While Google (now Alphabet) has been born as a search engine, Google’s business model is now diversified, even though its core business remains search, as most of its revenues still come from Google, the search engine, and YouTube, the “video engine.” However, as a tech giant, Google makes money primarily through advertising, the company does compete with Facebook, Twitter, Microsoft (with Bing), and Amazon (with e-commerce search and its advertising machine).
|Competitor||Description||Key Insights||Competitive Overlap||Differentiation|
|Microsoft||A technology giant known for its software products, including Windows, Office suite, and Azure cloud services. Microsoft competes with Google in various software and cloud computing markets.||Microsoft offers software products and cloud services, competing with Google in software, cloud computing, and productivity tools markets.||Both compete in software, cloud computing, and productivity tools markets, with Microsoft’s focus on Windows, Office suite, and enterprise solutions.||Microsoft’s emphasis on Windows, Office suite, and enterprise services.|
|Apple||A leading consumer electronics and software company known for its iPhone, Mac, iPad, and iOS ecosystem. Apple competes with Google in mobile devices, operating systems, and app ecosystems.||Apple offers mobile devices, operating systems, and apps, competing with Google in mobile device, OS, and app markets.||Both compete in mobile devices, operating systems, and app ecosystems, but Apple’s focus is on its hardware and tightly integrated ecosystem.||Apple’s hardware and ecosystem integration.|
|Amazon||An e-commerce and cloud computing giant known for Amazon.com and Amazon Web Services (AWS). Amazon competes with Google in cloud computing and e-commerce markets.||Amazon provides e-commerce services and cloud computing through AWS, competing with Google in cloud computing and e-commerce segments.||Both compete in cloud computing and e-commerce markets, with Amazon’s emphasis on e-commerce and AWS’s infrastructure services.||Amazon’s e-commerce platform and AWS cloud services.|
|A social media and technology company known for Facebook, Instagram, WhatsApp, and Oculus. Facebook competes with Google in online advertising and social media markets.||Facebook offers social media platforms and advertising solutions, competing with Google in online advertising and social media segments.||Both compete in online advertising and social media markets, with Facebook’s focus on its social platforms and advertising tools.||Facebook’s social media platforms and advertising capabilities.|
|IBM||A technology and consulting company known for its enterprise software, services, and cloud solutions, including IBM Watson. IBM competes with Google in cloud computing and enterprise solutions.||IBM provides enterprise software, services, and cloud solutions, competing with Google in cloud computing and enterprise segments.||Both compete in cloud computing and enterprise solutions, with IBM’s emphasis on Watson AI and enterprise services.||IBM’s Watson AI and enterprise-focused services.|
|Oracle||A multinational technology company known for its database software and cloud services. Oracle competes with Google in database technology and cloud computing.||Oracle offers database software and cloud services, competing with Google in database technology and cloud segments.||Both compete in database technology and cloud computing markets, with Oracle’s focus on enterprise databases and cloud services.||Oracle’s enterprise database technology and cloud offerings.|
|Salesforce||A customer relationship management (CRM) software company known for its cloud-based CRM solutions. Salesforce competes with Google in cloud CRM and customer engagement markets.||Salesforce provides cloud CRM and customer engagement solutions, competing with Google in cloud CRM and customer-focused segments.||Both compete in cloud CRM and customer engagement markets, with Salesforce’s focus on cloud-based CRM solutions.||Salesforce’s cloud CRM and customer-focused offerings.|
|A social media platform known for microblogging and real-time updates. Twitter competes with Google in the social media and online advertising space.||Twitter offers a social media platform with real-time updates and advertising, competing with Google in social media and online advertising segments.||Both compete in social media and online advertising markets, with Twitter’s focus on real-time communication.||Twitter’s real-time microblogging and advertising platform.|
|Snap Inc.||Snap Inc. is the parent company of Snapchat, a multimedia messaging app known for its multimedia content and filters. Snap Inc. competes with Google in the social media and multimedia messaging space.||Snap Inc. owns Snapchat, a multimedia messaging app, competing with Google in the social media and multimedia messaging segments.||Both compete in social media and multimedia messaging markets, with Snapchat’s focus on multimedia communication and content sharing.||Snapchat’s multimedia messaging and content features.|
|DuckDuckGo||DuckDuckGo is a privacy-focused search engine that emphasizes user privacy and does not track user data for advertising. DuckDuckGo competes with Google in the search engine market.||DuckDuckGo provides a privacy-focused search engine and competes with Google in the search engine market.||Both compete in the search engine market, but DuckDuckGo differentiates itself by prioritizing user privacy and not tracking user data.||DuckDuckGo’s commitment to user privacy in search.|
When Page and Brin managed to create a search engine that was 10x better than competing engines, it made clear that search was all but a solved issue. At the end of the 1990s, Page came out with its algorithm, PageRank, which managed to rank the entire web-based on relevance and authoritativeness of the web pages it indexed.
It took off right away! It was at that point that many of Google’s competitors understood that search was just at the embryonic stage. It was by then that Google had already taken over the search market, yet revenue was still far away.
Bach in the days, Brin and Page didn’t hide their resentment toward the advertising business model, which was the prevalent model for search. Indeed, in the paper “The Anatomy of a Large-Scale Hypertextual Web Search Engine” where Page and Brin presented their first prototype of Google.
