Competitive analysis of Online Revenue Market Share
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Competitive analysis of Online Revenue Market Share
- 1. AnuragVerma : 35413 Amol Surwade : 35407 SushantJog : 35481
- 2. Industry Google Google SWOT Analysis Google Porter Five Forces Model Facebook Facebook SWOT Analysis Facebook Porter Five Forces Model Competitive Analysis QnA 2 Agenda
- 3. Online Advertising Revenue Generation through Free Products Revenue Generation through Search Engine Marketing Revenue Generation through Social Media 3 Industry
- 4. Started in January 1996 by Larry Page and Sergey Brin – Stanford University Ph.D. Students Domain name registered on September 15, 1997, and the company was incorporated on September 4, 1998. The company's mission statement "to organize the world's information and make it universally accessible and useful“ 4 About Google
- 5. Name Microsoft Corporation GeographicAreas Covered WorldWide Headquarter U.S. Current CEO Satya Nadella Employees 99,000 Major Competitors Google, Apple, IBM, Oracle, Adobe etc 5 About Google
- 6. 6 About Google What does Google do to sustain
- 8. 8 SWOT Analysis : STRENGTHS
- 9. 9 SWOT Analysis : STRENGTHS
- 10. 10 SWOT Analysis : STRENGTHS
- 11. 11 SWOT Analysis : STRENGTHS
- 12. 12 SWOT Analysis : STRENGTHS
- 13. 13 SWOT Analysis : STRENGTHS
- 14. Increased dominance in Android Market 14 SWOT Analysis : STRENGTHS
- 15. Financial position 18 Market Cap 403 billion Share Price $ 1199 (Approx) Cash, Cash Equivalent and Marketable securities $ 56.62 billion
- 16. Relies on one source of income More than 90% of revenue from Online Advertising Market for personal computers is growing slowly. Desktop search engine market will be impacted Unprofitable Products Patent Litigations Costly and time consuming. Distract the company from innovating 19 SWOT Analysis :WEAKNESSES
- 17. Growing no. of mobile internet users More than 90% of revenue from Online Advertising Patents through Acquisitions. Got 17000 patents from Motorola. Driverless electronic cars Technology can be a huge hit in future and it can sell licenses to car manufactures Extremely Fast Internet Targeting high speed internet speed of 1Gbps in US citities 20 SWOT Analysis : OPPORTUNITIES
- 18. Growing no. of mobile internet users Less space to place adds Add costs less than usual AntiTrust Laws Accused by EU for its dominating position in search engine. Competition from MS, FB, Twitter, Yahoo Windows 8 for Mobile Search engines from Yahoo, MS Add sharing 21 SWOT Analysis :THREATS
- 19. 22 Five Forces Model Competitive Rivalry with in Industry Bargaining Power of Suppliers Bargaining Power of Buyers Threat of New Entrants Threat of Substitute Product Michael Porter’s Five Forces Model
- 20. 23 Five Forces Model Michael Porter’s Five Forces Model
- 21. 24
- 22. Facebook is a social networking website Facebook® was founded in 2004 by Harvard student Mark E. Zuckerberg with help from his roommates Dustin Moskovitz and Chris Hughes. Facebook® was originally developed for Harvard students then expanded to other colleges then to anyone over the age of 18, and now currently to anyone 13 years of age or older. Company Overview: “Facebook's mission is to give people the power to share and make the world more open and connected.” 25 About Facebook
- 23. Facebook’s initial public offering (IPO) less effective than anticipated Profit earned through B2B advertising services Businesses benefit through the use of analytical software built into pages Independently developed applications ensure constant consumer interaction with site 26 About Facebook
- 24. Name Facebook Inc Industries Served Internet GeographicAreas Covered WorldWide Headquarter U.S. Current CEO Mark Zuckerberg Employees 6337 Major Competitors Google, LinkedIn,Yahoo,Twitter 27 About Facebook
- 26. 29 About Facebook In January 2013, the countries with the most Facebook users were: United States with 168.8 million members Brazil with 64.6 million members India with 62.6 million members Indonesia with 51.4 million members Mexico with 40.2 million members
- 28. Relevant and unique services, which surpass competitors like Google+ and MySpace SWOT Analysis : STRENGTHS
- 29. SWOT Analysis : STRENGTHS Date Users (Millions) Growth August 26, 2008 100 178.38 …… …….. ……. May 30, 2011 700 3.45% September 22, 2011 800 3.73% April 24, 2012 900 1.74% September 14, 2012 1000 2.33% March 31, 2013 1110 1.5% Dec 31st, 2013 1230 0.97%
