Professional Documents
Culture Documents
1 NewYork Times
2 Hitwise 2008
75%
60%
9%
16%
4%
8%
2%3% 1%1%
May 2008
May 2007
Organise information
Give access to
information
Monetise contents
through various
sources of audience
A new information silo: video
search
Next : Speech to text
technology : information
searches within video
contents
YouTube bandwidth
spending estimated to reach
1M$/day
1
Broadcasting of contents
through Google websites as
well as other sites
Revenue sharing logic
Market shares of 5 leading video websites,
United States (may 2008 vs.may 2007)
[%]
2
3
December 2008 Everything you always wanted to know about Google
...
9
YouTube Program Partner :
Payed providers of semi-
professional content
Broadcasting contracts
with major content providers
Encourage content
providers to use the service
Attract as many viewers as
possible
Monetize through relevant
advertising tools
Unlike its competition, YouTube follows an open logic and focuses primarily on
developing content distribution tools :
YouTube acts as the platform of a two sided
3
market composed of content
providers and video seeking users.
Why isnt YouTube a content portal ? (2/2)
2 Clickable text advertising displayed on a video 3 See Annex
Broadcasting videos on
YouTube website and other
Google sites (ex :
Google.com, GoogleNews)
Exporting videos (blogs,
social networks) and
developing API
1
for
advanced broadcasting on
third party websites
Broadcasting on all video
devices : television, mobiles,
multimedia players, video
consoles
Traditional advertising:
AdSense and banners
In-video advertising :
Pre-roll, post-roll, overlay
2
Brand advertising:
broadcasting video ads
within an environment
coherent with the brands
image
E-Commerce: Affiliation of
partner websites (Amazon,
Itunes, video games)
1 Application Programming Interface. Standardized programming protocol allowing applications to communicate
3
December 2008 Everything you always wanted to know about Google
...
10
Why does Microsoft fear Google ?
Googles ambition isnt limited to in browser Web services, but extends to
any online or offline application market.
Google sets out to enter the online application market, MSFTs cash cow :
Google partly destroys Microsofts market when shifting value
from offline to online
Launching of the Office Google
software pack: a word-processor,
a spreadsheet program, a
presentation tool and a calendar
Free alternative to Microsoft
Office pack
Acquisition of SketchUp, a 3D
modeling software with a free
version made available
Disruption of offline application
market segments
Launching of Google Gears:
Open Source project allowing an
offline use of online applications
Claimed ambition of becoming
a standard and encouraging
online languages as opposed to
offline programming languages
Consolidation of the online
environment
4
December 2008 Everything you always wanted to know about Google
...
11
In 2007, Google launched Opensocial : a series of multi platform API allowing
developers to create compatible applications with partnering social networks,
Ex : Slideshare application available on Linkedin and hi5
OpenSocial is not a Facebook competitor but a meta-social network .
Google wants to become the social data search engine and to monetize
this data, leveraging network effects.
Network effects
How Google wants to compete with Facebook ?
Facebooks platform is limited, Googles is the whole Web
5
Network
effects
Network
effects
December 2008 Everything you always wanted to know about Google
...
12
Why is Google buying satellites ? (1/2)
Since 2005, Google has been multiplying investments in all kinds of
infrastructures:
Wifi
Gratuit
Wimax
Backbone
1
Baloon
Wifi
Satellite
60 M$ Investment
Internet access in
developing countries
Partnership
A mobile high-speed
internet access
technology
A 100 M users
market by the end of
2008
100 M$ investment
Expansion of high-
speed networks
Partnership
announcement
Internet access
technology superior to
satellites for isolated
areas
Free Wifi in Mountain View
Investment in Fon: shared Wifi
access
1 Long distance high-speed networks, core of the Internet network
6
December 2008 Everything you always wanted to know about Google
...
13
Internet infrastructures is actually Googles business
infrastructure:
Traffic on Google websites depends on internet infrastructure development and
availability (Backbone, Wifi, Satellite,)
Google has three objectives when investing in the upstream part of its value
chain:
Strengthen and secure existing
infrastructure
Favor high-speed Internet access
Prioritize Internet access for
unconnected countries or populations
Strengthening and securing existing infrastructure
lightens Googles dependancy on its providers
Favouring high-speed Internet access means more
time spent and usage volumes, thus increases
Google services usage
Future web users are Google services next
users
Why is Google buying satellites ? (2/2)
Through infrastructures investments, Google reinforces its traffic providers
and increases access to its services.
6
December 2008 Everything you always wanted to know about Google
...
14
How does Google buy traffic ?
Google asserts its ability to attract users on the sole basis of its services quality and without
turning to advertising Truth is Google largely buys traffic from providers
Firefox: 60 million daily
users in 2008
Google finances 85% of
Firefox in exchange for
having its search engine
embedded in the browser
Browsers
In 2006, partnership
deal with Dell to have the
Google search engine
appear by default on Dell
computers
In 2008, partnership
deal with Apple to have the
Google search engine
appear by default on
Iphones (13 million devices
sold by october 2008)
Partnerships with
manufacturers allow the
search engine to be
guaranteed to in a prime
position.
Manufacturers
Google has the financial power to buy traffic from partners, accessing to
massive audiences.
The Google Toolbar is
part of the web navigator,
which makes Google the
default search engine
Adobe installs it as part
of a package with
Shockwave(2006)
Sun has been installing
it as part of a package with
Java since 2005 (20 million
uploads/month)
Toolbar
In 2005, Google bought
a 5% stake in AOL for 1
billion$ (20 million
subscribers at time of deal)
Google became AOLs
white label search engine
Google expands its
advertising network reach
Portals
7
December 2008 Everything you always wanted to know about Google
...
15
Why did Google acquire DoubleClick ?
In 2007, Google acquired DoubleClick, one of the world leaders in display
advertising :
1 www.attributor.com/blog/2008/03/
Advertising
houses
< 100k
UV
2
100k-
1M UV
2
>1Mon
UV
2
Adbrite 4,1% 4,9% 0,5%
AOL 1,9% 6,5% 5,7%
DoubleClick 9,1% 29,9% 48,0%
Google 71,4% 41,6% 15,8%
MSN 6,6% 6,3% 12,8%
Yahoo 4,7% 7,3% 16,5%
Market shares of main online
advertisers in relation to website
traffic
1
Number of advertisers
T
r
a
d
i
t
i
o
n
a
l
a
d
v
e
r
t
i
s
i
n
g
m
a
r
k
e
t
Banner Market
Text ad market
Ad budget per
advertiser
Google acquired DoubleClick to gain an expertise (display) and global market
shares (highly popular websites)
2 Unique Visitors
Google moves up the long tail
of advertisers
8
To position itself on the banner
market
To reach for highly popular
websites
December 2008 Everything you always wanted to know about Google
...
16
Why doesnt Google monetize all of its
services?
Some Google services are free of charge and monetized through advertising :
Blogger: blog creating tool
Google Health: service for managing and storing personal medical information
GoogleNews: personalized mash-up of news articles and summary
Picasa: photo sharing service
Google SketchUp: 3D model creating tool
Goog-411: phone information service