The Future of Google
Google’s future, strengths, and eventual downfalls
We are entering an era of unparalleled tech dominance. Companies like Google, Amazon, Facebook, and Apple control more and more of our everyday lives, owning our data and everything around it. The inherent network effects and flywheels these companies built are unprecedented both in their scope and ability to stave off competition.
This is the second in a series of in-depth articles breaking down not just the strengths and weaknesses of today’s top companies, but also speculating on future opportunities and acquisitions to help start-ups and investors plan accordingly.
Gods of the Valley - A SeriesPart 1: Amazon Eats the World
Part 2: The Future of Google
Part 3: Facebook: The King of Communication
Part 4: Apple's Greatness Is Fading
Today we are talking about Google, and this one is going to get dirty. So grab your coffee, take a seat, and let’s go.
Google Is God
In 1998, the world changed forever when two crazy nerds in a garage rewrote our idea of the internet. What was once a disorganized mess of information suddenly had structure. Imagine a library without a filing system. That was more or less the state of affairs.
Google revolutionized search, bringing reputation-based ranking to the results. And while the algorithm was anything but perfect, the network effects and perpetual tweaks continuously improved the results, resulting in the internet of today.
Now you ask Google (i.e., God) a question, and you get an answer. It is your go-to source for information and one of the few universally recognized words: “Just Google it.”
To understand Google and see where the company is headed, it is important to understand its constantly morphing and expanding structure.
In 2015, Google officially became Alphabet, an overarching entity to let the many business units move faster and more freely to speed innovation.
And, of any company today, Google is one of the most complex. These various entities are broadly divided into:
1. Core Google products (the “Alpha Bets”)
These include (click to jump to section):
2. The “Other Bets”
While a bit further removed from the core of Google’s product, the Other Bets include an impressive range:
It is a mouthful. For a company focused on search, they sure do a lot. Don’t worry; we will break down each of the core areas to paint a better picture.
Core Google Products (the “Alpha Bets”)
At its heart, Google is an information company. What started as a mission to catalog the world’s information has, over time, expanded to include, in essence, owning the internet. Google’s various products all focus on owning user attention, most of which is monetized via advertising.
1. Search: #1 search engine
Google is the dominant search engine.
77% of global searches go through Google. Take a moment to let that number sink in.
Although 1.3B people (there are only 7.6B people globally) live behind China’s Firewall, Google still owns over ¾ of the search engine market. This dominance has fueled Google’s historic rise.
This power is problematic though. 86.5% of Alphabet’s revenue comes from advertising, primarily search ads. Of course, Youtube and Gmail ads plus AdSense make up a portion, but the lion share comes from search ads.
Talk about all your eggs in one basket … we’ll continue this thread later.
2. Gmail: #1 email service
If you’re reading this, you are probably a business person or techie. Either way, you understand the importance of email (unfortunately).
While exact stats are sketchy (ability to own multiple emails), studies show that 60% of users use Gmail as their primary email. And while Google is clearly the dominant email service provider, this isn’t a big revenue driver for the company (especially after both infrastructure and employee costs).
And, honestly, when was the last time you clicked an ad in Gmail?
3. Youtube: #1 video platform
Youtube is the second-largest search engine in the world and easily the largest user-generated video platform. Users upload an impossible 100 hours of content to Youtube every minute. Considering Google only paid $1.65B to acquire YouTube in 2006, that is one hell of a deal.
And while specific stats on Youtube’s contribution to the bottom line are not publicly available, Credit Suisse believes that in 2015, Youtube and Google Play accounted for ~15% of Google’s revenue (up from 4% in 2010) and forecasted to reach 24% by 2020.
4. Google Chrome: #1 internet browser
Chrome is far and away the most successful internet browser, owning over 60% of the world’s web browser market. And while Chrome doesn’t generate revenue, it generates mountains of data—and saves Google a fortune.
