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The Google squeeze

12/05/2019| 12:35:54 AM| 中文

With the hotel module, Google captures demand more efficiently, making Google search more attractive to end users and transforming OTAs into suppliers.

In 3Q 2014 Google had $16.5 billion in revenue and $2.8 billion in profit. I proceeded to write an article entitled Peak Google. Fast forward to last quarter, and Google had $36 billion in revenue and $6.7 billion in profit, increases of 118% and 139% respectively. It is difficult to imagine being more wrong!

For the record, my thesis was not that Google’s revenue and profit growth were over; rather, like Microsoft in the 2000s, Google would continue to grow but that its relevance had peaked, in large part because brand marketing would become much more important on the web.

Frankly, this explanation makes things worse in a way: it is certainly true that some types of advertising have, as I predicted, worked much better on platforms like Facebook or Instagram (and it’s also true that Facebook gave up on competing for advertising on 3rd-party sites); it is also worth noting that much of that advertising is less traditional brand advertising, meant to increase brand affinity for future conversions, than it is demand-generating direct advertising (as opposed to Google’s demand-capturing direct advertising in Search). What truly misses the mark, though, is the suggestion that Google’s relevance has in any way decreased.

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TAGS: Google | OTA
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