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Basically, Google is swallowing the world…

Source: Google, 2014 Is An Estimate

$-

$10

$20

$30

$40

$50

$60

$70

2009 2010 2011 2012 2013 2014E

Bill

ions

Google Global Annual Revenue

Google is now bigger than all newspapers, magazines

Source: Google, NAA, PIB

$0

$10,000

$20,000

$30,000

$40,000

$50,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Mill

ions

Google vs. Magazine vs. Newspaper Ad Revenue, US Data, 2004-2013

Google (US) US Magazines US Newspapers

Google dwarfs “big media”

Source: Company Filings, BI Intelligence estimates

$30

$18 $16

$14

$5 $5 $3 $2

$70

TimeWarner

Facebook CBS Viacom Gannett Yahoo AOL New YorkTimes

Google

Bill

ions

Estimated 2014 RevenueSelect Media Companies

Google is almost half the size of all global TV advertising

$174

$70

Global TV Ad Revenue Google

Bill

ion

s

Estimated 2014 Ad RevenueGoogle vs. Global TV Ad Market

Source: Google, PWC

Google makes all other digital ad platforms “also rans”

Source: Company Filings Note: Based on GAAP revenue.

Google

FacebookYahoo

AOL

$0

$5

$10

$15

$20

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Bill

ions

Digital Advertising Revenues (Global)

Google’s Chrome browser is crushing Firefox and IE

Source: StatCounter

Other

Safari

Firefox

Internet Explorer

Chrome

Opera0%

10%

20%

30%

40%

50%

60%

2010 2011 2012 2013 2014

Global Web Browser Usage Share

Google’s Android has peak-Windows-like market share

Source: IDC, Strategy Analytics, BI Intelligence estimates

Android

iOS

Microsoft

BlackBerry

Other

0%

20%

40%

60%

80%

100%

1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14

Share

of

Glo

bal U

nit S

hip

ments

Global Smartphone Market Share By Platform

Google93%

Bing3%

Yahoo2%

Other2% Europe Search Market Share

Oct. 2014

In Europe, Google has peak-Windows-like search share

Source: StatCounter

And people are noticing!

Source: StatCounter

(For Microsoft, DOJ attack was the beginning of the end)

Source: StatCounter

Almost all of Google’s revenue still comes from ads

Source: Google

$10.86 $12.52

$15

$0.67 $1.23

$1.84

$0

$3

$6

$9

$12

$15

$18

Q3 12 Q3 13 Q3 14

Bill

ions

Google Revenue By Source

Advertising Other

Mostly search, lots of display, some video…

Source: Google, BI Intelligence estimates

Search

Total Advertising

$-

$4,000

$8,000

$12,000

$16,000

Q110

Q310

Q111

Q311

Q112

Q312

Q113

Q313

Q114

Q314

Bill

ions

Google Advertising Revenue (Global)

Search clicks still growing fast but now decelerating

Source: Google

20%23%

26%

31%

26%25%

17%

Q1 13 Q3 13 Q1 14 Q3 14

Google Paid Clicks GrowthGlobal, Year-Over-Year

US desktop search queries are now shrinking

Source: comScore Note: Explicit user initiated search queries only.

10%

12%

14%

10%

7%

4%

0%

-3%-5%

-7% -8% -7% -7%

Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

Total Monthly Search Query Growth U.S., Year-Over-Year; Desktop Only

But Google utterly dominates mobile search

Source: RKG

Bing5.6%

Yahoo8.4%

Google85.6%

Other0.3%

Share Of Mobile Organic Search Visits

US, Q3 2014

Remember when Google bought revenue-less YouTube?

Source: RKG

Now, YouTube dominates digital video

Source: comScore

0

25

50

75

100

125

150

175

Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14

Millio

ns

Unique Video Viewers (US) Desktop Only

Google Sites(YouTube)

Facebook

AOL

Yahoo Sites

YouTube also dominates digital video ads

Source: Company Filings, BI Intelligence estimates

YouTube

Tremor

YuMe

TubeMogul

$0

$250

$500

$750

$1,000

$1,250

$1,500

$1,750

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014

Revenue I

n M

illio

ns

Global Digital Video Advertising Revenue(Select Companies)

YouTube is closing in on broadcast-network revenue

Source: News Reports, Company Filings, BI Intelligence estimates

$-

$4,000

$8,000

$12,000

2007 2008 2009 2010 2011 2012 2013

Mill

ions

YouTube Ad Revenue vs. Network Ad Revenue

CBS

YouTube

AMC Network

YouTube is even becoming meaningful to Google’s revenue!

Source: BI Intelligence estimates, Credit Suisse Note: Google does not break out revenues for its specific services.

