Google Search Revenue Loss
Right from the very beginning, Life has always been about making impact on one another and at the same time, generating revenue and making more profit.
Google is currently the number 3 in the world largest Tech companies right now, making it the largest internet driven company in the world and seconded by Facebook at the 16th position. The major source of Google’s revenue comes from internet advertising, Search Engine and Software. Even at that, Google’s revenue is still heavily affected as most of its products and services doesn’t go well with the Chinese government Policy.
According to China Internet Watch, “The global online advertising revenue was over USD 150 billion in 2015, higher than China. However, China’s online advertising annual growth rate reached 36.1%, higher than both the global average and the U.S – China Online Advertising Forecast 2015-2018” having an average Chinese user to spend 3.08 hours per day on digital media.
Remember that China placed regulation on online advertising this year (2016) following the public uproar over the death in April (2016) of a college student with a rare form of cancer who died after trying a treatment he found advertised on Chinese internet search giant Baidu Inc.’s platform.
Image 1: Showing World Population.
Image 2: Showing population of China
- The current population of people in China is 1,383,972,770 as of Wednesday, October 5, 2016, based on the latest United Nations estimates.
- The country ranks number 1 in the list of countries by population rating
- China population is equivalent to 72% of the total world population..
- The population density in China is 147 per Km2(381 people per mi2).
- The total land area is 9,390,784 Km2 (3,625,800 sq. miles)
- Having a 6%of the population urban areas (799,964,410 people in 2016)
- With a median age of 3 years.
- Population also projected to be 1,402,847,838 by 2020.
With the statistics above, China alone is affecting the revenue of Google almost by 20% as most it the Chinese government policies is practically against the business of Google.
- YouTube since March 23, 2009–Present
- Google sites since October 11, 2009–Present
- Picasa Web Albums since July 16, 2009–Present were also blocked in China and the Google search engine at www.google.com is currently not even among the top 10 websites in China. (According to Alexa top site rankings) This means that for anyone to use Gmail or any other Google product in China, then the use of VPS becomes the best option.
See the real time Image showing Locations Disrupting traffic to Google products
Google Transparency Report: Ongoing disruptions of Traffic to Google Products
The Maths On Google Search Revenue Loss
According to Moz Clickstream Keyword Analysis, Google Holds 90% of search on the internet search industry market. Still on Moz, Rand Fishkin started in Moz Market reasons why the company is returning back to SEO, that Google makes over $60 billion annually in revenue.
Also, MarketsandMarkets.com expects the online search advertising industry to grow from $125.82 billion in 2014 to $220.38 billion by 2019, and with Google holding the largest market share of 90% seconded by Chinese advertisers, it will be fail to say that;
- “China has caused Google a loss in revenue of almost 20% if you check it from the population statistics” or
- Using the online Ad market to solve the math, then the revenue loss of Google triggered by China from 2014 to 2019 (5 years’ time) which will be;
calculate the loss using the world population to the internet search industry
World total population = 1.4 billion
Percentage population of China to the world = 20%
Total Internet search Revenue projection for 2014-2019 will be
$220 billion – $125 billion = $95 billion (for the world population)
Total world revenue = $95 Billion
Total Revenue for China= 20/100 X $95 Billion = $19 Billion
Total revenue without china = $95 Billion – $19 Billion = $76 Billion
Recall that Google has 90% of the search revenue
Total revenue for Google = 90/100 X $76 Billion = $68.4 Billion
Total revenue of other search engines = $76 Billion – $68.4 Billion = $7.6 Billion
Google Search Revenue Loss to China will be
90 % of Total revenue for China + Total revenue of other search engines
= 90/100 X $19 Billion + $7.6 Billion
= 90/100 X $26.6 Billion
= 0.9 x $26.6 Billion
= $23.94 Billion.
From this result above, Google will lose about $23.94 Billion in revenue by 2019 due to the current disruptions of Google search activity going on in China.
- This can be reduced to the very minimum rate only if the activities of Google search will be allowed to prevail in the areas currently having the major disruptions like China.