I had written last week about why I believe that the Android OS is headed for changes to their privacy policy. In summary, they currently make most of their money from iOS versus Android. If Apple is ever successful at weaning its customers off of Google services, this would strangle the flow of cash into Google's coffers. As a preventative measure, Google is probably mulling over ways to lessen their dependence on iOS and squeeze more revenue from the Android side of the business.
The breakup of Google’s core search-engine business away from all of their other ventures almost guarantees that Google will have to change their privacy policy in the future. The old Google conglomerate used to include all kinds of startups and research projects. If any one of these money-making bets had taken off, the earnings would have been shared alike by the Borg that was Google.
The breakup of Google’s core search-engine business away from all of their other ventures almost guarantees that Google will have to change their privacy policy in the future. The old Google conglomerate used to include all kinds of startups and research projects. If any one of these money-making bets had taken off, the earnings would have been shared alike by the Borg that was Google.
But Google’s board of directors didn’t want many hands rowing in the same direction. They wanted accountability and visibility of everyone's true performance. This means that if Google Ventures or Nest were to hit critical mass and start to realize huge earnings and margins, Google the search engine company wouldn’t get to see one penny of it. The new Google proper will live or die by the revenue that they bring in from their web services, meaning iOS as I explained before.
So Sundar’s Google is going to get pressure from two different directions to increase revenue from the Android side. Externally, the shareholders and Wall Street have revenue and earnings targets that reflect huge future growth. Sooner or later Google needs to deliver or watch their stock price crumble. Internally, Google management’s self-preservation instincts will kick in, and they will move to reduce their dependence on iOS.
Google is already doing well within the smaller subset of their market that is iOS. So the bulk of their opportunity for revenue growth is going to have to come from Android. Gathering data to allow for more efficient advertising is what Google does best. The information at their fingertips is so huge it’s almost unimaginable, and they are only scratching the surface with what they can sell. They are like an oil company sitting on massive oil reserves who is voluntarily not drilling new wells so as not to spook the locals. But secretly, as public opinion turns their way, they have the plans drawn up for future expansion.
How would I know this? I don’t. But I’ve been in business long enough to know that companies always turn to their core competency when push turns to shove. When the game is on the line you always pass the ball to your clutch player. The breakup of Google signals that this happening already. The new Google is now in the spotlight and it's time to rise to the occasion. I also know that any self-imposed limits start to melt away as the realization that they are no longer needed solidifies. When this will happen is the only question.
I’m not a fan of Google’s Android system because of where I perceive the privacy policy is headed in the future. However, from an unbiased financial perspective, I find the revenue potential enticing. They are doing ok with two hands tied behind their back and hopping on one leg. Once they really start mining their data stores, the sky is the limit. I won’t ever buy an Android phone, but I would definitely consider buying stock in it. The only question is whether or not the privacy policy change is already built into the stock price.
If the masses want to give away their data for free who am I not to profit from it? Go Android!
So Sundar’s Google is going to get pressure from two different directions to increase revenue from the Android side. Externally, the shareholders and Wall Street have revenue and earnings targets that reflect huge future growth. Sooner or later Google needs to deliver or watch their stock price crumble. Internally, Google management’s self-preservation instincts will kick in, and they will move to reduce their dependence on iOS.
Google is already doing well within the smaller subset of their market that is iOS. So the bulk of their opportunity for revenue growth is going to have to come from Android. Gathering data to allow for more efficient advertising is what Google does best. The information at their fingertips is so huge it’s almost unimaginable, and they are only scratching the surface with what they can sell. They are like an oil company sitting on massive oil reserves who is voluntarily not drilling new wells so as not to spook the locals. But secretly, as public opinion turns their way, they have the plans drawn up for future expansion.
How would I know this? I don’t. But I’ve been in business long enough to know that companies always turn to their core competency when push turns to shove. When the game is on the line you always pass the ball to your clutch player. The breakup of Google signals that this happening already. The new Google is now in the spotlight and it's time to rise to the occasion. I also know that any self-imposed limits start to melt away as the realization that they are no longer needed solidifies. When this will happen is the only question.
I’m not a fan of Google’s Android system because of where I perceive the privacy policy is headed in the future. However, from an unbiased financial perspective, I find the revenue potential enticing. They are doing ok with two hands tied behind their back and hopping on one leg. Once they really start mining their data stores, the sky is the limit. I won’t ever buy an Android phone, but I would definitely consider buying stock in it. The only question is whether or not the privacy policy change is already built into the stock price.
If the masses want to give away their data for free who am I not to profit from it? Go Android!
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