Planet Google 2014

A Research Service By Business Insider

PLANET

Basically, Google is swallowing the world…

Source: Google, 2014 Is An Estimate

$-

$10

$20

$30

$40

$50

$60

$70

2009 2010 2011 2012 2013 2014E

Bill

ions

Google Global Annual Revenue

Google is now bigger than all newspapers, magazines

Source: Google, NAA, PIB

$0

$10,000

$20,000

$30,000

$40,000

$50,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mill

ions

Google vs. Magazine vs. Newspaper Ad Revenue, US Data, 2004-2013

Google (US) US Magazines US Newspapers

Google dwarfs “big media”

Source: Company Filings, BI Intelligence estimates

$30

$18 $16

$14

$5 $5 $3 $2

$70

TimeWarner

Facebook CBS Viacom Gannett Yahoo AOL New YorkTimes

Google

Bill

ions

Estimated 2014 RevenueSelect Media Companies

Google is almost half the size of all global TV advertising

$174

$70

Global TV Ad Revenue Google

Bill

ion

s

Estimated 2014 Ad RevenueGoogle vs. Global TV Ad Market

Source: Google, PWC

Google makes all other digital ad platforms “also rans”

Source: Company Filings Note: Based on GAAP revenue.

Google

FacebookYahoo

AOL

$0

$5

$10

$15

$20

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Bill

ions

Digital Advertising Revenues (Global)

Google’s Chrome browser is crushing Firefox and IE

Source: StatCounter

Other

Safari

Firefox

Internet Explorer

Chrome

Opera0%

10%

20%

30%

40%

50%

60%

2010 2011 2012 2013 2014

Global Web Browser Usage Share

Google’s Android has peak-Windows-like market share

Source: IDC, Strategy Analytics, BI Intelligence estimates

Android

iOS

Microsoft

BlackBerry

Other

0%

20%

40%

60%

80%

100%

1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14

Share

of

Glo

bal U

nit S

hip

ments

Global Smartphone Market Share By Platform

Google93%

Bing3%

Yahoo2%

Other2% Europe Search Market Share

Oct. 2014

In Europe, Google has peak-Windows-like search share

Source: StatCounter

And people are noticing!

Source: StatCounter

(For Microsoft, DOJ attack was the beginning of the end)

Source: StatCounter

Almost all of Google’s revenue still comes from ads

Source: Google

$10.86 $12.52

$15

$0.67 $1.23

$1.84

$0

$3

$6

$9

$12

$15

$18

Q3 12 Q3 13 Q3 14

Bill

ions

Google Revenue By Source

Advertising Other

Mostly search, lots of display, some video…

Source: Google, BI Intelligence estimates

Search

Total Advertising

$-

$4,000

$8,000

$12,000

$16,000

Q110

Q310

Q111

Q311

Q112

Q312

Q113

Q313

Q114

Q314

Bill

ions

Google Advertising Revenue (Global)

Search clicks still growing fast but now decelerating

Source: Google

20%23%

26%

31%

26%25%

17%

Q1 13 Q3 13 Q1 14 Q3 14

Google Paid Clicks GrowthGlobal, Year-Over-Year

US desktop search queries are now shrinking

Source: comScore Note: Explicit user initiated search queries only.

10%

12%

14%

10%

7%

4%

0%

-3%-5%

-7% -8% -7% -7%

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

Total Monthly Search Query Growth U.S., Year-Over-Year; Desktop Only

But Google utterly dominates mobile search

Source: RKG

Bing5.6%

Yahoo8.4%

Google85.6%

Other0.3%

Share Of Mobile Organic Search Visits

US, Q3 2014

Remember when Google bought revenue-less YouTube?

Source: RKG

Now, YouTube dominates digital video

Source: comScore

0

25

50

75

100

125

150

175

Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14

Millio

ns

Unique Video Viewers (US) Desktop Only

Google Sites(YouTube)

Facebook

AOL

Yahoo Sites

YouTube also dominates digital video ads

Source: Company Filings, BI Intelligence estimates

YouTube

Tremor

YuMe

TubeMogul

$0

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014

Revenue I

n M

illio

ns

Global Digital Video Advertising Revenue(Select Companies)

YouTube is closing in on broadcast-network revenue

Source: News Reports, Company Filings, BI Intelligence estimates

$-

$4,000

$8,000

$12,000

2007 2008 2009 2010 2011 2012 2013

Mill

ions

YouTube Ad Revenue vs. Network Ad Revenue

CBS

YouTube

AMC Network

YouTube is even becoming meaningful to Google’s revenue!

Source: BI Intelligence estimates, Credit Suisse Note: Google does not break out revenues for its specific services.

Search Advertising And Other Revenue

84%

YouTube9%

Play7% FORECAST:

Google Revenue Share 2014 (Global)

Remember when Android was a little science project?

