Google's business model

mrochester

mrochester

mrochester

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We all know that Google's primary business is to sell advertising. And that advertising is all the more lucrative and effective when Google know your personal information and location. But what happens when this data is so prevalent that it begins to become worthless? I'm interested to know how Google will deal with the potential scenario of tumbling profits due to the bottom falling out of the advertising market. Will Google be forced to switch to a model where customers pay directly for product they are using (a year/monthly/one time fee for GMail, Android, Search)?

It seems that the world is becoming increasingly aware of the importance of protecting personal data (just look at the uproar over changes to FB terms of service etc) and the ever increasing intolerance of exposure to advertising (adblockers for web browsers and set top boxes that automatically skip adverts) seems to be suggesting that a shift away from advertising supported content could be creeping ever closer.

Personally I can't stand adverts and skip or avoid them wherever possible. Sadly, for those who depend on advertising revenue to make money from me, they are losing out big style, which makes me think this isn't a sustainable model.

Does anyone else have the feeling that advertising supported models are a catastrophe waiting to happen?
 
I'll tell you what though, I'd pay quite a lot for access to high quality customer reviews for products. Something like a mix between Consumer Reports, Amazon and youtube, but consistent high quality that can weed out corporate shills. That's what I go by when buying stuff, not adverts.
 
I don't see advertising changing anytime soon. Companies are always going to have something to sell and people are always going to need to buy things.

Inregards to ad blocking on the internet.... remember that you are posting on a forum attached to a computer hardware shop, so while you might find a lot of people here who ad block, that's not really a fair slice of the makeup of the country. The majority will never have heard of adblock, infact Im quite technical and yet I don't use it personally, so thats another factor. I would also think that ad blocking is likely something that will be a bit of a battle, as I'm sure the content providers will find ways around it, and thus the ad block creators will do the same.

We are also moving to a world now where people are becoming more reliant on phones and tablets than desktop computers for personal use. Many are 'closed' systems, where advertising in Apps is not possible to be circumvented, thus it works out even better for people wanting to buy advertisement space.

Inregards to Television, the latest figures showed that 70 something percent of people still watch the majority of television live as opposed to watching online, or recording on a PVR etc.
 
Nexus said:
We are also moving to a world now where people are becoming more reliant on phones and tablets than desktop computers for personal use. Many are 'closed' systems, where advertising in Apps is not possible to be circumvented, thus it works out even better for people wanting to buy advertisement space.
Click to expand...

This is one of the big issues for Google though - they don't control advertising within apps.
 
manic111 said:
This is one of the big issues for Google though - they don't control advertising within apps.
Click to expand...

They have other big holds in the mobile world though. Some of their apps (maps) have been fundamental.

I was reading only the other day how some tech editor doubted how well windows would be able to do with google announcing it didn't plan to make apps for them.

kd
 
King Damager said:
They have other big holds in the mobile world though. Some of their apps (maps) have been fundamental.
Click to expand...

True, but they'll struggle to monetise that through advertising. A lot of their money will come from licensing those apps out, and cracks are already showing in their relationships with potential licensees. Apple tried (and admittedly largely failed) to release their own map software, and Microsoft have got on board with Nokia's.

I'm not saying that Google is going away any time soon, and their core business of marketing to searchers is going to continue to be lucrative for a while yet. However, figures are backing up the OP's point that companies are bidding less for keywords now than they were a couple of years ago.

Speculation is that people are now using the likes of Amazon as a search engine. Rather than searching for a product on Google, users go directly to Amazon and search for their product there. It's more specialised search, you don't get "junk" results (ie anything which is not a product to buy), it has an excellent recommendation system to show you other relevant products, and it has customer reviews on the page.
 
kwerk said:
I'll tell you what though, I'd pay quite a lot for access to high quality customer reviews for products. Something like a mix between Consumer Reports, Amazon and youtube, but consistent high quality that can weed out corporate shills. That's what I go by when buying stuff, not adverts.
Click to expand...

Isn't that what companies like Which! do?
 
manic111 said:
Speculation is that people are now using the likes of Amazon as a search engine. Rather than searching for a product on Google, users go directly to Amazon and search for their product there. It's more specialised search, you don't get "junk" results (ie anything which is not a product to buy), it has an excellent recommendation system to show you other relevant products, and it has customer reviews on the page.
Click to expand...

I'm not so sure, people are only going to search for products on Amazon, and while I can't speak for other people, I'd say the majority of my internet searching is for non-products (at least, not products that Amazon sell). I do know people, especially 'novice' internet users for whom the big players like Amazon or Play are the 'one-stop-shop' for buying things. But I actually think that over time people start getting more savvy and move towards specialised aggregation search engines to find the best deals (froogle, billy bargain etc). In fact when it comes to financial or more intangible products (insurance, mortgages, holidays, mobile phone contracts, flights etc) I'd say aggregators are the market leaders now or at least heading in that direction fuelled by MSE and word of mouth etc.

Personally, I think Google have potentially missed a trick with Froogle, when it first started it was reasonably innovative, but they they basically left it alone for years then rubber-stamped it and rebranded to Google Products. As a tool it leaves a lot to be desired still and you would have thought they could have developed specialist sections to compete with the other aggregators. I'd have thought they'd have advertisers queueing up to slap their adverts on such a thign.
 
They will spend years profiling you, gathering all your personal information and habbits and then wait for some of you to become rich and famous before selling it all to the highest bidder....*


Mwhahahaha...

*this probably isn't true... probably...
 
I personally believe that people who use add blocking software should be blocked from viewing content which relies on revenue from adds, it's only fair.
 
That's what I do, if I need to buy something I search amazon first. And if I'm at a shop looking at something I check the price and reviews on amazon on my phone. Then I usually just buy the one with the highest stars. I have Prime so its free shipping.

just looking at my order history for the last few weeks:

saw blades
fridge filters
shoes
orbital sander
clothes
poe switch
S3 screen protector
otterbox
vacuum filter
work gloves
lego
catnip spray
french press
coffee
rooibos
obscure german chocolate
tupperware
replacement oven element
garage door openers

so basically everything except groceries (which they do sell in some cities). I heard on the radio they are planning on building a system for same day delivery on most products in almost the whole USA.
 
google isnt just ad's, it sells all its infomation to marketing company's to save them doing the survays themselves. they have accurate information on pretty much everything.
 
I've noticed some good ads I might click lately though since I switched to chrome and havent setup a blocker yet. I was searching prices for a new jacket and now I'm getting all these ads for the jacket on nearly every site now, but it shows the price. So it's actually quite useful, if I see a price I know is good I'll click the ad and buy it.
 
http://www.slate.com/articles/busin...ommerce_giant_will_destroy_local_retail_.html

Bricks and mortar stores complained to the government that Amazon wasn't charging state sales tax because if you dont have a physical presence in the state it's not required. The government forced them to start charging sales tax now to make it "fair", so they said OK... F U if we have to charge sales tax we might as well build facilities in every state and offer free same day delivery. Now all the B&M retailers are crapping their pants lol.
 
"If you give away hot dogs for free, mustard sales will soar"

I always remember reading that quote from a Google VP. Great analogy for their business model.
 
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