In the space of just a few short years, Google knocked Microsoft off its throne to become arguably the world's most powerful - possibly the most feared - technology company with involvement in a vast array of different areas. The company describes its mission as "to develop services that significantly improve the lives of as many people as possible". To that end it has built upon its core offering to spin out a kaleidoscope of additional services, ranging from global mapping and Android mobile software to healthcare research and driverless cars. Uniquely, for now at least, virtually all its add-ons are free to use, paid for by the awe-inspiring success of the company's advertising programme. Google may not be the world's biggest online company by revenues (that's still Amazon) but it's the most valuable by far with a market value of over $460bn by mid 2015. Yet Google's position at the top of the digital advertising tree is under threat from an even faster-growing business, Facebook. At the same time, its steps into hardware development have so far been patchy. In 2011, the group took steps to monetise Android by acquiring one of its first licensors, US handset manufacturer Motorola. Less than two years later, though, it sold that business on to Lenovo of China after failing to boost performance. Its Google Glass computer-powered eyewear also failed to find a ready audience. In 2015, the group announced plans to restructure, splitting out its more fanciful research-based operations as separate units under the umbrella of new parent company Alphabet Inc.
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Adbrands Company Profiles provide a detailed analysis of the history and current operations of leading advertisers, agencies and brands worldwide, and include a critical summary which identifies key strengths and weaknesses. Adbrands Account Assignments tracks account management for the world's leading brands and companies, including details of which advertising agency handles which accounts in which countries for major markets. Subscribers may access the following website links:
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Adbrands Weekly Update 27th Jul 2017: Alphabet appears to have shrugged off any financial damage from YouTube's brand safety furore earlier this year. Revenues for 2Q jumped by 21% to $26.0bn, putting the group on course to top $100bn for the first time for the year. Advertising revenues for Google and its subsidiary websites were up 18% to $22.7bn, suggesting that the temporary boycott by major brands over the possible appearance of their ads alongside extremist content had little impact. The group's less commercial "other bets" such as self-driving cars and Nest home thermostats added a modest $248m. The biggest impact on overall performance was the whopping fine imposed this quarter by the EU over Google's shopping search results. That caused a 28% slump in net income, though the final figure was still no slouch at $3.5bn. Excluding the fine, bottom line jumped by almost 37% to $6.3bn. There were a couple of minor concerns in relation to ad revenues: not least an increase in the proportion of traffic acquisition costs. These was inflated by YouTube's move into exclusive commissioned content as well as higher payments to search partners. And while the number of ad clicks continued to rise there was a further sharp decline in the rate paid by advertisers per click.
Adbrands Weekly Update 13th Jul 2017: Google caught a break from a Paris court which overturned a E1.1bn charge for back taxes imposed by France's financial regulator. An administrative tribunal ruled that Google's ad sales division had no taxable presence in France. The government has suggested it might appeal against the ruling in view of "the significant role of French employees in Google’s commercial activity in France". Google argues that its French staff only offer administrative and marketing support to advertising clients, and that all sales are made by the search giant's main EU office in Ireland. Such an arrangement is allowed under the tax treaty between France and Ireland. However, the French tax authority insists that this structure is fictitious, and that the sales are actually made within France by French staff.
Adbrands Weekly Update 29th Jun 2017: Following a seven-year investigation, the European Union issued a record fine of E2.42bn against Google for abusing its dominance "to give illegal advantage" to its own shopping comparison service over rival providers. According to EU competition commissioner Margrethe Vestager, "Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals. Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors." The company has 90 days to change its system and "comply with the simple principle of giving equal treatment to rival comparison shopping services and its own service". Google said in response, "We respectfully disagree with the conclusions announced today. We will review the Commission's decision in detail as we consider an appeal, and we look forward to continuing to make our case." The company also has two other antitrust cases under review in the EU, over its search advertising service Adsense and for Android.
Adbrands Weekly Update 4th May 2017: Google parent Alphabet reported big jumps in revenues for Q1 - up 22% to $24.8bn - and profits - up 29% to $5.4bn. Despite concerns about brand safety issues which emerged in the final week of the quarter, ad revenues from third-party websites were up 8% to over $4bn, compared to a 22% jump to $17.4bn from ads on Google's own properties.
Adbrands Weekly Update 4th May 2017: The latest annual ranking from Zenith Media of the world's biggest ad-funded media organisations underlines the dominance of Alphabet and Facebook over other companies. Between them they banked 20% of all international global expenditure in 2016, or over $105bn, and accounted for almost two-thirds of the growth across the sector as a whole. Their combined haul was as much as the next 28 media companies combined. With ad revenues over $79bn, Alphabet alone accounted for 15% of total spend. Facebook reaped in $27bn. Of the others, only two generated more than $10bn: Comcast at almost $13bn and China's Tencent at $10bn.
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