In 2013, Mozilla brought in $314M, 97% of which came from advertising royalties (setting Google as default browser). With between 5–15% of the global market (depending on the source), this means Chrome’s 60% market share would save Google ~$1.3-3.8B per year (assuming Mozilla’s royalty fees are roughly the same as other browsers). As market leaders traditionally warrant high multiples, this means Google Chrome’s division would be a massive standalone company on its own, without even taking into account the data value.
5. Google Maps: #1 maps program
While not technically a revenue-generating part of Google’s business, Maps makes up a core piece of Google’s ecosystem and is incredibly valuable.
Advertising is a game of data. The more data (especially locational data) a company has, the better its targeting. Remember, Google wants to own the internet and customer attention.
And while iPhone users are traditionally incredibly loyal to Apple (often to their detriment), studies show that more than 70% of iPhone users prefer Google Maps to Apple Maps.
Google is now also experimenting with new ways of monetizing Maps, both with “book an Uber” buttons and likely many future locational advertisements as well.
6. Android and Google Play: #1 mobile OS
In 2005, Google quietly acquired Android for a reported (unverified) $50M. What seemed at the time a foolish, overpriced bet has paid for itself hundreds of times over.
Google’s acquisition of Android served two primary purposes: saving money (realized later) and potential future growth.
In 2007, Steve Jobs introduced the iPhone. After this, the world changed. And because Apple owned the smartphone market, Google got hit with the Apple tax. Basically, Apple charged Google a percentage of iPhone ad revenues to let Google be the default search engine, costing Google a fortune in lost mobile revenue.
(Note: Today Google paid Apple $3B to be default iPhone browser; imagine if Apple owned the entire market…)
Android changed the game. Now 80–88% of phones sold every quarter are Androids. Let’s face it, iPhones are too expensive for the worldwide mass market.
Thanks to this foresight and dedication to the Android ecosystem, Google leads mobile ad revenues with 35% of the market worldwide ($49.7B).
And that is without even addressing the app store, Google Play. Google’s third-party developer ecosystem is thriving, adding approximately $9B to Alphabet’s 2017 bottom line.
7. AdSense: #1 display advertising network
The other piece of Google’s advertising supremacy is their partner network, AdSense. AdSense allows sites to monetize through Google’s advertising platform without worrying about the back end or finding advertisers. Instead, Google handles everything and takes between 32% and 49% of ad revenue (the rest going to publishers).
According to Investopedia, AdSense revenues accounted for $15.5B, i.e., 23% of Google’s total revenue in 2016.
Unfortunately, advertising as a business focuses on eyeballs over quality, leading to much of today’s deterioration and clickbaity titles. I don’t see the advertising model changing drastically anytime soon, meaning Google’s great success with AdSense is likely to continue (and grow).
8. Google Drive: #2 cloud storage service
In 2012, Google decided they needed to compete with Dropbox and Box. The cloud storage market was taking off, and Google (the best possibly positioned company for this space) was late to the game.
Today, only Dropbox has a larger share of the market. And while cloud storage fees are relatively low, $1.99 per month for 100GB, those add up as more and more users back up everything online.
And the big value add is Google Docs. Online, editable documents and folders allow individuals and teams to store and edit everything in the cloud. I have spilled enough cups of coffee to understand the importance of a backup.
While less dominant with today’s corporations, studies show that:
“When students write papers by themselves, only 12 percent use Google Docs. But when students write papers in groups — when they collaborate — 78 percent use Google Docs. On the other hand, 80 percent of students use Microsoft Word for individual work, and 13 percent use it for group work.”—Recode
As more and more millenials enter the workforce, expect this trend to intensify as more individuals and organizations take to Google’s Cloud for all their documents and collaboration (providing a potentially lucrative growth opportunity for the company).
Google is also rapidly expanding its B2B Cloud infrastructure, but with only 3.95% of the market, they have a long way to go to catch Amazon, creating massive growth potential in this $25B+ market for IaaS (infrastructure as a service).
