If we solely look at the search space, Google (Alphabet) is a monopoly that controls most of the search market. However, if we look at the wider digitalmarketing space, Google looks more like an oligopoly that competes against other tech giants like Amazon, Facebook, Apple, Netflix, and more from various markets developed due to the web.
A market type is a way a given group of consumers and producers interact, based on the context determined by the readiness of consumers to understand the product, the complexity of the product; how big is the existing market and how much it can potentially expand in the future.
Analyzing a market to understand the competitive landscape is not as straightforward as it seems. Indeed, things might be connected in unexpected ways in the business world, and that is even truer for competition on the web. Boundaries are much more blurred, and markets that didn’t exist a few years ago just developed. As they consolidate, it becomes easier to establish their boundaries. But given the current landscape, many markets are now overlapping.
For that reason, when we look at a company like Google (Alphabet), we know it operates within the boundary of the search industry, which is its core business and what it still provides most of its revenues. Yet, it also operates outside of it.
Google has a diversified businessmodel, primarily making money via its advertising networks that, in 2019, generated over 83% of its revenues, which also comprise YouTube Ads. Other revenue streams include Google Cloud, Hardware, Google Playstore, and YouTube Premium content. In 2019 Google made over $161 billion in total revenues.
That is why if we look at the competitive landscape for Google we also find it pretty diversified.
While Google (now Alphabet) has been born as a search engine, it is now a diversified company, 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, which business is primarily based on advertising, the company does compete with Facebook, Twitter, Microsoft (with Bing), and Amazon (with e-commerce search and its advertising machine).
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
Google’s main business is about data and how this is used to improve its products and enable its business model still primarily based on advertising (which turned out to be the killer revenuemodel for the web).
In a data supply chain the closer the data to the customer the more we’re moving downstream. For instance, when Google produced its own physical devices. While it moved upstream the physical supply chain (it became a manufacturer) it moved downstream the data supply chain as it got closer to consumers using those devices, so it could gather data directly from the market, without intermediaries.
Thus, by looking at the search market along, no doubt Google looks like a monopoly, with its over 90% market share worldwide and its control over the Android operating system and Google Chrome browser.
If we instead look from the other perspectives, like voice search, digital advertising, and media, Google looks more like an oligopoly, fighting to gain control over these various markets.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
