Google Is Gradually Reducing Its Reliance on Advertising

Published on: February 12, 2019 / Update from: February 12, 2019 - Author: Konrad Wolfenstein

While Google's hardware ambitions are still limited (compared to Amazon, for example) and are widely seen as a means to an end (i.e. collecting more data and selling more advertising), the company's range of products and services has expanded over the course of the year years significantly expanded. In addition to the company's "Other Bets," which are deals unrelated to Google's core products like Access, Calico, CapitalG, GV, Nest, Verily, Waymo and Advertising towards a more diversified company can be seen.

As the chart below illustrates, Google's many ancillary activities have grown steadily over the years, and in 2018, the company's non-advertising revenue reached $20.5 billion, up from just $0.8 billion in 2009. More importantly However, the percentage of Google's revenue that does not come from advertising sales rose from 3.2 percent in 2009 to 15 percent last year, suggesting that the search giant is no more than a one-trick pony (circus horse with just one trick).

While Google's hardware ambitions are still limited (compared to Amazon for example) and widely considered a means to an end (which is to collect more data and sell more advertising), the range of the company's products and services has expanded significantly over the years. Along with the company's “Other Bets”, the businesses unconnected to Google's core products such as Access, Calico, CapitalG, GV, Nest, Verily, Waymo and X, this can also be seen as part of a broader pivot away from its reliance on advertising towards becoming a more diversified company.

As the following chart illustrates, Google's many side-activities have grown steadily over the years and in 2018, the company's non-advertising revenue reached $20.5 billion, up from just $0.8 billion in 2009. More importantly, though, the percentage of Google's revenue that didn't come from advertising sales grew from 3.2 percent in 2009 to 15 percent last year, indicating that the search giant can no longer be considered a one-trick pony.

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