Why Google Isn’t Growing

http://www.businessinsider.com/why-google-isnt-growing-2014-4

“Internet growth is slowing — and Google is the Internet

Google handles about 80% of all search queries, and hundreds of millions of people use Gmail and YouTube, its most famous brands. Google is so dominant that its economics are, in many ways, a proxy for the Web as a whole. How grows the Internet, grows Google.

But growth of the Internet won’t go on forever.

Already there are signs of an upcoming “inflection” in 2016, when the level of Internet penetration across the planet gets well past 50% of all humans — and the Internet itself enters a period of rapidly declining growth.

Here’s Asymco’s chart of Internet penetration by geographic area:”

Asymco

Here’s the Asymco data showing the correlation between Google revenues and the total Internet population:

Asymco

 

Google doesn’t operate in China. You can see that Google’s revenues run in parallel to the number of humans on the Web.

Asymco

Chart shows a measure of how closely correlated the growth in Google’s revenues is to the growth of the internet population as a whole.

 

Asymco

The overall effect of this is that Google’s net income per user is relatively stagnant:

Asymco

 

Google gets about $1.20 per user in profit — see the blue section of the chart — and the rate doesn’t change very much over time.

Read more: http://www.businessinsider.com/why-google-isnt-growing-2014-4#ixzz306c3RfJc

Stephen