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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
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.
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)
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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Research Analyst
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