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.

The signal and the noise of The Oscars

I'm a big fan of predictive data and analytics, with the statistical findings of Nate Silver being a pet subject.  The ability to see through statistics and see the patterns than some data makes is: part skill, part art and part alchemy.

So it was fun to see that Nate has focused his attention on this weekend's Oscars:
http://www.vanityfair.com/hollywood/2014/03/oscar-winner-predictions-nate-silver

However rather than picking a winner, such as best film or director, the Moneyball statistician has analysed previous films for trends and common themes.

UK Facebook at saturation point

Following on from my recent post about the numbers and demographics of the total Facebook population in the UK, it was hardly surprising to read that various people are now saying that Facebook has reached 'saturation point' over here in the United Kingdom.

As I have been rather busy in the past weeks (a quick hat-tip to Social Media Influence for pointing out this useful article) I missed the blog entry from Robin Goad at Hitwise . It shows that for June 2010 Facebook now dishes up one in every six Internet pages viewed in the UK. It is also only second to Google in terms of visits, with 25 million of them (making up over half of all social media site visits).
Robin then went on to highlight that not only had Facebook's share of the UK page views seemingly stagnated at around 16 - 17%, but that since the beginning of 2010 the average time on the site has dropped from almost 30 seconds to a little over 27 seconds.

Now what does all this mean? Well, here's my thoughts:

1. This point was inevitable.
The astronomic growth in Facebook's (registered) user base cannot grow to beyond the total potential size of the target audience. For an island of 61.8 million people (with 38.3 million of them between 16 & 64) that's a huge percentage of the population covered.

2. Just measuring page views is too arbitrary
Facebook is not just a social media site for emailing and 'following' people. Its a platform for instant messaging, sheep throwing and even gaming (lets not forget that MafiaWars, Farmville and their ilk require constant input to stay in the game). If an activity or game becomes less popular (or 'sticky') this affects the number of page views of the site.

3. Its still about monetisation
Google may be second in page views, but its still top for visits and overall revenue. This is because Google's aim has always been to give people the most likely sites for the search term entered on the first page of results. In selling adverts alongside these results and encouraging the most relevant ones by making it cheaper to advertise them, Google recognises the value in delivering the least number of pages. It is this business approach that continues to give them the revenue it has done so far.

4. Facebook will develop and diversify
Its already decided to go after Foursquare's lunch with its own geolocation service (Facebook Places is currently only available in the USA) and the acquisition of location-based service Hot Potato. However it is also likely to further develop its gaming platform and could well try and push its way into the gambling sector in the USA (Especially should the 4 year old U.S. online gambling ban be revoked any time soon). Perhaps this is why Google has invested as much as $100 million in Zynga, the developers of Facebook games such as MafiaWars, Farmville and Texas Hold'em Poker.....?
Note:
Also check out Niall O'Malley's thoughts on where Facebook could go in this direction.

UK Facebook numbers & demographics

There's been a lot of press recently about Facebook reaching the milestone figure of 500 million users (or 'half a billion' if you want a more attention grabbing headline).

However, when looking for figures specific to the British user-base, there is unfortunately less information around. So I'm therefore grateful to Clicky Media for providing these recent UK statistics (and have unashamedly reproduced their diagrams here for my readers). They mainly give data for June 2010 and show the Social Network's growth despite the recent reports of poor customer satisfaction.....

European Facebook users (from April 2010) total over 110 million, with 24 million in the UK, which makes the UK the largest European user base:


UK Facebook Gender Split is very slightly female orientated (but then so is the UK population as a whole):


UK Facebook Age Split shows the Twenty-somethings have the largest proportion of users, but anyone considering marketing on the social network should obviously not ignore any other age ranges.


Looking at the UK Facebook Age and Gender Split, its clear that female users dominate every age range.