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SUMMARY - Peak Google

[WHAT]

1. ] Ben looks at the state of google today, is this the limit

[WHY]

1. ] In the beginning IBM was the boss selling mainframe computers,
1. ] they still are selling and maintaining mainframes but have some financial problems,
2. ] then MSFT surpassed IBM with the PC
1. ]
3. ] then APPLE surpassed MSFT with mobile ( smartphone / ipad )
1. ] 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’ll forgive a war analogy, both companies won the battle but lost the war.
4. ] who could be surpassed next, will it be GOOGLE
1. ] google's most recent qtr - ] earnings were below expectations, still good but not great, still hugely profitable, 16.6 b
2. ] google is still dominant in 50B year search adv. market
3. ] captures the majority
5. ] small percentage of the global 545B brand advertising marketplace
1. ] The idea behind brand advertising is to build “affinity” 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’re rushing through the supermarket and just need to grab something, the idea is that you’ll gravitate to the brand you have developed an affinity for. And once a customer has picked a brand, they’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
2. ] 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.
3. ] most effective method to deliver "brand" ads was banner ad, now native ads
4. ]
6. ] The problem for Google
1. ] is that there is no obvious reason why they should win this category. Yes, they’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’s newsfeed, Twitter’s stream, a Pinterest board, or even your typical news site’s home page. Sites like Buzzfeed 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.
2. ] 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 – the algorithm, the auction system, and machine learning – are skills that don’t really translate to the more touchy-feely qualities that make a social service or content site compelling.
7. ] Still, I hope the subtle point I’m trying to make is clear:
1. 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’s a small percentage of total digital advertising, just as we thought differently about IBM’s dominance of mainframes in the age of the PC, or Microsoft’s dominance of PCs in the age of the smartphone.
2. Finally, as I noted at the beginning, this is not about the decline of Google. It’s about there being a much broader opportunity than just search advertising.
8. ]

[WHERE]

1. ] http://stratechery.com/2014/peak-google/

[WHEN]

1. ]

[EXAMPLE]

1. ]

[HOW-TO]

1. ]

[REFERENCE]

1. ] comments - Are we at Peak Google? | Hacker News
1. ] author = hn user monkbent
2. ]

 

Details

ID: 3890

NAME: SUMMARY-peak-google

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

AUTHOR: article.author/s

EDITOR: article.editor/s

PUBLISHER: article.publisher/s

STATUS: Write

PRIORITY: 0

OWNER ID: 75

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