Feb 04, 2022 12:40:00

In terms of revenue structure, 98% of Facebook and 81% of Google depend on advertisements, making them vulnerable.

Of the five '

Big Tech ' companies that are expanding their business on a global scale, Alphabet (Google under the umbrella), Amazon, Meta (former Facebook), Apple, and Microsoft, Alphabet and Meta have three other profit structures. It is pointed out that it is a little different from the above, and that it is 'vulnerable'.

Facebook and Google's Ad Addiction Can't Last Forever Thanks to TikTok, Web3 --Bloomberg
https://www.bloomberg.com/opinion/articles/2022-02-03/facebook-and-google-s-ad-addiction-can-t-last-forever-thanks-to-tiktok-web3

The 'vulnerability' of Alphabet and Meta is that they have not been able to diversify their business and rely on digital advertising.

Alphabet's 2021 annual sales will be $ 75.3 billion. Advertising revenue from Google search increased by 36% year-on-year, and advertising revenue from YouTube also increased by 25% year-on-year, which is very strong.

Google's advertising revenue for the fourth quarter of 2021 increased 33% year-on-year to $ 61.2 billion (about 7.3 trillion yen), and YouTube's advertising revenue increased 25.4% year-on-year to $ 8.63 billion (about 990 billion yen). ) And in great shape-GIGAZINE

by

Niharb

Sales of Meta, on the other hand, are increasing, but the number of daily active users (DAU) is decreasing for the first time except when it was founded. It is reported that profits are also declining.

Finally, the number of Facebook users declines for the first time, the stock price plummets by 20% --GIGAZINE

Calculated based on financial statements, Alphabet's revenue is 81% from digital advertising, and Meta's revenue is from digital advertising's 98%.

Among Big Tech, Microsoft is a representative of companies that are diversifying their businesses, with over 30% of sales being server products, over 20% being Office products, over 10% being Windows, games and LinkedIn, and others. Business exists. Microsoft has a 20% share of the cloud computing business.

Similarly, Amazon is known as one of the world's largest mail-order and e-commerce sites, but at the same time it is also famous for cloud businesses such as AWS, and it is said that 60% of operating profit is obtained from the cloud.

Google is also developing a cloud business, but its sales are overwhelmingly smaller than those from the advertising business. 'It was culturally difficult to shift to a new business because the cloud business couldn't provide the indicators that the advertising business would produce,' said Sridal Ramaswami, who had a background in managing the advertising business at Google in the past. I'm talking.

The advertising business is stronger than other businesses in the midst of a pandemic, and the growth in 2021 is actually 20%, but according to Mr. Lamaswami, 'The market will soon regain calm and growth will be 1% or 2%. It will be a number, and it will be difficult for the daily return of '20% growth'. '

News site Bloomberg points out that while the situation will be maintained for the next few years, it may change significantly in the next five years.

In the future, when the online platform fundamentally shifts to 'Web3 (Web3.0)', which is a system supported by the blockchain, companies will need to reconsider the business model they have built up so far.