Google is spreading its wings

  Aug 26, 2015 6:29:11 AM

Google never envisioned itself as ’just another’ search engine company when other search engines like Altavista, Yahoo, WebCrawler, AskJeeves and Infoseek already existed. It had different plans. Search engines earned revenue through advertisements which were clicked by its users more often. So, these search engine companies tried attracting more and more users to their platform. But Google’s innovative methods of getting user’s attention started with their PageRank, Adwords and MobAd technologies. With Google’s ability to sense user expectations, and define user needs, they continued to grab users through Android-based devices, starting with handsets and expanding to other domains such as consumer electronics, wearable and automotive. All these innovative methods helped Google to become one the most well-known companies from just another search engine. What makes Google revenue roadmap different? They are doing this for what? The answer is content – creating, hosting and carriage - (Creation through devices, hosting through projects such as YouTube and Google+ and carriage through fiber/wireless).

Google decisions have always been driven towards encouraging users to use Google’s products free of cost, and thus, increasing advertisement revenues. Their revenue grew to US $66 billion in 2014 out of which around US $59 billion was from advertisements. Google’s revenue growth is a little rocky as of now and profits have significantly reduced. To get back to its earlier growth path, Google is trying innovative ways to attract untapped users so far.

Google Wireless Service

  • As discussed earlier, Google is now into wireless carrier business and sells wireless services to its customers. Google wireless service is currently available only to Nexus 6 handsets users (which are not tied up with other carriers). But this service might become open for others as well when other phones in the market start supporting multiple cellular networks.

Through Project Fi project, Google provides attractive plans – some of them being $20/month for unlimited domestic text-talk, unlimited international text, adjusting unused data to the next month bill, no annual contract service, no termination fees, etc. These kinds of plans will force other carriers to take the same road thus, reducing the cost substantially. Google has partnered with Sprint and T-Mobile for these services. In future, if everything goes well, Google may acquire one of the carriers, host their services in operator networks, provide free services to subscribers and earn more revenue through advertisements.

Google Fiber

  • Google is already an Internet and Television service provider through iGoogle Fiber. This project is offering free internet of 1Gbits/sec speed, 1TB of Google drive space, 2 TB of DVR and TV programmes to Android and iOS based devices. Google Fiber is already competing with AT&T, Comcast and CenturyLink, in limited areas in the US, where this service is available.
  • The revenue from TV advertising worldwide will reach 172.5 billion US dollars in 2015 and is expected to grow to 204.1 billion by 2019. Google will target to grab as much portion of this as possible.

The idea is, as Google got handset users through Android, they will get TV viewers through Google Fiber.

 Android

Google will utilize Android for their future revenue prospects and find ways to take Android to other devices. Though market share of Android devices grew to 80% in 2014, it has slightly come down to 78% as of May 2015. Google has already announced Android wear, Android TV and Google Glass. It will take another 2-3 releases time for Google to launch automotive mode of Android due to reasons discussed in Android in Automobile – Android M. Till then, Android Auto may keep improving. Google announced Brillo OS based on Android for M2M/IoT devices and thus, Google will strive to increase footprints of Android, as Android-based devices can have default search engines like Google.

There are other projects like Project Loon - enabling internet access in remote areas, and Project Ara - through which Google plans to host hardware store.

With an attempt to have an independent focus on all existing and new businesses, Google has become part of a bigger company - Alphabet Inc – attaining an independent entity much like YouTube in 2014.

Google has evolved and is more than just a search engine. It is adding value to millions of lives through innovation, advanced technology and products like Google Chromecast and the recent, Google On-hub Wifi Router (to enter the retail space). Google is spreading its wings across all domains, for example, life sciences, and it will be interesting see to what all areas they can get into successfully.

Author: Krishna Kishore – Senior Architect,  ERnD Practice

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