Google’s business model has dominated the web for over 25 years by creating a monopoly on search.
Google stumbled upon one of the most profitable business models of the last 30 years.
And attention merchant business model, where advertising revenue subsidize search well above its cost.
For instance, in 2022, Google reported almost $60 billion in net profits.
Indeed, Google spends money (in terms of server costs and also revenue split with publishers) in order to bring traffic back to its properties.
And therefore, monetizing this traffic via an advertising business model.
Google’s ability to monetize its web properties has been pretty stable in the last years.
In short, for each dollar spent on acquiring traffic, Google makes back almost $5 in revenue!
Indeed, in terms of business model efficiency (revenue per employee), only Apple and Meta are comparable to Google.
Not even Microsoft has managed to build such a business model as Google.
And yet, now, this business model might be in jeopardy.
Why?
Conversational interfaces, like ChatGPT, are redefining the whole space!
If ChatGPT and other conversational interfaces disrupt search, we’ll see the demise of one of the most interesting business models of the last century!
Related To Google
Google Traffic Acquisition Costs
AI Paradigm
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