- 30. SWOT Analysis : STRENGTHS
- 31. Financial position 34 SWOT Analysis : STRENGTHS Market Cap 170.76 billion Share Price $ 67 (Approx)
- 32. SWOT Analysis :WEAKNESSSES - Weak CTR of advertisements - Lack some features such as video chat, dislike button, group chats etc - Lack of website customization - Lacks proven effectiveness in advertising in PC version - Constantly drawn into litigation due to patent and privacy violations - Fails to take advantage of mobile version to draw revenue
- 33. SWOT Analysis : OPPORTUNITIES
- 34. SWOT Analysis : OPPORTUNITIES • Mobile advertising o Based on current analytic software on PC versions o Larger return for advertisers o Greater investor strength for Facebook
- 35. SWOT Analysis : OPPORTUNITIES • Retail service integration with social analytics o Current analytics can contribute to consumer purchases o Large consumer base will lead to stronger feedback on products
- 36. Google’s growing social network application Privacy concerns may drive away current consumers As market saturation draws closer, expansion will slow SWOT Analysis :THREATS
- 37. SWOT Analysis :THREATS Facebook blocked in China, Iran, Pakistan, Syria, Uzbekistan in 2007, 2008, 2009 Weak business model
- 38. 44 Five Forces Model Competitive Rivalry with in Industry Bargaining Power of Suppliers Bargaining Power of Buyers Threat of New Entrants Threat of Substitute Product Michael Porter’s Five Forces Model
- 39. Five Forces Model Threats of new entrants Very Low Google+ is the only competitor
- 40. Five Forces Model Threat of substitutes Moderate. Recently acquired Whatsapp Not much threat from Skype Advertising
- 41. Five Forces Model Bargaining power of Customers Significant Power (Since Google may have same customers)
- 42. Five Forces Model Bargaining power of Suppliers Significant Power (Since Users are also its suppliers) Influence ofTelcos
- 43. Five Forces Model Intensity of Competitive Rivalry Very Low Not major players who has that much of strong presence G+ has 1/10th Monthly Active Users only
- 44. 51 Analysis No. of Users Capabilities Strategy Facebook More than 1 billion monthly active users With more than 1 billion users in database, users can connect in better ways. Facebook markets them as a platform that allows users to connect. Google+ An estimated 343 million monthly active users. G+ integrates youtube and android to gain competitive advantage over Facebook. G+ markets them as an extension to other services(gmail,search,video sharing youtube ,photo sharing - picasa) it provides.
- 45. Facebook Revenue $3,000 $2,500 $2,000 $1,500 Facebook Advertising Facebook Other Revenue $241 $218 $214 $256 $213 $1,000 $500 $0 $188 $943 Q4 2011 $186 $872 Q1 2012 $176 $192 $992 $1,086 Q2 2012 Q3 2012 $1,599 $1,329 $1,245 Q4 2012 Q1 2013 Q2 2013 $2,344 $1,798 Q3 2013 Q4 2013
- 46. Google Revenue $18,000 $16,000 $14,000 $12,000 Google Advertising $666 Google Other Revenue $1,647 $1,230 $829 $1,049 $1,046 $10,000 $8,000 $6,000 $4,000 $2,000 $0 $410 $420 $10,174 $10,225 Q4 2011 Q1 2012 $439 $10,525 $10,860 Q2 2012 Q3 2012 $12,076 $11,902 Q4 2012 Q1 2013 $14,073 $12,061 $12,542 Q2 2013 Q3 2013 Q4 2013
- 47. Facebook v Google - Raw Numbers Facebook Google $18,000 $15,720 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 $10,584 $10,645 $1,131 $1,058 Q4 2011 Q1 2012 $12,905 $11,526 $10,964 $1,585 $1,184 $1,262 Q2 2012 Q3 2012 Q4 2012 $12,951 $1,458 Q1 2013 $13,772 $13,107 $2,585 $1,813 $2,016 Q2 2013 Q3 2013 Q4 2013
- 48. Quarter By Quarter Change 35% Facebook Google 30% 25% 20% 15% 10% 5% 0% -5% -10% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013
- 49. Q4 2011 - Q4 2013 Change Facebook Google 129% 49% Advertising Other Revenue Advertising Other Revenue 149% 28% 38% 302%
- 50. Revenue Post-IPO Facebook Advertising Facebook Other Google Advertising Google Other $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Q1 Q2 Q3 Q4 Q5 Q6 Quarters since respective IPOs
