4 ms·

Why do you say that?

• darawk 8y ago
  Where's it going to come from? Here's the options I see: 1. More users. This is pretty tapped out for Google. Yes, more people will come online in developing countries, but those people will also gain access to say Disney content. So, world GDP growth is already largely priced into the multiple's of other companies too. 2. Higher ad density. I don't see a lot of opportunity for Google to substantially increase it's ad density. Reasonable people might differ here, but I think they're already fairly dense. 3. Higher ad quality / spend efficiency. This cuts both ways for them. Right now advertisers spend a lot of money on AdWords inefficiently. If Google can optimize their spend, they'll pay less in aggregate, but they may be willing to pay more per ad. Which, in turn, will allow the ad density to be more globally efficient, if Google can replace the lost volume with other advertisers who will also pay more. There is probably room here, but it's speculative, and I don't think the growth potential is enormous. 4. Reducing costs. Google's gross margins are already tremendous (63%), you could cut their costs to zero and you wouldn't even double their profit.