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I'm actually a Google shareholder and yes I do expect continued 20% growth, at least for the next decade. But increasing the ad/content ratio is only a small c

by MarkMc 9y ago

I'm actually a Google shareholder and yes I do expect continued 20% growth, at least for the next decade. But increasing the ad/content ratio is only a small component of that growth. Here are my estimates for the major components of Google's revenue growth over the next 10 years: 1. Number of Google users * avg income per user grows 3% per year 2. Time spent on internet by average user grows 5% per year 3. Ad/content ratio gows 3% per year 4. Google ad effectiveness grows 8% per year

tyingq 9y ago
Do some compound interest calculation on some of those and you'll see the problem. Assume they've been doing it for years and years already. There is a hard cap on some of those. Especially ad/content ratio and CTR. At some point, you're done. For many queries, ad/content ratio is already maxed. Like, how do you optimize this further? It's a 2 page ad already, with links out to other ads that pay google. https://imgur.com/a/hAFas https://imgur.com/a/hAFas Also, there is a point where that sours. Some consumers will bail once the ad overhead is too much. Either via ad blockers, or the next "Google".
- MarkMc 9y ago
  I agree Google's revenue will not grow 20% annually forever, but I don't see any problem with my 10-year projection. When I watch YouTube I see about 30 seconds of ads for every 10 minutes of video content. I could easily see this rising to 60 seconds over the next decade. And the ads I do see are not very well tailored to me: I see cat food ads even though I don't have a cat. I see gambling ads even though I've never gambled in my life. I see ads for a sit-stand desk even though I already bought it. I never see MacBook Pro ads even though I put one in my shopping cart on Apple's website 6 months ago but did not purchase it. (Google has all my photos, all my emails and my location history for past 4 years, so Google should know all this). Google has a long way to go to maximize the effectiveness of their ads.

by MarkMc 9y ago

tyingq 9y ago

Do some compound interest calculation on some of those and you'll see the problem. Assume they've been doing it for years and years already. There is a hard cap on some of those. Especially ad/content ratio and CTR. At some point, you're done. For many queries, ad/content ratio is already maxed. Like, how do you optimize this further? It's a 2 page ad already, with links out to other ads that pay google. https://imgur.com/a/hAFas https://imgur.com/a/hAFas Also, there is a point where that sours. Some consumers will bail once the ad overhead is too much. Either via ad blockers, or the next "Google".

MarkMc 9y ago
I agree Google's revenue will not grow 20% annually forever, but I don't see any problem with my 10-year projection. When I watch YouTube I see about 30 seconds of ads for every 10 minutes of video content. I could easily see this rising to 60 seconds over the next decade. And the ads I do see are not very well tailored to me: I see cat food ads even though I don't have a cat. I see gambling ads even though I've never gambled in my life. I see ads for a sit-stand desk even though I already bought it. I never see MacBook Pro ads even though I put one in my shopping cart on Apple's website 6 months ago but did not purchase it. (Google has all my photos, all my emails and my location history for past 4 years, so Google should know all this). Google has a long way to go to maximize the effectiveness of their ads.