To: HerbVic who wrote (165791 ) 2/10/2014 6:29:29 PM From: Ryan Bartholomew Read Replies (1) | Respond to OT (Answering HerbVic's questions RE Google as part of our discussion how Apple profit stability and valuation compares to Google's)...So what you're saying is that by owning "YouTube, Gmail, Android, and literally dozens of other products," [sic] that constitutes diversification. Perhaps a little, but the business model is still the same. Same as in being revenue from ads, yes. Same as in similar properties/products... not at all. Though they play off each other, especially with the introduction of the G+ layer, one could grow while another could flop and the profits would still flow. In other words, the products provide a ton of diversification within the single business of advertising. If another free email service comes along and gives Gmail a challenge for users, Google could still grow if some of the other products are expanding. It would take a lot of failures to stop the train, and it's worth noting that most of these products are very well established and even increasing in dominance.They provide a free service, attaching ads as a revenue generator. I'm not saying that just anyone can reproduce the model. It would require a well funded public corporation with a great deal of cachet. But, I do think that the stability of the profits are a bit over rated. It wouldn't just be financing; it would require superior products to lure users away. Google's not perfect, but many of the big products are so refined that it would take something incredibly innovative to steal away users and then defend against Google's reaction. Take Gmail, for example. It's huge and free and no other service really has an edge on them, and users are hesitant to change email addresses readily. And, Gmail is tied in with Google accounts, which tie into many of their other products. And, since I'm not as familiar with Google, do you know approximately what the breakdown is between the different revenue resources? I would expect that search is the dominant one with YouTube a distant second followed by fractional contributions from the rest. But, I'm just guessing. If by "resources" you mean revenue types (advertising vs other), advertising is overwhelmingly dominant still. But if you mean resources as in where the ad views/engagment come from, then they're quite diverse. Within Google's own properties, I don't believe they break it down publicly, but YouTube is likely running over $5 billion in revenue already . There's no doubt that Gmail, Maps, and many other products generate a lot of revenue. Also consider non-Google properties, where their AdSense product makes money on literally millions of different properties that use it to make money and then split that purse with Google.