Source: Google

Now Android is the dominant global device platform

Source: Gartner, IDC, Strategy Analytics, Company Filings, BI Intelligence estimates

Android

Windows

Apple

BlackBerry

Other

0%

20%

40%

60%

80%

100%

1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14

Global Computing Platform Market Share

Android fragmentation is becoming less of a problem

Source: Google

Froyo

Gingerbread

Ice Cream Sandwich

Jelly Bean

Kit Kat

0%

25%

50%

75%

100%

9/15/12 12/15/12 3/15/13 6/15/13 9/15/13 12/15/13 3/15/14 6/15/14 9/15/14

Jelly Bean And Kit Kat Are Now ~80% Of Android

Android surpassed iOS mobile traffic this year

Source: Net Applications, August 2014

0%

10%

20%

30%

40%

50%

60%

Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

Global Mobile Platform Traffic Share

iOS

Android

Java ME

Symbian

Windows Phone

Other

Android users now consume more ads than Apple users

Source: Opera Mediaworks

Android

iOS

BlackBerry

Symbian

Other

0%

20%

40%

60%

80%

100%

2Q12 4Q12 2Q13 4Q13 2Q14

Share

Of

Tra

ffic

Global Mobile Ad Traffic Share By Platform

Android users are even catching up to Apple in eCommerce

Source: Monetate

$167

$109

$127 $129$120

$107

2.5%

2.1%

1.6%

0.9%

0.7%

0.6%0%

2%

4%

$0

$25

$50

$75

$100

$125

$150

$175

iPad Android Tablet Kindle Fire iPhone Android Phone Windows Phone

Android Catching Up To Apple In E-Commerce

Average Order Value

Conversion Rate

Tablets Phones

Google’s apps are now among the most-used

Source: comScore; September 2014, Age 18+, US Data

73%

53%

46% 44% 44% 42% 41%38%

29% 28%25% 25%

22% 22% 20%

Top 15 Apps By Percent Reach Of Mobile App Users

Google Play is catching up to Apple’s App Store in revenue

Source: App Annie, Jana, BI Intelligence estimates

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

3Q13 4Q13 1Q14 2Q14 3Q14

Bill

ions

Estimated App Revenue

Apple App Store

Google Play

Google Play is paying out more and more to developers

Source: App Annie, Jana, BI Intelligence estimates

Apple App Store

Google Play

$0

$2

$4

$6

$8

$10

$12

$14

3Q13 4Q13 1Q14 2Q14

Estimated App Developer Payout

Google Play will be ~7% of Google’s revenue this year

Source: BI Intelligence estimates, Credit Suisse Note: Google does not break out revenues for its specific services.

Search Advertising And Other Revenue

84%

YouTube9%

Play7%

FORECAST: Google Revenue Share

2014, Global

Google is so wildly successful that it’s

throwing money at the future…

Source: Google

Cute!

Source: Edudemic

(Some) connected cars will be a huge market

Source: SBD, GSMA

In-vehicle Services

Hardware

Telematics Service Providers

Telecom Service Providers

€ 0

€ 10,000

€ 20,000

€ 30,000

€ 40,000

2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E

Mill

ions

Connected Car Revenue Forecast

We Are Here

Smart glasses (If at first you don’t succeed…)

Source: Wikipedia

Smart contact lenses

Source: Google

(Some) wearables poised to grow rapidly

Source: BI Intelligence estimates

0

40

80

120

160

2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E

Mill

ions O

f U

nits S

hip

ped A

nnually

Global Wearable Device Unit Shipments Forecast

Rest Of Wearables Market

Fitness Bands And Other Activity Trackers

Smartwatches

35% CAGR 2014-2019

We Are Here

Home snooping devices

Source: BI Intelligence estimates

Huge growth expected for Internet of Things

Businesses

Smart Cities

ConnectedHome

-

5

10

15

20

25

2014E 2015E 2016E 2017E 2018E 2019E

Bill

ions o

f D

evic

es

Estimated Number of Installed IoT Devices by Sector

Source: BI Intelligence Estimates

Super-fast Internet

Source: The Atlantic

Drones and robot projects, like “Project Wing”

Source: The Atlantic

And balloons bringing Internet access to everyone!

Source: The Atlantic

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Henry BlodgetCEO & Editor-in-Chief

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Senior Research Editor

Marcelo Ballvé

Editorial Director

Cale Weissman

Reporter

Hope King

Reporter

Nicholas Quah

Research Associate

John Greenough

Research Analyst

Jessica Smith

Research Associate

Tony Danova

Senior Research Analyst

Mark Hoelzel

Research Analyst

John Heggestuen

Research Analyst

Cooper Smith

Senior Research Analyst

BI Intelligence

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