- 51. Advertising Revenue Methods PPC (pay per click)- When any one visit your website and make any click on Advertisement, website owner (You) get Rs 10, 12, 15… per click PPL (pay per Lead)- When any one visit your website and make a click and signup in any Advertisement, You get Rs 20, 30, 40… per click PPA (pay per Action)- When any one visit your website and Does any shopping from the Advertisement, You get X% commission on that shopping PPI (pay per Impression)- Some Advertisers want their Brand logo should be seen by visitors on your website, Still they will Pay Rs 10 for 100 visitors, Rs 50 for 500 visitors
Notas del editor
- When a user visits Google.com, he enters a keyword and presses the Google Search button (this is called a search query). In response, Google displays a search results page, which lists web pages relating to the search query. The most relevant page appears first, followed by the second most relevant page, and so on. How does Google know which results are most relevant? The answer lies in Google’s algorithms, which are a set of advanced calculations that help identify the relevancy of results to each search query. Google crawls the web regularly, indexing billions of web pages – similar to the way a library card catalog indexes books. When a user enters a search term, Google scans its vast index and displays the most relevant pages based on PageRank™ and other advanced algorithms. PageRank™ relies on the link structure of the web as an indicator of an individual page’s value. In essence, Google interprets a link from page A to page B as a vote, by page A, for page B. But Google looks at more than the sheer volume of links a page receives; it also analyzes the page that hosts the link. Votes cast by pages that are themselves “important” weigh more heavily and help to make otherpages “important.”
- As previously mentioned, Facebook is currently the world’s most popular social media site with nearly 900 million monthly active users. This popularity has driven them to own 63.2% of the market share of social media services, beating out services such as Google+, Twitter, LinkedIn, and MySpace. They have captured such a large audience very rapidly due to the services they provide. Though others have attempted to mimic the Facebook site, Facebook provides a greater security level than MySpace, has a more user-friendly interface than Google+, and is more practical for the consumer. If the point of the service is to keep your friends and family updated on the latest news in your life, it’s beneficial if all your friends and family are on the same network. With such a current high usage rate, it would be difficult for a consumer to pull away from this service and join Google+ if their family and friends stay on Facebook.
- As previously mentioned, Facebook is currently the world’s most popular social media site with nearly 900 million monthly active users. This popularity has driven them to own 63.2% of the market share of social media services, beating out services such as Google+, Twitter, LinkedIn, and MySpace. They have captured such a large audience very rapidly due to the services they provide. Though others have attempted to mimic the Facebook site, Facebook provides a greater security level than MySpace, has a more user-friendly interface than Google+, and is more practical for the consumer. If the point of the service is to keep your friends and family updated on the latest news in your life, it’s beneficial if all your friends and family are on the same network. With such a current high usage rate, it would be difficult for a consumer to pull away from this service and join Google+ if their family and friends stay on Facebook.
- As previously mentioned, Facebook is currently the world’s most popular social media site with nearly 900 million monthly active users. This popularity has driven them to own 63.2% of the market share of social media services, beating out services such as Google+, Twitter, LinkedIn, and MySpace. They have captured such a large audience very rapidly due to the services they provide. Though others have attempted to mimic the Facebook site, Facebook provides a greater security level than MySpace, has a more user-friendly interface than Google+, and is more practical for the consumer. If the point of the service is to keep your friends and family updated on the latest news in your life, it’s beneficial if all your friends and family are on the same network. With such a current high usage rate, it would be difficult for a consumer to pull away from this service and join Google+ if their family and friends stay on Facebook.
