While Facebook dominates the political ads market in the US, Google still controls about 20%.
Google now has nine products with over 1 billion monthly active users, but the company’s revenue engine still primarily runs on search and advertising.
It will probably be a long time before moonshot bets like Waymo and Loon start paying off for Google, but Wall Street need not panic: experts believe the company has several other properties that are bursting with revenue potential.
Google doesn’t share revenues for most of its products, although it has started lifting the curtain on some of its biggest hitters, breaking out earnings for YouTube and Cloud for the first time this year.
Analysts are keeping a close eye on both of those businesses as key areas of growth – but here are four other products analysts believe could become major upsides to Google’s bottom line.
Antonio Villas-Boas/Business Insider
In a note sent out late last year, RBC analyst Mark Mahaney called Google Maps one of the “greatest under/un-monetized” platforms in the world, and it’s not hard to see why.
Google makes most of its revenue through Maps by selling advertisements to businesses. It also offers the Maps API to businesses and app develops for a fee.
But experts believe Google could be doing more. MKM Partners analyst Rohit Kulkarni told Business Insider that Maps was one of the Google products he believed had the most potential for making money.
“There could be a replacement for Gmail, but there is no alternative in the world for Google Maps,” he said. “That in itself should mean they are able to monetize it higher.”
Before the pandemic, RBC’s Mahaney predicted that Maps will bring in an additional $1.9 billion to $3.6 billion in revenue for Google by 2021.
Google now owns more than 80% of the navigation market, split between Google Maps and Waze, according to Mahaney, giving the company access to a huge amount of data. But an RBC study last year found that Local Search Ads on Maps appeared in 48% of searches on desktop, yet only 21% of mobile searches.
Google has been helping smaller businesses get visibility on Maps during the pandemic, something that analysts tell Business Insider that they’ve found very encouraging.
Hollis Johnson/Business Insider
Google Assistant, the company’s voice-powered concierge, has more than 500 million users across more than 90 countries, according to the company. As well as living inside Google’s range of smart speakers, Assistant also comes baked into Android, giving it a massive amount of scale – and major revenue potential.
To date, Google has focused on gaining market share rather than making money with Assistant; small steps to monetize have included taking money from transactions, and adding paid search ads when using Assistant on Android.
But experts believe that Assistant has huge revenue potential if Google can make it work from a privacy perspective.
“Assistant has had huge acceptance from users but it’s not adding a lot of value right now,” said Neuberger Berman analyst Hari Srinivasant. “The market is underappreciating this innovation in search.”
Srinivasant believes Google could eventually use Assistant to provide more customized ads for users based on their interests, although Google would need to make any such features explicitly opt-in.
“The Assistant is tied to your calendar. It’s tied to the set of activities you’re doing. So if it knows you’re taking a trip to Europe in a week, that info could be very valuable and there might be advertisers who are willing to pay for it. And you as a user, you might be interested in it.”
Android and the Play Store
Here’s a strange fact: Despite Google’s Android platform owning significantly more of the smartphone market than Apple, its Play Store makes a lot less money than Apple’s App Store.
Sensor Tower has been charting this trend for some while, and reported that spending on Apple’s App Store in the first half of 2020 was nearly twice the amount than Google saw on the Play Store. Of course, both Apple and Google take a chunk of that for themselves.
Analysts believe one reason for this difference that iPhone handsets are more expensive on the whole, suggesting their owners are more affluent. Android also has a fragmentation problem which can sometimes prohibit access to newer apps.
But this means major huge potential for Google to close the gap and make its Play Store – and by extension Android – a much bigger cash cow.
“It feels to me they are leaving a lot of money off the table with regards to what Android and the Google Play store is capable of doing,” said Kulkarni. “I dont think Android will ever get to parity with iOS [on revenues], but they could close the gap with a combination of things.”
That could include making it easier for developers to monetize and providing more guidance through the app submission process. Easing problems around fragmentation may also help.
Gmail Gmail’s “Snooze” feature can help you keep up with your inbox.
Google ended its practice of scanning Gmail accounts for advertising purposes in 2017, but it still targets users with ads based on information gleamed elsewhere.
It also makes money by selling Gmail as part of its GSuite package to businesses, and this is where analysts think Google has the potential to turn Gmail into a bigger money engine. “it’s the clearest way for them to monetize Gmail,” said Kulkarni.
The email service, which started life as one of Google’s small “20 percent” projects, now has over 1.5 billion users. In April, Google told CNBC it had more than 6 million businesses paying for G Suite.
“Email is the anchor product and everything revolves around that,” said Kulkarni on G Suite. As Google continues to push ahead aggressively in the cloud market, Kulkarni, who chose Gmail as a “one to watch” for revenue potential, believes the email service could become much more lucrative for Google.
“They’re still behind the curve” compared to rivals, he said.
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