Google bought DeepMind, a London-based AI research lab, in 2014, for a reported $500M. While the division doesn’t seem to bring in revenue, artificial intelligence is one of Google’s strongest and most defensible moats, making this a smart acquisition with huge potential ramifications for Google’s future success.
Google makes so much money, they don’t know what to do with all of it. That said, they are also justifiably worried about the state of their advertising monopoly.
Voice-based search threatens to erode much of the conventional search market, meaning Google could be in trouble.
All of these divisions are focused on future growth and innovation and likely hold many of the keys to Google’s future dominance.
In 2016, Google spun Waymo, its self-driving car initiative, into a standalone company. Widely recognized as one of the leaders in autonomous driving, Waymo could be the big win Google needs.
Waymo is currently suing Uber (another of the top autonomous contenders) for $2.6B in damages related to IP theft.
This is very relevant given the race for the OS (operating system) of autonomous vehicles will likely be a winner-take-all (or most) scenario.
2. Google Ventures and CapitalG
The other great thing about having a war chest is the ability to bet on the future. Google Ventures (GV) is Google’s venture capital arm (a $2.4B fund), focused on investing in the disruptive and game-changing companies of the future, buying exposure to fast-growing industries.
GV not only presents great opportunities for future partnerships and/or acquisitions (like in the case of Nest) but diversifies Google’s risk across a portfolio of winners.
This strategy of redeploying wealth into the ecosystem not only furthers tech and economic development worldwide but ultimately creates a scenario where it is hard for Google to lose, regardless of Google’s fate as a company.
Moonshots are something only start-ups typically attempt. Google, however, flips the script, studying nearly impossible problems to try to create the transformative businesses of the future.
When pairing near-infinite money with the brightest minds in the business, this can create huge returns. And start-ups/venture is a game of limited risk and unlimited upside.
For instance, Waymo was a GoogleX spin-out, which according to Morgan Stanley could be worth upwards of $70B by 2030. If the driverless market turns out as I see it, and Waymo is the one that wins, this is a massive undervaluation.
Considering Google only invested $1.1B in autonomous vehicles between 2009 and 2015, this would be a 70x ROI—a huge win.
Other GoogleX projects include remote access wifi via balloons, autonomous drone delivery, Google Glass (ultimately an overhyped failure), and dozens of other projects, any of which could go big.
4. Nest and Google Home
The internet of things is here to stay. Connected devices are coming online at an unprecedented pace—the IHS forecasts more than 75 billion devices by 2025.
Google wants to be the at center of everything. And their progress in voice computing and machine learning has set the company up to do just that, though, currently, Amazon is well ahead.
This battle is important because it is for the hearts and minds of consumers. Attention and information are power, which translates to money.
And, as home computing and connected devices become an increasingly large part of our everyday lives, the value of this space explodes. From both a data and an upsell perspective, this space is forecasted to grow five times in the next ten years.
And, as the value of connected networks typically increases proportionally to the square of its nodes, we could be looking at as much as a 25-time increase in the IoT market in the coming decade.
This, combined with the absolute nature of Voice (i.e., there are no second and third search options—see “Voice replacing search” below), creates a true winner-take-all market where network effects associated with NLP (neuro-linguistic programming) and AI-based speech recognition mean that neither Amazon nor Google can afford to lose this race.
Google’s Greatest Challenges
Despite Google’s success, the business has several big problems. Alphabet’s ability to overcome these will dictate the success (or failure) of the Googly experiment. (These are in no particular order.)
1. Voice replacing search
“Ok Google, I don’t want to hear another ad.”
Voice is a paradigm shift, especially for Google. And it is ironic. Google is the leader in voice and NLP, clearly outperforming competitors like Alexa, Cortana, and Siri (a joke) in the fields of voice.
