Every week or so, someone goes out on a limb and says some part of the online advertising industry is about to die, or worse, has already died. Of course, the news is never as bad, as lets say Kim Kardashian dying, but it’s always some alarmist viewpoint that some part of the online industry is in dire trouble. Most recently people have been starting to claim that Google is about to die, if not soon, in the future. Eric Jackson, the founder of Ironfire capital got on TV last week and exclaimed that Google could find itself similar to Yahoo, and on the way out.
The basis of this story was because of Google’s 10% stock loss, which wiped out an amazing $24 Billion in worth – after the third quarter earnings revealed a 20% drop in profits. According to experts, this was purely because of a huge decline in advertising revenue, which had decreased 15% from the previous year.
The reason for the loss in revenue? Mobile. Every report that came out about Google seemed to point to the fact that Mobile is dominating the space, more and more advertisers moving to mobile. What bothers the analysts seems to be a strange idea that this will hurt Google long term, because they are not part of the mobile revolution.
Analysts point that because more and more people are using a mobile device as their main device, and turning to apps for search instead of Google.com, that less and less purchases are being made via these apps instead of via search. Basically, what if people stop using search as much for products, and start just going directly to their favorite store more often, using Amazon’s, Ebay and other companies’ apps first. Additionally, there is something to be said with those who use iPhones which integrate search with apps like Yelp instead of Google first. This is a very, very interesting viewpoint that should be considered.
Whether or not Google is in trouble, is to be seen. It’s clear that mobile marketing, mobile apps are going to slowly dominate more of the market, and that Google online search will be used less. However, the idea that Google, which has a huge share of the mobile market through Android is in enormous trouble because of Mobile growth, is just ridiculous. Google was one of the first companies to embrace mobile and still dominates the search market online. Also, as part of the release, it showed that Google went from 2.5B in mobile revenue, and at its current rate will be at $8B for the total of this year. Not exactly a company with a “mobile problem.”
Mobile will change the equation, but search is a part of our lives and part of how most of us interact. Eventually more and more advertisers will turn to search ads on mobile, and Google will remain a significant part of this market.
