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Toughest nut for Google to crack is not penetration but emerging market monetization

Posted on 25. April 2014 Written by Marcel Weiss

Toughest nut for Google to crack is not penetration but emerging market monetization

Horace Dediu:

“The disproportionate weight of US/UK income and the low growth of income from rest-of-world vs. the far faster growth of usage outside the US/UK means that the toughest nut for Google to crack is not penetration but emerging market monetization.

The disparity is enormous. US/UK revenue is on average $86/user/yr (2012) and rising. The rest of the world only manages $12/user/yr. That Rest Of World includes many wealthy countries such as all of Europe and Japan. So the problem for Google is that it has an order of magnitude less income per user in the part of the internet which remains unpenetrated and the trends show that they are not narrowing the gap.”

Filed Under: Links Tagged With: google

Posted on 10. April 2013 Written by Marcel Weiss

Google tries to make a business succeed through having a huge amount of _flow_ in terms of data, traffic, queries and information that is indexed. So think about this idea of them tapping into a vast stream. The more volume that is flowing through the system the more revenue they generate. As so given this very rough analogy I try to sharpen it up by saying: imagine it more as a river. And even more than a river, as a watershed, a river basin. Perhaps a giant basin the size of a continent. The business is, let’s say, capturing fish at the mouth of the biggest river, before it exits into the ocean at its delta. And so your job (as Google) is to catch fish mostly at one point. It’s the most efficient way to catch fish because you have the most flow of water at that point and building nets is not trivial. But in order for you to improve your business, to create more opportunity, presumably, you want to essentially have more water flowing. And so how would you do that? Think of the Mississippi river. If you’ve got a net down at the bottom of the river, the question is how would you engineer, through civil engineering, or shaping the earth itself, a way of catching more fish. The answer I think, in terms of the way Google might be thinking, is that they want to create more sources of water. So they would look to connect tributaries and lakes. “How about having another river join our river?” Let’s make sure that we have “everything east of the Rockies” flow into our river system.

Making rain | asymco

That is a great analogy.

Googles business model puts them in a unique position. Big parts of the web became complementary goods to Google. But that is a concept that is not easy to grasp.

http://newnetland.com/2013-04-google-tries-to-make-a-business-succeed-through/

Filed Under: Links Tagged With: google

Analysis and links to articles on the big picture of the tech industry and the networked information economy.

Author: Marcel Weiss is a writer, consultant and fighter for pareto-optima. He is thinking and linking from Berlin, Germany.

contact: marcel@neunetz.com

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