From 2005 through 2012 Google site revenues1 have risen at a rate consistent with the growth in global Internet population excluding China2. The Internet population and Google.com revenues for the period 2005-2012 are shown in the following graph.
The correlation is shown in the following graph:
Taking into account costs and expenses, on a per-user basis profitability per user (assuming all non-Chinese internet users are Google users) is shown below:
The simple conclusion is that Google earns approximately $1.2 per user per quarter (net income is the blue area above). This figure is relatively constant with a slight increase (~20%) over 3 years.
If the company does not alter its business model then the future potential of the business could be measured as a function of Internet (ex. China) population growth.
How hard can that be?
The next post will answer this question.