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 28th Sep 2017: Interbrand published the 2017 edition of its annual Best Global Brands ranking. Apple and Google retained the top two places and other digital disrupters continued their ascent up the charts at the expense of old-school brands. At valuations of $181bn and $142bn respectively, a gap of more than $60bn separates Apple and Google from any other brands. Coca-Cola remains among the top five, but was pushed out of the #3 slot by Microsoft and is also challenged at #5 by Amazon, whose valuation increased by 29% year-on-year. That jump was beaten only by Facebook, whose 48% surge pushed it into the Top Ten between Samsung and Toyota on one side, and Mercedes-Benz and IBM on the other. The highest new arrival among the 100 was Netflix at #78, with Salesforce and Ferrari entering among the 80s. They took the place of outgoing brands MTV, Xerox and Ralph Lauren.
Adbrands Weekly Update 21st Sep 2017: Google took steps to bring back smartphone development inhouse for the first time since it offloaded Motorola to Lenovo in 2014. It has agreed to acquire a large chunk of struggling mobile manufacturer HTC's hardware design and development business, specifically the part that works on its Google Pixel smartphone, previously produced under contract. No manufacturing assets are included in the deal, but around half of HTC's research & design team - some 2,000 employees - will transfer to Google. The price tag was $1.1bn, equivalent to more than half of HTC's undisturbed market valuation. The Taiwanese manufacturer has seen its share of the mobile sector plummet in recent years as a result of the rapid growth of low-cost Chinese brands, from a high of almost 9% in 2011 to less than 1% last year. It will continue to manufacture the Pixel under contract, and a small range of its own smartphones, but is expected to shift the focus of its existing operations towards its well-regarded VR headsets.
Adbrands Weekly Update 17th Aug 2017: Google, famed for a commitment to social responsibility and the sacred philosophy "Don't Be Evil", found itself in unfamiliar territory at the heart of a row over gender and diversity. Senior software engineer James Damore was abruptly fired after an internal discussion document penned by him a month ago was leaked to the media. The report set out to consider cultural taboos and specifically the reason why women are generally under-represented in senior technology roles. His thoughtful and well-reasoned - though inevitably inflammatory - argument was, he said, that "men and women biologically differ in many ways" and that "these differences aren't just socially constructed". Women were, he said, passed over for senior tech positions because of "men’s higher drive for status" and because they are "more prone to anxiety". Women are, he argued, more interested in people as opposed to things, and are more open to feelings and aesthetics rather than ideas. He also suggested that they have "a harder time negotiating salary, asking for raises, speaking up, and leading".
The document initially garnered little attention, but according to a piece subsequently penned by Damore for the WSJ, "everything changed when the document went viral within the company and the wider tech world. Those most zealously committed to the diversity creed... could not let this public offense go unpunished. They sent angry emails to Google’s human resources department and everyone up my management chain, demanding censorship, retaliation and atonement." In response, he says, Google "tried to placate this surge of outrage by shaming me and misrepresenting my document", a move which, he says, merely serves to silence open and honest discussion. The whole saga has since become a political football, seized and manipulated by both left-wing and right-wing commentators for their own ends. An anonymous poll this week of Silicon Valley employees appeared to suggest that more than half of Google employees felt the company had been wrong to sack Damore over the issue, effectively making him a martyr to the cause. Indeed, several commentators, including The Economist, argued that Google would have done better simply to issue its own equally thoughtful rebuttal of his argument. Indeed, as Damore himself argued in the WSJ, "How did the company that hires the smartest people in the world become so ideologically driven and intolerant of scientific debate and reasoned argument?"
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.
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