Love him or hate him, when Peter Thiel, billionaire investor in Facebook, one of the very few Trump supporters in Silicon Valley and the man who helped Hulk Hogan go after Gawker Media, talks about technology, it’s better to drop everything and listen.
CNBC reported that Peter Thiel, at CERAWeek by IHS Markit, an energy industry conference, said:
“If you have a monopoly, you will tell people you are in a super-competitive business. And if you are in a super-competitive business, you will tell people that you have a monopoly of sorts.
So for example, if you have a search company in Silicon Valley that I will not name, if you were to go around to CEOs saying, ‘We have a bigger share of the market and higher profit margins than Microsoft ever had in the 1990s,’ you wouldn’t do that…You don’t even talk about search. You say, ‘We are a technology company with an enormous space called technology, and we’re competing with Apple on smartphones, and we’re competing on self-driving cars, and there’s competition in everything we’re doing except this one thing called search, and we never talk about that.'”
His comments sort of sums up the dominant position that Google finds itself in, in the search engine market. But it’s also true that most of the chatter about Alphabet and Google swirls around Google’s never-ending moon shot projects, their autonomous car efforts, their new found love in Google Cloud Platform and everything other than Google Search.
According to Netmarketshare, Google Search has 80.52% of desktop marketshare, and Statista puts that number at 89.6%. Though the numbers vary depending on which report you are reading, they all have one thing in common: when it comes to search, there is Google, and then there are the rest.
Despite its search engine market share already at an extremely high level due to low competition, Google’s position is only going to get stronger from here, thanks to Android.
Data consumption is already shifting from desktops to mobile devices, and that seems to be an irreversible trend. Part of that shift was caused by Android and Android-based mobile devices. It may have been started off by Apple and its first iPhone, but Android caught the fever and ran with it like it was going out of fashion.
“With over 328 million Android devices shipped worldwide, the operating system has long dominated the smartphone industry. But in the third quarter of 2016, Android managed to capture a record 88% of the global market, according to Strategy Analytics. Meanwhile, Apple’s iOS share slipped to 12.1% in the same period, from 13.6% the year prior.” – QZ
With smartphone penetration in developed markets already peaking, most of the device growth will be coming from developed markets, where Internet penetration has plenty of room to expand. And, as the dominant player in the mobile operating system market, Android will keep growing its user base, slowly expanding the reach of Google’s already-dominant search engine.
There are now two areas where Google seems the undisputed leader for the foreseeable future – digital advertising and mobile OS. Both segments are growing, and both feed traffic back to Google Search, the company’s chief monetization engine. Nothing short of a massive multi-industry disruption will be able to stop that, and that’s as likely to happen as Apple ceasing to make iPhones or Microsoft getting out of the software business.
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