But that raises a bigger question: What happens to search results and paid ads without the screen interface? Will Google just read ads all day like Billy Mays? Or is there an ounce of integrity left?
That is the question.
Currently, Google overloads search results with shitty ads. But in Voice, there is no page two, page three, or even a second result. It is winner-take-all. You don’t want some device reading out a million options. You want the best option, and you want it immediately.
So if Voice disrupts Google’s core search business (61% of their overall revenue), the business fueling their driverless cars, their Wi-Fi balloons, Google Ventures, and all of Alphabet’s interesting arms, how can the company survive?
This is a big problem because … Amazon doesn’t need Google Ads.
Amazon no longer needs to advertise on Google. Amazon is organically outranking everything and has a massive base of customers who consistently shop on Amazon.
That spells trouble for Google. Amazon accounts for a huge (yet ever-dwindling) portion of Google’s revenue. In 2013, Amazon spent $157.7M on Google ads. By 2016, their marketing spend was up to $7B. (Sources: DigitalStrategyConsulting, BusinessInsider.)
3. Weak leadership
Google’s too nice. The management team lacks the killer instincts needed to win.
Look at Facebook. Prior to 2012, Google owned online advertising. They let Zuckerberg and Sheryl Sandberg come in and steal their lunch. Facebook was valued around $50B in the summer of 2012, right after its IPO. Google could have (and should have) forced a hostile takeover.
From then on, Facebook stole ever-larger shares of the digital advertising market. And then they acquired Instagram. How did Google let that happen?
And don’t even start on Amazon. Amazon used to be one of Google’s biggest advertisers—until they didn’t need them anymore. Google let Amazon build an e-commerce monopoly (and search engine), effectively cutting Google out.
Google should have made a serious e-commerce play years ago. Instead, Google recently partnered with Walmart.com—talk about a match made in hell. Both companies couldn’t care less about the other and realize the futility of working together, but what option do they have? Google needs an e-commerce play. And Walmart can’t figure out acquisition and growth against Amazon. This is two drowning people pulling each other down.
4. Poor hardware performance
For years, Google has been trying to diversify and add hardware as a core component of their business. It hasn’t been working.
Google sees Apple owning the customer and creating the world’s most valuable brand with basically just an iPhone and asks itself, “Why can’t we do that?”
Yet despite huge budgets and smart folks, most of their efforts have fallen flat (in terms of sales) and been seen as mainly “me too” products: Pixel phones, PixelBuds, Chromebooks … the vast majority have not been huge commercial successes. And let’s not forget Google Glass.
On the whole, Google has proved mostly ineffective in building, shipping, and marketing hardware products.
The last big threat Google currently faces comes from regulators. While the EU has already slammed Alphabet with a record $2.7B fine, there will be more in the pipeline. Combined with GDPR coming to Europe and the US’ realization that sites like Google and Facebook helped Russians influence the election, governments around the globe are starting the question the power of internet companies.
While Google will almost certainly escape these unscathed due to mutually assured destruction, public sentiment is turning against tech companies, hence why Google (and other tech companies) are starting to outpace Wall Street in lobbying.
The wealth divides and stratification of society are creating potentially big problems for business. Wonder what 2018 holds.
Google’s Growth Opportunities
Luckily, Google has some game-changing opportunities ahead (again, in no particular order).
1. The OS for autonomous vehicles
We are racing towards a driverless world of transportation as a service. Google/Waymo is uniquely suited, especially considering their partnership with Lyft (among many other ride-sharing providers) to dominate this market.
In summary, autonomy will free 52 minutes per day for the American commuter. And as autonomy progresses, the business opportunities and transformation of traditional space/real estate will represent trillions in untapped value. Sleep your way into a new city, grab fast food (or fine dining) at 80 m.p.h., plug into VR while driving cross-country …
While it is impossible to predict the rate of adoption of autonomous vehicles due to regulatory concerns, no one disputes that this technology will change the world. There are 1.2 billion cars worldwide. That is an enormous addressable market. Autonomy is interesting …
2. Expanding Google Play Music
It is surprising how little Google has done with paid content. Specifically, a low cost (or ad monetized) music streaming service could be hugely profitable. More than 80% of phones worldwide are Androids.
