Google over Apple
A fact slightly overlooked in last week’s news that Google overtook Apple to become the most valuable company in the world is the revenue of each of these giants.
Apple earned $234-billion in 2015, compared with Google’s modest $74-billion. Compare that to other behemoths in their fields such as Exxon Mobil and Walmart, both of which earned more than $300-billion, and it doesn’t seem possible that Google should have top dog status.
After all these years of Apple’s stratospheric share price increases, it’s easy to give up trying to predict (or understand) why the iDevice maker defies gravity on the stock market.
Google’s sudden leapfrog of its competitor in the smartphone space is no different. As Apple has tried to extricate itself from a reliance on Google for its maps and other services (with the abortive Apple Maps saga), it emerged Google paid it $1-billion in 2015 to remain the preferred search engine on iPhones and iPads.
It’s a remarkable feat that Apple was able to extract that kind of cash for a service that is already the world’s search engine of choice. But it is also a sign of just how important the iOS ecosystem is — including to Google, which itself has the other dominant mobile operating system in Android.
Apple now has about 1 billion iOS devices (iPhones and iPads) and its users tend to be more liberal when buying apps and other services. App developers will tell you that the biggest difference between Apple and Android users is that the former are more likely to pay for apps (and in-app purchases) than the latter.
If you want to make money, first code for iOS; if you want mass market penetration, have an Android app.
Meanwhile, as Facebook announced that its number of users had surged past 1.59 billion (and 1.44 billion on mobile in December), there were two other services that reached the 1bn mark, it emerged last week: Facebook-owned WhatsApp and Google’s Gmail Web-based e-mail. Both are the market leaders — in size and functionality — of their respective fields.
I’m a big fan of both. Gmail is hands-down the best thing that has happened to e-mail. It has led the field of Web-based mail begun by Hotmail, an Israeli company bought by Microsoft in a rare prescient move when it became popular in the late 1990s.
Microsoft’s largest acquisition was another messaging giant, Skype, for which it paid $8.5-billion in 2011, and has 300 milllion active users. The original app that allowed you to make calls using voice over IP — the Internet protocol that underpins the Web — has been downloaded 750 million times on mobile devices, of which 500 million are via Google’s Play Store.
It has logged 2 trillion talk minutes to date, and 3 billion minutes a day, according to the DMR website.
Though its daily active users are a modest 4.9 million, the global percentage of adults who use Skype is 17%. A one-minute call on a mobile device uses about 30MB, if you’re wondering. And Skype is estimated to be costing the telecoms industry $100-million a day, due to the amount of data traffic the application generates.
Facebook’s other big play, Instagram, has 400 million active monthly users, it announced last week; and its Messenger app has over 800 million users, of which about 250 million joined in 2015.
It’s noteworthy that much of the rampant statistics for these social media, messaging, photo-sharing, and voice-calling are happening on mobile.
All of these astounding statistics are a timely reminder of how our communication patterns have shifted since the creation of the Internet, and since mobile phones became the most popular tool through which we communicate.
Meanwhile, poor old Yahoo — the company that was an early leader in search and webmail, which once turned down a $44-billion Microsoft acquisition in 2008 — is looking precarious, as it searches for a new buyer. Google star Marissa Mayer’s three-year efforts to turn it around seem to be floundering. It’s a timely reminder of that great business adage: you snooze, you lose.
Shapshak is editor and publisher of Stuff magazine
This article first appeared in the Financial Mail