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Day April 17, 2014

On the future of Google. Part 2

In Part 1 of a look at Google’s future I showed that Google’s revenues have been highly correlated with the population of Internet users in the markets it serves. If there were a causal relationship between population of users and revenue growth then the company would face a growth inflection point when that population becomes half penetrated.

In Significant Digits Episode 1 (Part 1) I showed data which suggests that the inflection point will come in 2016. Essentially the argument is that Google’s growth is ultimately limited by the population of users and that itself is a predictable number. I also used the example of the PC and smartphone penetration curves to show how the perception of the fortunes of companies whose revenues are based on those technologies were affected by inflections in their respective adoptions.

However, correlation is not causation. These users we count are not the customers who pay for Google’s services. Users (or usage) is therefore only a proxy. It may be a good proxy and intuitively it makes sense that it’s a driver of growth but fundamentally the company lives on a stream of revenues paid by advertisers[1]. In order to really evaluate the opportunity we need to “follow the money” and track down where it comes from.

We don’t have visibility into the exact sources of these revenues but we have a top-level geographic segmentation (shown below.)

Notes:
  1. This is true to date and certainly it could change but hints of how that might change are still not visible to me []

Ruby on Rails Podcast #146: Horace Dediu of Asymco – Open Source Software

Sean Devine has a conversation with Horace Dediu of Asymco about open source software.

via 5by5 | Ruby on Rails Podcast #146: Horace Dediu of Asymco – Open Source Software.

CMD+Space #92: A New Lingua Franca, with Horace Dediu

This week Myke is joined by Horace Dediu. They discuss his work at Nokia and how that lead to starting his blog, Asymco. They also talk about the role and work of an analyst, his presentation series – Airshow – and graphs, naturally.

via 5by5 | CMD+Space #92: A New Lingua Franca, with Horace Dediu.