You would think Google could create an effective competitor to Spotify, Apple, and Amazon. Yet, they just haven’t. Spotify will be IPOing soon, with a valuation likely north of $19B. That isn’t chump change.
Seems like Google should get their act together.
3. Expanding YouTube Red (Subscription Video)
YouTube is the second-largest search engine in the world and easily the largest video platform. And despite Google’s video dominance, with one billion MAUs (monthly active users), Google is again getting killed—I am starting to sense a theme.
There is so much potential here. Netflix alone is valued at $94B. And the market for quality video content is constantly increasing. Content (and attention) is king, and video, more than any other medium (short of VR), completely captures attention.
Netflix will spend $6–8B on original content in 2018. In 2017, they produced 1,000 hours of original programming. And with shows like “House of Cards,” “Orange Is the New Black,” and “Narcos,” Netflix is nailing the content.
Even Amazon and Apple are betting big on original content, with $4.5B and $1B budgets respectively this year.
People pay for quality content. Subscription revenue trumps ad dollars every day.
4. Blockchain-focused fund
2017 has been the year of blockchains and ICOs. The crypto world has seen an explosion of decentralized fervor (and crazy speculation) where projects looking to (or at least promising to) create the internet of the future have raised massive sums of money to build large decentralized networks.
And while much of the hype is just that, the potential of blockchain technology is truly transformational and disruptive.
Although Google is one of the incumbents many crypto projects are looking to unseat, they have an interesting opportunity to play in the space.
If decentralized technology does displace many of today’s centralized incumbents, it makes sense for Google to hedge their bets and invest in the most promising blockchain companies. Much like Google Ventures, a long term crypto-focused fund could set Google up with potential partnerships or ownership of the industries of the future.
Google has a huge war chest. It’s time they do something with it. According to SiliconBeat, as of May 2016, Google had a whopping $73.1B in the bank (59% of that overseas).
Who should Alphabet acquire to set themselves up for future success? Here are some hints (in no particular order).
Google gave the reins of the economy to Amazon, allowing Bezos to buy his way to monopoly.
Despite Amazon’s massive lead, accounting for 44% of US e-commerce sales in 2017, Google still needs a play here. And the Walmart.com partnership is a joke.
At this point, it is probably impossible to beat Amazon at its own game. Instead of a single platform play, Google should build several niche verticals—specifically those Amazon struggles with. Three in particular with huge potential that currently outperform Amazon are Etsy, Kickstarter (or Indiegogo), and Wayfair.
Etsy (market cap $2.38B) is an established, growing handmade craft and design marketplace with 1.9 million active sellers, 31.7 million active buyers, and over 45 million products on the site. In contrast, Amazon is almost 100% manufactured products and thus a very different segment of the market for both buyers and sellers.
Kickstarter and Indiegogo are two of the biggest names in crowdfunding. And while finding valuations for each is challenging (Kickstarter is a public benefits corporation and IGG has not made revenue numbers public), either could likely be purchased for under a few billion. And owning the innovator’s platform creates plenty of opportunities, especially as the start-ups graduate to big boy business.
Wayfair (market cap $7.52B) is the final e-commerce company Google should acquire if they are serious about competing with Amazon. Wayfair is a massive furniture and home décor company (think IKEA online) with the last 12 months’ revenue exceeding $3.13B (as of Q3 2016).
Wayfair’s unfair advantage is in its furniture lines. I have seen Amazon struggle with furniture. The size, cost, and logistics nightmare of shipping sofas and beds has made it hard for Bezos to build his everything store.