Search Advertising And Other Revenue

84%

YouTube9%

Play7% FORECAST:

Google Revenue Share 2014 (Global)

Remember when Android was a little science project?

Source: Google

Now Android is the dominant global device platform

Source: Gartner, IDC, Strategy Analytics, Company Filings, BI Intelligence estimates

Android

Windows

Apple

BlackBerry

Other

0%

20%

40%

60%

80%

100%

1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14

Global Computing Platform Market Share

Android fragmentation is becoming less of a problem

Source: Google

Froyo

Gingerbread

Ice Cream Sandwich

Jelly Bean

Kit Kat

0%

25%

50%

75%

100%

9/15/12 12/15/12 3/15/13 6/15/13 9/15/13 12/15/13 3/15/14 6/15/14 9/15/14

Jelly Bean And Kit Kat Are Now ~80% Of Android

Android surpassed iOS mobile traffic this year

Source: Net Applications, August 2014

0%

10%

20%

30%

40%

50%

60%

Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14

Global Mobile Platform Traffic Share

iOS

Android

Java ME

Symbian

Windows Phone

Other

Android users now consume more ads than Apple users

Source: Opera Mediaworks

Android

iOS

BlackBerry

Symbian

Other

0%

20%

40%

60%

80%

100%

2Q12 4Q12 2Q13 4Q13 2Q14

Share

Of

Tra

ffic

Global Mobile Ad Traffic Share By Platform

Android users are even catching up to Apple in eCommerce

Source: Monetate

$167

$109

$127 $129$120

$107

2.5%

2.1%

1.6%

0.9%

0.7%

0.6%0%

2%

4%

$0

$25

$50

$75

$100

$125

$150

$175

iPad Android Tablet Kindle Fire iPhone Android Phone Windows Phone

Android Catching Up To Apple In E-Commerce

Average Order Value

Conversion Rate

Tablets Phones

Google’s apps are now among the most-used

Source: comScore; September 2014, Age 18+, US Data

73%

53%

46% 44% 44% 42% 41%38%

29% 28%25% 25%

22% 22% 20%

Top 15 Apps By Percent Reach Of Mobile App Users

Google Play is catching up to Apple’s App Store in revenue

Source: App Annie, Jana, BI Intelligence estimates

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

3Q13 4Q13 1Q14 2Q14 3Q14

Bill

ions

Estimated App Revenue

Apple App Store

Google Play

Google Play is paying out more and more to developers

Source: App Annie, Jana, BI Intelligence estimates

Apple App Store

Google Play

$0

$2

$4

$6

$8

$10

$12

$14

3Q13 4Q13 1Q14 2Q14

Estimated App Developer Payout

Google Play will be ~7% of Google’s revenue this year

Source: BI Intelligence estimates, Credit Suisse Note: Google does not break out revenues for its specific services.

Search Advertising And Other Revenue

84%

YouTube9%

Play7%

FORECAST: Google Revenue Share

2014, Global

Google is so wildly successful that it’s

throwing money at the future…

Source: Google

Cute!

Source: Edudemic

(Some) connected cars will be a huge market

Source: SBD, GSMA

In-vehicle Services

Hardware

Telematics Service Providers

Telecom Service Providers

€ 0

€ 10,000

€ 20,000

€ 30,000

€ 40,000

2009A 2010A 2011A 2012A 2013E 2014E 2015E 2016E 2017E 2018E

Mill

ions

Connected Car Revenue Forecast

We Are Here

Smart glasses (If at first you don’t succeed…)

Source: Wikipedia

Smart contact lenses

Source: Google

(Some) wearables poised to grow rapidly

Source: BI Intelligence estimates

0

40

80

120

160

2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E

Mill

ions O

f U

nits S

hip

ped A

nnually

Global Wearable Device Unit Shipments Forecast

Rest Of Wearables Market

Fitness Bands And Other Activity Trackers

Smartwatches

35% CAGR 2014-2019

We Are Here

Home snooping devices

Source: BI Intelligence estimates

Huge growth expected for Internet of Things

Businesses

Smart Cities

ConnectedHome

-

5

10

15

20

25

2014E 2015E 2016E 2017E 2018E 2019E

Bill

ions o

f D

evic

es

Estimated Number of Installed IoT Devices by Sector

Source: BI Intelligence Estimates

Super-fast Internet

Source: The Atlantic

Drones and robot projects, like “Project Wing”

Source: The Atlantic

And balloons bringing Internet access to everyone!

Source: The Atlantic

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Hope King

Reporter

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Research Associate

John Greenough

Research Analyst

Jessica Smith

Research Associate

Tony Danova

Senior Research Analyst

Mark Hoelzel

Research Analyst

John Heggestuen

Research Analyst

Cooper Smith

Senior Research Analyst

BI Intelligence

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