The Final Days of Google is a very interesting take on the likelihood that Google will let its size get to it, no doubt. But much the same way that neither Yahoo! nor Microsoft nor IBM died, but stabilized, the stronger likelihood is that Google will continue to grow, it is, after all, a company that is only 11 years old.
If you look ahead at what can happen over the next decade, chances are that the doomsayers won’t be right, especially when you consider the broader macro-level trends. Sit back and just think:
The year is 2020, the overall US advertising market grew at an average rate of 2.5% from 2007 to 2020, growing from $250B to $400B. Madison Avenue retained some of its aura, especially after MSFT acquired WPP, Oracle integrated Omnicom, and Apple scooped up Publicis. Oh, Interpublic and Havas merged.
Each new behemoth bought a block on Madison Avenue to set up their advertising HQ here. Well, the US HQ anyway, advertising is a truly global venture now, but more on that in a bit.
IN 2020: SIZE OF ADVERTISING MARKET IN THE US
The online advertising market grew at an average growth rate of 25% from 2007 to 2013, from 5.9% of total billings up to 25%. In 2013, the total ad market in the US represented a $338B market, with the digital component getting nearly $85B.
From 2013 to 2020, with the continued growth of advertising, online advertising soared to $100B in the US alone, though it never got more than 25% of the total advertising pie.
IN 2020: US VS. WORLD
The US now accounts but for one third of total advertising. The breakdown is as follows:
- US: 30%
- Asia: 30%
- Europe: 30%
- With South America, Australia and Africa getting the remaining 10%.
As such, the total global advertising market is now a $1.333 Trillion market and coming in at 25% of that, the global online ad market is now a staggering $333B marketplace.
In the US, Google gets 15% of all ad dollars (down from 25% in 2006) - 15% x $100B - or $15B.
Around the World, Google gets 15% of all ad dollars - 15% x $233B - $35B.
This continued the trend started in the early 2000s when Google began to generate more revenues from non-US markets.
In all, Google generates $50B in total ad sales in 2020.
Its hiring spree slowed down once it hit 20,000, and it maintained 25% profit margins, netting shareholders nearly $12.5B in earnings.
In 2020, over 24 years after being founded, Google trades at around 30 times earnings.
Its market cap?
$375B.
[Sounds absurd, but 24 years after being founded, Microsoft boasted a market cap nearly $500B in 1999… today it has settled down to $300B.]
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