It helps that all three of these brands are based on the East Coast (NYC for the first two and Wayfair’s in Boston). This proximity allows for resource sharing and productive synergies across the organizations, especially with Etsy and Wayfair, which have very similar target markets.
Combining this with Google’s ability to run free advertising for the platforms could help all three brands thrive and build large, defensible moats before Amazon has the chance to act.
As Google builds up a portfolio of successful e-commerce companies, they could either acquire additional verticals or spin off experienced teams to focus on other opportunities.
2. AR/VR Platform/Stack
There is a non-negligible chance that the internet’s next wave will be based around augmented and/or virtual reality. A company at the cutting edge, like Google, should focus on its OS approach in facilitating (and controlling) this transition.
In business, true wealth accrues not to the first movers or to the businesses but to the platforms.
The company that builds the platforms, interfaces, and mediums of exchange that facilitate augmented and virtual reality start-ups (and companies) will be the one that wins.
While plenty of companies are fighting to be the goggles of the future, this isn’t an exciting battle, or one Google can win (see issues with hardware). Instead, Google should focus on building/acquiring the infrastructure and services needed to support this new wave of innovation—think the Youtube, the App Store, or the AWS of AR/VR (likely with B2B- and B2C-facing platforms).
I am not qualified to assess the top players. Google, however, has the insight, expertise, and distribution needed to turn a tiny platform into a mainstream leader.
Here are some potential candidates (specifically VR platforms), courtesy of ThinkMobiles. If I were Google, I’d look at Boost.VC portfolio companies.
As host of The Syndicate podcast and a fan of numerous tech, VC, and blockchain-based shows, I’m bullish on podcasting. That said, the numbers speak for themselves.
While not hugely lucrative (due to inefficiencies in the system), 21% of individuals over the age of 12 listened to a podcast in the last month—that’s 57 million Americans (and growing rapidly). Attention and advertising dollars are flooding the space.
The biggest challenges today are the complexity of advertising and lack of analytics. Unlike most digital advertising, it is hard to set up and measure podcast advertising. You don’t know where listeners drop off or if they even heard the ads. And finding/onboarding publishers is a one-off process requiring significant time investment.
There is no simple easy-to-use system for buying and selling podcast ads.
This is something Google excels at and should implement into their system. To effectively do this, Google needs to acquire verticalized ownership of both the podcast hosting companies and the podcasting apps.
Outside of Amazon, the two largest podcast hosting providers are Libsyn and Blubrry. Neither has publically disclosed venture funding, and thus they should be easy/cheap to acquire.
And on the consumer-facing side, ownership of distribution/podcasting apps is key. To be on the safe side, Google should acquire each of the top three to five podcasting apps by number of downloads. For all future versions of Android, just make one of these the default podcasting app.
These five to seven acquisitions shouldn’t cost more than several hundred million. And once Google owns the distribution, they can create a podcasting analytics platform and integrate podcasts into their advertising engine.
When that happens, more and more money will pour into podcast advertising for its targeted, long-form engagement, likely leading to exponential revenue growth.
Here is the thing, though: Podcasting ads outperform traditional advertising. The reason is simple; the listener knows, likes, and trusts the host. After spending countless hours “with” them, it feels like you know them. So podcast ads are more engaging and trusted than other forms of traditional advertising.
While average ad recall from print and tablet-based magazines is 52%, podcasting has demonstrated recall rates of 89%—a 71.1% improvement over the mean.
The results are even more marked versus full-page takeover display ads on mobile (45% recall) and desktop (35% recall), with listeners saying they were 56–61% more likely to eat at the restaurant mentioned.
And since weekly podcast listeners listen to an average of five hours and seven minutes of podcasts per week, there is a huge amount of monetizable, highly focused customer attention that Google could easily take advantage of.
3. Enterprise Cloud Services
I’m not qualified to speak concerning who Google’s Enterprise Cloud Services division should buy, but considering that they are being clobbered by Amazon and Microsoft, it seems logical that they need help.