With full text and hyperlink database of at least 24 million pages, in a paragraph dedicated to advertising, they explained: “We expect that advertising funded search engines will be inherently biased towards the advertisers and away from the needs of the consumers.“
The main issue they had toward advertising was the fact that it was biased, and it caused a lot of spam in search results. Indeed, when they met Bill Gross, founder of GoTo, which would later become Overture, the encounter might not have been among the most cordial. That’s because Bill Gross had figured the advertising market had massive potential, as he introduced an auction-based system for bidding businesses based on performance and clicks.
However, this was still back when Page and Brin were two academics completing their Ph.D. at Stanford University. The transition to becoming businessmen would take soon to arrive. Indeed, as venture money was soon to be over a plan B was needed.
In addition, as Google managed to rank advertising based on relevance (for instance, by ranking higher those ads that got more clicks) advertising became a possible option. As Larry Page pointed out in the first Google letter to shareholders:
Advertising is our principal source of revenue, and the ads we provide are relevant and useful rather than intrusive and annoying.
As large and multi-dimensional as the company may be, Google is fundamentally an advertising business. The vast majority of income is earned through generating, capturing, and channeling leads who have intent to make a purchase.
Some argue this makes Facebook the main competitor of Google because users are spending more time on social media and less time using search engines. With Facebook offering an ad platform of comparable reach and functionality, advertisers will be forced to follow the money and migrate away from search engines.
As already noted, Google’s supremacy in search is unlikely to be challenged in the medium to long term. In fact, the company controls over 92% of the search market since introducing Google Search in 1997.
Competitors in the North American market such as Yahoo and Bing are thus hardly worth mentioning. But in the Chinese market, Baidu enjoys similar dominance because Google is banned from operating there.
A potential emerging competitor to Google search is Amazon. Though not a search engine in the traditional sense, many consumers now bypass Google and search for products on the Amazon website directly.
Google’s acquisition of YouTube in 2006 is a classic example of the company using its power to establish a presence in an industry.
Here, the competition is much more intense. Video platforms such as Snapchat, TikTok, Instagram, and Facebook all compete for video viewers.
Google also faces strong competition for viewers from streaming services offered by Disney, Netflix, Amazon, and Hulu. The company does not operate its own streaming platform, instead offering the somewhat underdeveloped video aggregation service Google TV.
However, it should be noted that Google TV serves ads to consumers based on their viewing history. The presence of this feature could be construed as an attempt to compensate for the revenue lost to social media platforms mentioned earlier.
In cloud computing, Google’s main competitors are Microsoft and Amazon who both have greater market share in the industry.
Google must also compete with smaller but no less significant companies in technology and database services, semiconductor manufacturing, consumer electronics, and customer relationship management (CRM). These include IBM, SAP, Cisco, Oracle, Samsung, and Salesforce.
Google’s Pixel smartphone is also up against similar offerings from Sony, Apple, Samsung, LG, Oppo, and lesser-known Chinese brands Huawei and Xiaomi.
- Google has total dominance in organic and paid search, controlling over 92% of the market. But in markets without first-mover advantage, it faces stiff competition.
- As fundamentally an advertising business, Facebook is perhaps the biggest competitor of Google with Amazon a close second. Users are spending more time on social media and eCommerce sites to search for what they need. As a result, advertisers and advertising revenue must follow the crowd.
- Google is a significant player in cloud services, but it sits behind Microsoft and Amazon in terms of market share. It also faces established competition in technology and database services, consumer electronics, and CRM.
Key Competitors of Google:
- Facebook (Meta):
- Facebook competes with Google for advertising dollars as an attention merchant.
- Offers ad platform with comparable reach and functionality to Google, targeting over 2.91 billion monthly active users.
- Generated $114.9 billion from advertising in 2021.
- While not a traditional search engine, Amazon’s dominance in eCommerce makes it a competitor as users directly search for products on its platform.
- Also competes with Google in cloud services, with Amazon Web Services (AWS) and Amazon’s retail advertising business.
- Competes with Google in cloud computing (Azure vs. Google Cloud) and search (Bing vs. Google Search).
- Both companies offer a suite of software tools and services.
- Video Platforms (YouTube Competitors):
- Competing video platforms include Snapchat, TikTok, Instagram, Facebook, Vimeo, Dailymotion, IGTV, TikTok, and Twitch.
- YouTube, owned by Google, is a major player in the online video space.
- Streaming Services (Entertainment):
- Faces competition from streaming services like Disney+, Netflix, Amazon Prime Video, and Hulu.
- Google TV serves ads based on viewing history, compensating for revenue lost to social media platforms.
- Cloud Computing:
- Microsoft’s Azure and Amazon’s AWS are major competitors to Google Cloud in the cloud computing industry.
- IBM, SAP, Oracle, and Salesforce also compete in the technology and database services sector.
- Smartphones (Pixel Competitors):
- Google’s Pixel smartphone competes with offerings from Sony, Apple, Samsung, LG, Oppo, Huawei, Xiaomi, and others.
- Other Bets:
- “Other bets” within Alphabet’s financials include emerging technologies and business opportunities that could become significant competitors in the future.
- The Power of Google Business Model in a Nutshell
- How Does DuckDuckGo Make Money?
- How Amazon Makes Money: Amazon Business Model in a Nutshell
- How Does Netflix Make Money? Netflix Business Model Explained
- How Does Spotify Make Money? Spotify Business Model In A Nutshell
- DuckDuckGo: The [Former] Solopreneur That Is Beating Google at Its Game
- How Does Facebook Make Money? Facebook Hidden Revenue Business Model Explained
Main Free Guides:
- Business Models
- Business Strategy
- Business Development
- Digital Business Models
- Distribution Channels
- Marketing Strategy
- Platform Business Models
- Tech Business Model