How Does Google Make Money?

Transcript

1. How does Google (Alphabet) make money? Datadino Stories
2. 1/ It’s simple. By selling ads on its platform. 81.3% of Google’s revenues are attributable to ad related activities. Data Source: Alphabet 10-K & 10-Q’s Split of Google’s Revenue — 2021* % *9 months ending Q3 2021 81.3% 18.7% 0% 25% 50% 75% 100% Ads related All other activites
3. 2/ This is nothing new. Ads have always made up for a majority of Google’s revenues. Data Source: Alphabet 10-K & 10-Q’s Split of Google’s Revenue % *9 months ending Q3 2021 86% 85% 83% 80% 81% 14% 15% 17% 20% 19% 0% 20% 40% 60% 80% 100% 2017 2018 2019 2020 2021* Ads related All other activities
4. 3/ This is because Google has the largest wallet share (28.6%) of worldwide digital ad market… Data Source: eMarketer Market share (2021) — global digital ad market % 3.0% 5.8% 8.7% 23.7% 28.6% 0% 10% 20% 30% Tencent Amazon Alibaba Facebook Google
5. 4/ … and dominates the search market (91.9% market share). Data Source: statcounterGS Search Market Share % As of Dec-2021 0.7% 1.1% 1.4% 1.5% 2.9% 91.9% 0% 25% 50% 75% 100% DuckDuckGo Yandex Baidu Yahoo Bing Google
6. 5/ No surprise, search related activities make up for 71.3% of Google’s ad related revenues… Data Source: Alphabet 10-K & 10-Q’s Split of Revenue (2021*) within Google Ads segment % *9 months ending Q3 2021 13.6% 15.1% 71.3% 0% 25% 50% 75% 100% YouTube ads Google ad network (AdMob, AdSense, AdManager) Google search properties ads (Search toolbars, Gmail, Maps, PlayStore)
7. 6/ ... with YouTube taking an increasing share of the pie. Data Source: Alphabet 10-K & 10-Q’s YouTube ads revenue As a % of Google ads revenue *9 months ending Q3 2021 8.5% 9.6% 11.2% 13.5% 13.6% 0% 4% 8% 12% 16% 2017 2018 2019 2020 2021* YouTube Ads
8. 7/ Outside of ads, Google makes money via Play store commissions, hardware sales (Pixel, Nest, Fitbit), YouTube premium, Google Cloud & Enterprise Workspace. Data Source: Alphabet 10-K & 10-Q’s Google’s revenue from activities other than ads As a % of total revenues *9 months ending Q3 2021 10.9% 7.5% 0% 4% 8% 12% Google PlayStore commissions + Hardware (Pixel, Nest, Fitbit) + YouTube premium Google Cloud + Enterprise Workspace
9. 8/ But all of that, adds up to just 18.7% of total revenues. Data Source: Alphabet 10-K & 10-Q’s Split of Google’s Revenue — 2021* % *9 months ending Q3 2021 81.3% 18.7% 0% 25% 50% 75% 100% Ads related All other activites
10. 9/ Google Cloud shows some promise... Data Source: Alphabet 10-K & 10-Q’s Google’s Cloud + Enterprise Workspace revenues As a % of total revenues *9 months ending Q3 2021 3.7% 4.3% 5.5% 7.2% 7.5% 0% 2% 4% 6% 8% 2017 2018 2019 2020 2021* Google Cloud + Enterprise + Workspace
11. 10/ … but it has some serious catching up to do with AWS and Microsoft Azure. Data Source: Canalys Cloud services market share (2021) % 39.0% 8.0% 21.0% 32.0% 0% 15% 30% 45% Others Google Cloud Microsoft Azure AWS
12. So that was a 101 on how Google makes money. I hope you found that insightful. Thank you for reading. /End @datadino_ www.datadino.co For more visit: