Written by Ophir Gottlieb
PREFACE
Alphabet Inc (NASDAQ:GOOGL) Google has made a subtle change to Google Search, but the intent is clear: win mobile and beat Facebook Inc (NASDAQ:FB).
STORY
On Google's official blog, the company announced that it has tweaked Google Search to better perform on mobile. Specifically, the company noted that:
"Now on the Google app for Android, even if your search fails, Google will deliver your results as soon as a connection is available-so you can keep searching with a single tap."
The idea is simple enough, Google Search will store the requests and deliver them when possible. The company made it explicitly clear that "this feature won't drain your battery, and [] it minimally impacts data usage."
So does this even matter? Yeah, it really does, and here's why.
WHAT'S REALLY GOING ON
Alphabet Inc (NASDAQ:GOOGL) isn't just playing around with the crown jewel that is Google Search for fun. No, for the first time ever, Alphabet Inc generated more revenue from mobile than desktop. Here's a great chart from eMarketer (United States only):
Not only has Google Search turned the corner (and never to look back) on mobile as the leader, but worldwide it's not even close anymore. About 59.5% of Alphabet Inc's net global ad revenues will come from mobile internet ads in 2016 and that's a rise from just under 46% in 2015.
But this goes even further. While Alphabet Inc owns the search world through Google, Facebook Inc (NASDAQ:FB) is the undisputed champion (already) for display ads. And, if you want to see a mobile heavy business, then look no further than Facebook Inc.
FACEBOOK IS MOBILE
In the Facebook Inc (NASDAQ:FB) most recent earnings report, the company noted that mobile now makes up 84% of advertising revenue. Yep, Facebook is a mobile first company, and everything is driven by its suite of apps, namely Facebook Proper, Facebook Messenger, Instagram, and WhatsApp.
Now we can see Alphabet Inc (NASDAQ:GOOGL) focusing the single crown jewel of its existence, Google Search, yet more on mobile. The introduction (and proliferation) of Android was the start for Google. Now it's making quiet, but noteworthy changes to search for mobile optimized performance.
WHAT'S NEXT
Given the radical innovation that is online video, we wouldn't be surprised to see Alphabet Inc make some changes to YouTube for mobile as well -- much like Netflix is trying. Here is the impact of YouTube on Google's revenue:
Source: eMarketer
YouTube is on the verge of being more than 10% of Alphabet Inc's total ad revenue. I'd say, look mobile, and look there soon.
The author has no position in Alphabet Inc (NASDAQ:GOOGL) or Facebook Inc (NASDAQ:FB).
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