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And that's a fair response to the question. But it is true that the vast bulk of their revenue does come from ads. So it gets complicated. If you were to take
by bena 4y ago
And that's a fair response to the question.
But it is true that the vast bulk of their revenue does come from ads. So it gets complicated.
If you were to take away their non-ad revenue, Google would be fine-ish. If you were to take away their ad revenue, Google would be in serious trouble.
Compare with Microsoft. Their biggest revenue source is Cloud services. And that's only about a third of their total revenue. And it also includes "server products".
Why is Google unable to diversify to the level of Microsoft? The products are ostensibly there, they just can't make money from them. Or the only money they can make from them are by virtue of selling ads on them.
- jsnell 4y agoDiversification takes time. In 2011, their non-ads business was about $1 billion / year. That revenue has grown by 60x in 11 years, so about 50%/year growth for more than a decade. For most businesses those numbers are an amazing success story. It's only in comparison to the once-in-a-lifetime search ads business that this would look disappointing. Microsoft already had diverse businesses 40 years ago, and have "just" needed to maintain that. They're now diverse by default as long as not too many of those existing lines of business fail. No matter how successful a new business of theirs is, it's really hard for it to grow fast enough to threaten that diversity.