No. of Recommendations: 7
If you gave me a cheque for (say) $500 billion, could I set up a company in competition, undercut them a bit and take away 1/3 of their profits?
My guess is "nope".
I think I'd find it nearly impossible to usurp the king in search. But luckily Alphabet's profits don't come directly from their search algorithm, but from advertising on their search results. The distinction sounds like a stupid one until you realize no one actually got better at local news than newspapers, they just stole the advertisers away.
Google search advertising is particularly powerful compared to newspapers because you tailor each ad based on what the user is searching.
I was surprised to learn (from googling it lol) that alphabet's average search revenue per user per year comes out to $349.29. Google's search is very good, repeatable, and (usually) has a low incidence of junk, but I would not pay $29 per month for it. As long as a free option remained, I think I'd pay maybe $1 to $5.
A social media site could compete because they have lots of user engagement and data. When I was less disillusioned by Telsa, I considered how interesting advertising in a self-driving car would be. Tap this button and be driven to my store, or restaurant. Sort of like a pay-per-click you get a pay per delivered person.
Anyway, it's important to acknowledge where the income stream comes from so we can be aware if something starts eating away at profits.
