Wednesday, June 1, 2016

Can Google Continue To Increase Revenues?


You've no doubt heard the phrase "nothing lasts forever", well that line works just as well in business as elsewhere. Yet in recent years Google seems to have bucked the boom & bust trend on other online companies and continues to record record revenues.


As this graph from Statista.com shows, Google posted $74.54 Billion in revenue in 2015.
Google's revenue is mainly made up by advertising, of which Google AdWords is a major factor, which in 2015 accounted for $67.39Billion or over 90%. Currently Google is the Internet company with the highest market capitalization, $373Billion - 5 times its revenue.

But the question for me is.... is this rate of growth sustainable?
Or more realistically I think we need to ask at what point Google's revenue slows down as it finds the optimum way to extract money from advertising customers.


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