Global digital advertising :

Google grabs one-third of total revenue

This week, the Spotlight falls on Google, the search giant without which most people cannot even imagine what the Internet will be like.

Google (parent company Alphabet) is a search engine, software giant, hardware developer and a general IT tech company based in the USA.

Today, the term ‘Googling’ has entered general use to denote searching for anything on the web on Google’s homepage www.google.com, the most widely visited website in the world.Google’s homepage and various country versions of it such as www.google.lk accept nearly 1.5 billion search requests per day and the search results are displayed in less than a second, depending on the speed of the internet connection. Google Search is also available in Sinhala and Tamil.

Google also owns YouTube, the home of video in the internet and the second most popular site on the web. Google makes most of its income from advertising, especially its AdWords service that offers advertisements related to search results and emails in Google’s own and other websites (through the AdSense network).

Revenue

In fact, the search giant officially earned one third of all digital advertising revenue globally in 2015 - US$ 67.39 billion, though it gets tough competition from Facebook and to a lesser extent, Amazon.

Like almost every other tech company, Google had small beginnings. It was founded on September 4, 1998 at Menlo Park, California, which would also become home to Facebook one day.

Google was founded by Larry Page and Sergey Brin while they were students at Stanford University. They initially wanted to call it ‘Backrub’ but settled on Google, which originates from a misspelling of the word ‘Googol’, the number one followed by one hundred zeros, which was picked to signify that the search engine was intended to provide large quantities of information.

Forbes Rich List

Incidentally, they wanted to sell Google after a few months thinking it was impacting on their studies, but fortunately their offer was turned down. Google floated an IPO in 2004, coincidentally the year Facebook was born.

Both Google founders are now in the Forbes Rich List. Their mission was ‘to organise the world’s information and make it universally accessible and useful’, and its unofficial slogan was ‘Don’t be Evil’.

Together, they own about 14 percent of its shares and control 56 percent of the stockholder voting power. Today, it is headquartered at Mountain View, California in a complex nicknamed Googleplex.

Google invented the Android mobile phone operating system, found on the vast majority of smartphones sold today, whose main competitor is Apple’s iOS.

Google offers the ‘Play Store’ for apps on the Android platforms, though some physical goods are also available. Interestingly, Google has paid US$ 1 billion to Apple to be the default search provider on Apple handsets and iPads, either on Safari or Chrome browsers. Android Wear is a sub-platform for smartwatches. In the US, Google engages in grocery delivery through its Google Express project.

Google also invented the Chrome OS for notebooks, apart from the Chrome web browser for PCs and smartphones. In partnership with hardware companies, Google builds the Nexus series of smartphones. Google also invented the Glass and Cardboard, which are Augmented Reality and Virtual Reality hardware.

Services

Google offers Gmail, the world’s most popular free web-based email service, Google Plus, the Facebook-style social network, Google Hangouts Instant Messaging Service, Google Voice chat and phone service, Google Docs (cloud based office-like suite), Google Photos (photo storage and sharing, earlier Picasa) and Google Drive (cloud based digital storage solution).

The popular blogging site Blogger is a Google offering. Google Earth/Maps is the de-facto standard for smartphone and car navigation maps, while it recently completed mapping in Sri Lanka for its Street View 3-D map service.

Google also offers wire-based (optic fibre) in the US which is to be expanded to other countries.

Project Loon

In the latest initiative, Google plans to offer a cloud-based landline service. In Sri Lanka and Indonesia, Google pioneered Project Loon, a balloon based Internet service.

Google has its own data centres and servers around the world, whose excess capacity is outsourced to other companies, but with revenues of only US$ 1.8 billion last year, it has a long way to go to catch up with Amazon Web Services and Microsoft Azure, the two leading server platforms. Google says it wants to move away from being a search and advertising company to being the biggest cloud service provider by 2020.

Google will help keep your house warm or cold with its Nest thermostats. Google’s Boston Dynamics robotics arm is reported to be on sale due to lack of interest by key Government and private agencies in its canine and humanoid robots.

Google has a dedicated ‘Google Energy’ division for renewable energy. Google also owned Motorola for some time (now it is owned by China’s Lenovo) and apart from the Nexus line itself, Motorola still offers the purest form of Android on Android smartphones.

Artificial intelligence

Google recently made news with its DeepMind Artificial Intelligence Bot which defeated human champions at some board games.

Among Google’s competitors in the search arena are Yahoo (which is said to be up for sale), Microsoft’s Bing/Live, Baidu (China only, where Google is banned), Wikipedia and surprisingly Amazon, where most product searches actually begin.

Yahoo and Microsoft also offer web-based email clients. In August 2015, Google unveiled plans to reorganise its interests as a holding company called Alphabet. When this restructuring took place on October 2, 2015, Google became Alphabet’s leading subsidiary, and the parent for Google’s Internet interests. Google, which has over 70 offices in 40 countries, is recognised as one of the five leading technology companies in the world, the others being Facebook, Apple, Amazon and Netflix.

Google, valued at US$ 500 billion, is often recognised as the world’s second most valuable brand after Apple. Google earned more than US$ 75 billion in 2015 and made a US$ 23 billion operating profit. Its present CEO is Sundar Pichai, who earned US$ 100 million at Google in his first year as CEO. The parent company Alphabet is headed by Eric Schmidt.

Interestingly, Google is one of the very few companies in the world to have a Chief Culture Officer, tasked with maintaining Google’s unique work ethic and culture that has since been copied by many other tech firms.

Next week: Apple