></li> <ol> <li>] google's most recent qtr - ] earnings were below expectations, still good but not great, still hugely profitable, 16.6 b</li> <li>] google is still dominant in 50B year search adv. market</li> <li>] captures the majority</li> </ol> <li><strong>] small percentage of the global 545B brand advertising marketplace</strong></li> <ol> <li>] The idea behind brand advertising is to build &ldquo;affinity&rdquo; among potential customers. For example, a company like Unilever will spend a lot of money to promote Axe or Dove, but the intent is not to make you order deodorant via e-commerce. Rather, when you&rsquo;re rushing through the supermarket and just need to grab something, the idea is that you&rsquo;ll gravitate to the brand you have developed an affinity for. And once a customer has picked a brand, they&rsquo;re loyal for years. That adds up to a lot of lifetime value, which is why consumer-packaged goods companies, telecom companies, car companies, etc. are among the biggest brand advertisers</li> <li>] To date this type of brand advertising has strongly favored television; targeting is certainly nice, but channels like Lifetime (Dove) or ESPN (Axe) are specific enough, and the actual process of implementing a campaign at scale is far more efficient and cost effective on TV.</li> <li>] most effective method to deliver "brand" ads was banner ad, now native ads</li> <li>]</li> </ol> <li><strong>] The problem for Google</strong></li> <ol> <li>] is that there is no obvious reason why they should win this category. Yes, they&rsquo;re an ad company, but the key to native advertising on the Internet is the capability of producing immersive content within which to place the ad, such as Facebook&rsquo;s newsfeed, Twitter&rsquo;s stream, a Pinterest board, or even your typical news site&rsquo;s home page. Sites like <a href="http://stratechery.com/2014/buzzfeed-tech-company/" target="_blank">Buzzfeed</a> have taken this idea to its logical conclusion: their content is basically a marketing tool meant to show advertisers how skilled they are at going viral.</li> <li>] Google has nothing in this regard (with the notable exception of YouTube). Moreover, all of the things that make Google great at search and search advertising &ndash; the algorithm, the auction system, and machine learning &ndash; are skills that don&rsquo;t really translate to the more touchy-feely qualities that make a social service or content site compelling.</li> </ol> <li><strong>] Still, I hope the subtle point I&rsquo;m trying to make is clear:</strong></li> <ol> <li>I think Google is quite safe when it comes to search, and that they will be a very profitable company for the foreseeable future. I just suspect we will all think differently about that dominance when it&rsquo;s a small percentage of total digital advertising, just as we thought differently about IBM&rsquo;s dominance of mainframes in the age of the PC, or Microsoft&rsquo;s dominance of PCs in the age of the smartphone.</li> <li><em>Finally, as I noted at the beginning, this is not about the decline of Google. It&rsquo;s about there being a much broader opportunity than just search advertising.</em></li> </ol> <li>]</li> </ol> <h2>[WHERE]</h2> <ol> <li>] <a href="http://stratechery.com/2014/peak-google/" target="_blank">http://stratechery.com/2014/peak-google/</a></li> </ol> <h2>[WHEN]</h2> <ol> <li>]</li> </ol> <h2>[EXAMPLE]</h2> <ol> <li>]</li> </ol> <h2>[HOW-TO]</h2> <ol> <li>]</li> </ol> <h2>[REFERENCE]</h2> <ol> <li>] <a href="https://news.ycombinator.com/item?id=8496202" target="_blank">comments - </a><a href="https://news.ycombinator.com/item?id=8496202" target="_blank">Are we at Peak Google? | Hacker News</a></li> <ol> <li>] author = hn user monkbent</li> </ol> <li>] </li> </ol> <h1 style="text-align: center;">&nbsp;</h1>