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Google is the world's most powerful technology company, wholly dominating the connected environment, not just in search but also, via YouTube, in video sharing and, through Android, in mobile communications. Its main global challenger is probably Facebook, but for now Google remains comfortably ahead. The company has two missions in life: firstly to "organise the world's information and make it universally accessible" and more recently "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 mobile software to what it calls "other bets" such as healthcare research, driverless cars and even balloon-powered internet in rural Africa. To support its diversification and perhaps also blur a little of the relentless focus on its core search business, it created new umbrella company Alphabet Inc in 2015. Yet it is Google which still generates all but a tiny proportion of corporate revenues. 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. The search business rakes in more than 40% of all global digital advertising expenditure. Yet Google's position at the top of the digital advertising tree is under threat from Facebook (20% and rising of online adex) and even increasingly from Amazon. Google has attempted to broaden its reach by moving into hardware - primarily mobile handsets and Chromebook PCs - but results have been patchy. In 2011, it took steps to monetise Android by acquiring one of its first licensors, US handset manufacturer Motorola, but that experiment failed and the business was sold on two years to Lenovo of China. More recently it acquired a large chunk of contract manufacturer HTC, makers of its Nexus and Pixel handsets, to bring handset development inhouse again, but market share is tiny compared to Samsung and Apple. A big push into self-driving cars through "other bet" Waymo holds more promise, but it's still early days and this too is an increasingly crowded sector with many deep-pocketed companies jostling for a share of the market. Another small but interesting sideline is the Nest home automation business, acquired in 2017. But for now search advertising still dominates Alphabet's business model. Group revenues continues to grow strongly, but the percentage growth has been steadily slowing. For 2019, revenues were up 18% to $161.9bn (after a 24% increase the year before). More than 83% of that total came from advertising: $134.8bn. After more than doubling in 2018, net income rose by just 17% to $34.3bn. Founders Sergey Brin and Larry Page continue to hold majority control of the business, but they surrendered executive management of the business at the end of 2019 to Sundar Pichai, now group CEO.

Capsule checked 29th June 2019

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Historical profile information for Google

Recent stories from Adbrands Update:

Adbrands Daily Update 18th Dec 2020: Google was hit this week with two further lawsuits from a coalition of US states targeting its dominance in digital advertising and in search. The search suit was brought by 38 US states, both Republican and Democrat, alleging that Google uses its dominance as the most used search engine to prevent consumers from using other search sites, especially specialised services such as TripAdvisor and Yelp that focus on travel or local business. The suit was filed in Washington DC, and aims to interlink with the earlier suit filed by the Justice Dept in October. It demands curbs to Google's power "including but not limited to structural divestitures". A separate suit filed this week in Texas by nine Republican states accuses Google of abusing its power in online advertising, and is asking for financial damages.

Adbrands Daily Update 10th Dec 2020: "Year in Search 2020". Inevitably, Google's round-up of the most searched words and phrases of 2020 is full of heartbreak but also has a few stray rays of hope. How could it be otherwise after this most difficult of years? The result is arguably the search giant's most moving compilation to-date. As usual, American news, issues and personalities tend to dominate but a few other key international events - disasters, mostly - make an appearance. Notable by its absence, however, is any acknowledgement at all of one key event which took place on November 3rd. Presumably that's to avoid any indication of partisanship on Google's part. Worth noting, nevertheless, that Joe Biden was the single most searched person overall in 2020, and Kamala Harris the 4th.

Adbrands Daily Update 21st Oct 2020: The US Department of Justice launched a wide-ranging lawsuit against Alphabet alleging anti-competitive practices. The ripples from the case could affect not just Alphabet but other tech giants as well, not least Apple. It is, said the New York Times, "the government's most significant challenge to a tech company's market power in a generation and one that could reshape the way consumers use the internet." At the heart of the suit is the allegation that Alphabet uses its all-powerful Google search engine to shut out smaller competitors in favour of its own services, not just in search but a wide variety of other fields. Key to Google's dominance is its partnership with Apple. Google is the exclusive search provider on iPhone. As a result, search traffic from Apple devices accounts for as much as half of Google's total search volumes in the US. In return, Alphabet pays the tech group around $11bn annually, according to government estimates, to maintain that relationship. Needless to say, Google also makes it very difficult indeed for mobile manufacturers using its Android operating system to choose alternative search providers. "Google has almost completely shut out its competitors from mobile distribution," alleges the lawsuit. Alphabet itself said the allegations were without merit. "People use Google because they choose to, not because they're forced to, or because they can't find alternatives," said Alphabet's chief legal officer Kent Walker. "This lawsuit would do nothing to help consumers. To the contrary, it would artificially prop up lower-quality search alternatives, raise phone prices, and make it harder for people to get the search services they want to use."

Adbrands Daily Update 4th Feb 2020: Coming in the wake of strong numbers from tech rivals Facebook, Amazon and Apple, Alphabet's 4Q and full year figures were slightly underwhelming. For the final quarter, revenues and operating profits were both below analysts' expectations. Full year revenues were up 18% to $161.9bn (after a 24% increase the year before). More than 83% of that total came from advertising: $134.8bn. After more than doubling in 2018, net income rose by just 17% to $34.3bn. The big news this session was that Alphabet disclosed for the first time how much money YouTube and its cloud business generates. The video streaming service had ad revenues of $15.1bn, up more than a third year-on-year. That's slightly lower than analysts had been estimating, equivalent to less than $8 for each of YouTube's 2bn users, and most of the money is paid out to video creators. Subscriptions to YouTube's ad-free services generated another $3bn. Google Cloud had sales of almost $9bn, up 53%.

Adbrands Daily Update 17th Jan 2020: Alphabet this week became only the 4th American company ever to surpass a valuation of $1 trillion, joining an exclusive club whose only other US-based members are Apple, Microsoft and Amazon. The latter surpassed $1tn in 2018, but has since fallen back below the threshold. Apple and Microsoft are currently valued at around $1.4bn and $1.3bn respectively.

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