- As previously mentioned, Facebook is currently the world’s most popular social media site with nearly 900 million monthly active users. This popularity has driven them to own 63.2% of the market share of social media services, beating out services such as Google+, Twitter, LinkedIn, and MySpace. They have captured such a large audience very rapidly due to the services they provide. Though others have attempted to mimic the Facebook site, Facebook provides a greater security level than MySpace, has a more user-friendly interface than Google+, and is more practical for the consumer. If the point of the service is to keep your friends and family updated on the latest news in your life, it’s beneficial if all your friends and family are on the same network. With such a current high usage rate, it would be difficult for a consumer to pull away from this service and join Google+ if their family and friends stay on Facebook. Weak CTR of advertisements. Facebook has a lower click-through-rate (CTR) than an average website, which is only 0.05% and about 4% respectively. In order to earn more income from the advertisements Facebook has to change the way it displays the ads (advertisements on wall posts have more than 6% CTR) but without interfering users’ experience. 2. Social network lacks of some features. Although Facebook has a wide range of features that other social networks don’t, the website still lacks: video chats, group chats, dislike buttons, ability to unsubscribe from alerts and many others. 3. One source of revenues – advertisements on Facebook. More than 80% of Facebook’s revenues come from advertising on its social network. The growth of the revenues directly depends on the growth of users. This leaves the business very vulnerable and dependent on continuous growth of users, which will eventually be only marginal as the social network has already attracted so many users. 4. Attitude towards users’ privacy. Facebook collects private users’ information and then stores it, uses it for its own purposes or sells it. Such treatment of users’ private information draws negative attention that decreases popularity of Facebook. 5. Lack of website customization. Many Facebook’s users spend a lot of time on social network and want the website to reflect their personalities but are unable to customize the website to their needs and are forced to use uniform template for all users. In comparison, Google+ allows for much more personalization of the social network account than Facebook does. 6. Weak protection of users’ information. Facebook, having so many users that upload personal information to the social network, is a target for attacks that steal passwords and other personal information from the users. Such attacks occur every day and thousands of passwords are stolen. Though, Facebook is not doing enough to protect users’ from identity attacks.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.
- Increasing number of people using Facebook through mobile devices. Currently Facebook has more than 600 million users who use Facebook through mobile devices. Despite that this group makes 60% of all Facebook users, the mobile advertising only accounts for only 14% income for the company. Facebook has an opportunity to create a platform that could be used to display ads for mobile users and increase firm’s income. 2. Expansion to China. Easing government regulations and newly elected government may open a way for Facebook to enter China’s social networking market. Until then, Facebook should prepare itself for such an entry. 3. Diversify sources of revenue. Facebook heavily relies on advertising on its social network as a source of income, but with being the number 2 website in the world and more than 1 billion active monthly users, Facebook could exploit other opportunities to attract the money. 4. Open Facebook marketplace. With so many users and extensive coverage of the world, Facebook is well positioned to open Facebook marketplace. If successful, it would bring more revenues than the advertising, thus boosting company’s growth and future prospects.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.
- Google, already a strong and popular company, is growing in strength and provides a greater array of services to consumers. Additionally, Google+ has incorporated advertisements in their mobile platforms, giving them an advantage over Facebook. Additionally, Facebook privacy concerns have come to light on more than one occasion, raising eyebrows from consumers, advertisers and investors. If consumers do not feel their information is protected, they stand to lose a lot of business. Finally, Facebook has such a large piece of the market already that there is little room for expansion with their current services. Their service has been blocked in countries such as China, which is a major loss for the company due to the size of the country; however, if Facebook does not expand their services provided, they will eventually fail to grow.
- Increasing number of mobile internet users. Currently Facebook has more than 600 million users who use Facebook through mobile devices. Despite that this group makes 60% of all Facebook users, the mobile advertising only accounts for only 14% income for the business. If the company will be unable to monetize mobile users, it will face decreasing advertising income as more PC users will turn to mobile users. 2. Users using ad-block extensions. Educated internet users often install extensions that block advertisements from the websites. The growing number of such users is threatening Facebook’s model as they can’t see advertisements and click on them. 3. Slow growth rate of online advertising. Although online advertising still grows in double digits (14% in 2012, down from 23% in 2011) that growth is slowing down, thereby threatening growth of Facebook’s advertising income. 4. Identity thefts. Even today, identity thefts are common on Facebook. The more identities are stolen the more criticism Facebook will receive strongly damaging its brand for inability to protect users’ private information. 5. Weak business model. Facebook’s aim is to attract social network users, display the ads for them and charge the businesses for the ads displayed. Although Facebook’s business model looks sound for the moment, the company may face severe difficulties if some conditions change that are not in firm’s control. For example, slowing growth of online advertising, new social network, shift from advertising on Facebook to other websites, growing number of mobile users (Facebook is yet unable to monetize them) or failure to diversify source of income.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.
- The primary method Facebook draws a profit is through advertising. There is high potential for Facebook to earn even more by producing advertisements integrated into the mobile applications for smartphones. They also have the proper analytics to branch into retail services without causing too much heartache. Their additional opportunity to grow their income is through creating an application payment system. Currently, applications purchased for use in Facebook, go directly to the software developer and do not filter through Facebook. This requires consumers who purchase items from numerous applications to put their information out in several different places. By having a consolidated location to make application payments, consumers may be more apt to buy.