Originally Posted by MacBook Pro
Advertising is a service that is arguably the most easily disrupted of all products and services. As we can see, this is occurring currently in mobile advertising. Google advertising has been displaced on the most valuable platform dramatically reducing mobile advertising revenue for Google. If the same displacement occurs in the motor vehicle market, digital media market or mobile payments market then Google could be demonstrated to be vulnerable.
Not sure I would agree with that. If advertising was so easily disrupted why does google dominate it still? It dominates on the desktop and is rising in mobile ad market share up from 52.36% in 2012 to 53.17% in 2013.
Also this is not just advertising and this is what you and most don't realize. There is a network effect on a grand scale:
1) Google has more traffic than anyone so they bring more buyers and more money. More searchers means the highest CPC too but also the largest pool of consumers
2) Only google has littered the web with more site ads than anyone out there. Most sites contain google adwords and are essentially partner with google utilizing their huge ad network to monetize their site. Again this brings more ad buyers and more consumers to the table. Network effect
3) Mobile share is rising even if apple sells iphones/ipads. I own iphones and ipads but the only thing I use to search on both is google app. I use google apps (gmail, etc) on both devices. I use google maps and google drive too. Google owns search on android and no reason they won't have or don't already have dominance on iphone/ipad. What do you use to search on your idevice? Is there really any alternative to Google? siri is dreadful as is bing and yahoo a 2nd ran still.
4) Yes on mobile the CPC will be lower but the volume will be demonstrably larger and we already see this in their latest numbers exactly like that. Huge jump in clicks and decrease in CPC (cost per click). Net effect is still healthy rise in revenue and profits.
As a consumer and advertise the only places I promote my sites are on google and facebook. Would not even consider wasting time or money on yahoo or bing. My sites are also monetized, in part, by google adwords. Does bing or yahoo even have an equivalent? No. Google's ad network reigns supreme.
Apple whether they like it or not are at the early stages of the race to the bottom. They used to have almost 50% margins. Now they are in the 30's. A few years could be 20's just to stay in the game. What will people do when they get an equivalent S5 coming out soon in 3 or 4 years for $100. It will be a harder sell putting an iphone up against that. A few weeks ago I'd say it didn't matter because telcos subsidize it. Now Verizon, ATT and T-Mobile all let you bring your phone, pay for it and then pay LOWER monthly rates. This is all new. The effect will be longer upgrade cycles and more price conscious buyers.
Sure apple won't lose most of their fans but even a 5% slice a year for a few years will be damaging especially if apple has to lower ASP's to keep what remains. I used to believe this would not happen but things have changed and more so recently. If you keep saying there are no weeds, there are no weeds....they will take your garden.