As Infrastructure as a Service approaches a $75B market in 2020, Google’s pathetic sub-4% market share becomes a big concern for them.
Here is more information from Goldman Sachs on the possible candidates.
4. Wild card 1—ride-sharing
We spoke previously about the possibilities of autonomous vehicles. While Google could work with existing providers, owning the entire operating system would prove significantly more profitable.
In this instance, acquiring Lyft could be a big bet on the company’s future. Lyft’s most recent funding round valued the company at $11B. While this is a sizable sum, Lyft’s existing network effects and customer base are quite valuable.
With over 700,000 drivers, more than one million rides per day, and between three to five million MAUs (monthly active users), Lyft is approaching 1/3 of the US ride-sharing market. And while significantly less successful overseas, this acquisition would be a US play first and foremost.
Combining Google Maps with Lyft ride functionality and free search and in-app advertising for Lyft, Google could greatly help Lyft close the gap on Uber (especially thanks to Uber’s numerous transgressions).
But winning the ridesharing market isn’t the point; the point is autonomy (and upsells). See this post for a more in-depth analysis.
The money isn’t in the fares; it’s in the business around the experience. That could be Google’s big business of the future.
5. Wild card 2—Telco
Imagine if Google owned Sprint. While easily the smallest of the US carriers, Sprint still has 50.4 million customers. And Google owns Android. How hard would it be to offer Android users free services or switching bonuses? They could probably even use push notifications.
And if every Android phone came with a free two months of Sprint coverage, do you think many users would switch later on? I doubt it. Now, in the US, this is challenging due to the restrictive, long-term contracts and upgrade costs. But with Google’s economic backing and ability to reach consumers, Sprint could switch to a more customer-friendly monthly or yearly subscription model and still make great money.
And Google could add free Sprint advertising to search results.
“Best mobile carrier—Sprint” could show at the top of the results every time and be completely free.
While Sprint’s valued at $22.76B, this would be doable for Google. The impact on existing service providers would be huge. And because Google could better monetize via ads (even on iPhones), Sprint could charge lower fees and still make great money, causing users to switch to Sprint, greatly increasing the value of the acquisition and crushing competitors in the process.
And of course, Sprint would focus on selling Google’s hardware over Apple’s. This could make up for Pixel’s poor sales performance with better in-store sales and focus and bundled discounts.
Plus as net neutrality dies (I hate it but at the same time … ), imagine the possibilities for a Google-Sprint supercompany. Zero-rating will probably be the first (and hopefully only) impact of repealing net neutrality.
With a merger in place, zero-rating Youtube, Gmail, and Google’s other properties would greatly increase traffic/usage from Sprint customers. And plenty of others would sign up for Sprint for just this reason. Google is basically the internet for many people; zero-rating would make it free.
Google is a once-in-a-generation company and a driving force behind our world and economy today. As we race into a future full of paradigm shifts, the question for Alphabet’s leadership becomes how to extend their dominance and market leader status.
There are many challenges for Google in the coming years, but equally promising opportunities.
While I’d love to Google an A, I can’t. Given the inherent risks associated with their primary business and the upcoming paradigm shifts of Voice and/or blockchain technology potentially disrupting their core, I am forced to give Alphabet a solid B+. While not quite as impressive as Amazon’s A, Google is easily one of the best businesses in history. (For more on Amazon, see this analysis.)
If an A+ is a near-infinitely defensible business, a B+ isn’t all that bad.
Ten years from now, which tech giants will dominate the world? And how will humanity and society have “evolved” over this timeframe?
These are the big questions facing entrepreneurs and investors today. But with chaos comes opportunity, and the next ten years will redefine the world as we know it (and likely the human species).
Will Google still be at the forefront? I don’t foresee Google making the acquisitions suggested above. Instead, I see Google becoming the 2008 version of Microsoft, a shadow of its former self.