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. (It was itself subsequently challenged for that title by Facebook). 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 Social Media 10th May 2019: "Make Your Home A Nest". Google finally got around to rebranding its Nest home devices system under the parent umbrella. Here's a lovely anthem spot from 72andSunny to celebrate the relaunch, filled with a multitude of charming vignettes about home life. It's a fine spot that will certainly stick in the mind of consumers; and it's also a fine product (Adbrands has a couple of Nest cameras, and loves them). However, I'm not sure it's a proper reflection of the product. I can't imagine anyone would be thinking of installing a Nest camera to capture moments of family joy, as the ad suggests. And you should definitely steer clear of anyone who has one in the bathroom or bedroom. In fact, the whole 90 second spot contains only about 5 seconds of actual Nest footage, so we'd have to say it's all a bit misleading; however lovely it may be.
Adbrands Daily Update 30th Apr 2019: Alphabet took investors by surprise with significantly worse than expected results for 1Q, prompting a sharp correction in the company's share price, down 8% the day after the announcement (albeit from a record high). Revenues came in roughly $1bn lower than predictions at $36.3bn, and year-on-year growth of 17% was Alphabet's worst for four years. Earnings were also disappointing, and profit margins plunged from 25% a year ago to just 18%. One key factor, especially in the latter decline, was the $1.7bn EU regulators slapped on Google last month, but the fundamental underlying issue is increasingly fierce competition on advertising revenues, which generate virtually all of Alphabet's top line.
Adbrands Daily Update 20th Mar 2019: Google is aiming to revolutionise the home gaming sector with the launch of a new cloud-based service, Stadia, later this year. A holding page is already up and running at Stadia.com. Unlike rivals Playstation and Xbox, Stadia will require no console, and no downloads, just a hand controller, with all games delivered instantly over the internet from Google's own servers. The company says the service will work on all devices from desktops to smartphones. It's being billed by market-watchers as "Netflix for gaming". As yet, no details of pricing or content have been released, but it is likely to be a subscription-based service. Several major games developers are already converting existing titles for the platform. Separately, the search giant was fined €1.5bn by EU regulators for restricting rivals from appearing in search ads delivered under its AdSense platform. It is the company's third fine in three years from the EU for restricting free competition, bringing the total penalty to-date to over €8.2bn.
Adbrands Daily Update 11th Feb 2019: Deeply depressing news for most digital publishers this week in a new report from adtech consultancy Polar. Just the top seven leading digital platforms will rake in 80% of all online ad spend in 2019, leaving other publishers to squabble over the measly remaining scraps. The top seven's combined take of the $300bn-plus market will grow by 20% this year, while the share left for everyone else will fall by at least 11%, or by as much as 23% if the big seven continue to grow at their current rate. Google alone accounted for 43% of all advertising revenues in 2018, or $115bn; and Facebook for another 20% or $54bn. Another 12% was split between Amazon (4%), Microsoft (3%), Verizon (3%), Twitter (1%) and Snap (1%). That left $67bn for everyone else in 2018. It could fall in 2019 to as little as $52bn.
Adbrands Daily Update 5th Feb 2019: Google had another storming year in 2018, but the strains of diversification into other areas showed in 4Q results from parent Alphabet Inc. Increased spending on investment-intensive "other bets" like Waymo self-driving cars, Calico medical research and Verily life sciences weighed heavily on operating margins across the group as a whole. Other bets reported a steep rise in operating losses to $3.4bn. There was also a big increase in fines payable in Europe for misconduct issues. These almost doubled to over $5bn for 2018. Still, that left only a small dent in total revenues, which rose by almost a quarter to $136.8bn. Net income more than doubled to $30.7bn, helped by significantly lower tax charges. Pretax income, by comparison, rose by only 28%.
Adbrands Daily Update 21st Jan 2019: Google is the first big loser under Europe's tough new GDPR data protection laws. The search giant has been fined €50m by French regulators for failing to obtain adequate consent from users when processing their data for the purpose of personalised advertising. According to French data protection office CNIL, "the infringements observed deprive the users of essential guarantees regarding processing operations that can reveal important parts of their private life since they are based on a huge amount of data, a wide variety of services and almost unlimited possible combinations."
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