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Step into the story behind the business
In the high light, the dark tide surges
Written by Chen Dengxin
Editor/Li Wenjie
Although Apple, Microsoft and Tesla are the most popular, Wall Street prefers Google.
According to CNBN, Google's parent company Alphabet recorded its best performance since 2009 and became the technology giant with the largest stock price increase in the United States in 2021, beating Microsoft, Apple, Facebook (renamed Meta) and Amazon on this indicator, even the popular fried chicken Tesla is slightly inferior.
In the high light, the dark tide surges.
Microsoft increased the NUMBER of AI voice, trying to confront Google head-on; Amazon took the lead in the cloud computing track, Google Cloud struggled to catch up but it was difficult to close the position; TikTok traffic reached the top in the United States, cutting into Google's hinterland...
Will Google in 2022 still become the "guest of honor" on Wall Street?
Microsoft adds AI voice to erect a "patent wall" for Google
AI has always been the core strategy of Google.
As the first player to press the AI shortcut key, Google has a deep foundation and technical advantages that are visible to the naked eye, and almost stabilize the Internet giants.
In this regard, the Internet giants have never been reconciled, and Microsoft is no exception.
In fact, as early as the founding of Microsoft Research in 1991, it was involved in AI, but it has always played the role of a follower of the industry and has not become a leader in the industry.
In 2015, AI also became the core strategy of Microsoft, and the contradiction between Microsoft and Google was irreconcilable.
Despite the tip of the needle against Mai Mang, Microsoft has always been in the ascendant, and now Microsoft has invested heavily in AI, and the competitive situation between the two sides has changed subtly.
On December 22, 2021, Microsoft announced that the $16 billion acquisition of AI voice giant Nuance was approved by the European Commission, which had previously been approved by the United States and Australia, which means that the second largest merger in Microsoft's history is a foregone conclusion.
According to public information, Nuance can be called the "originator" of intelligent voice, once occupying up to 80% of the global market share, and the number of users directly or indirectly serving exceeded 2 billion.
Source: Nuance official website, Guotai Junan Securities Research
Nuance, for example, helped Apple's iOS system launch Siri in 2011, one step ahead of Android's Google Now (2012) and Windows' Cortana (2014).
In other words, Microsoft is trying to challenge Google's position in the field of AI.
According to the research report of Huaxi Securities, the current global intelligent voice market size accounts for 22% of the total market size of the AI industry, second only to 37% of machine vision, while Nuance's share of the global intelligent voice market is 31.6%, higher than Google's 28.4%.
After Nuance has Microsoft's blessing, Google's pressure on the AI track has increased sharply in 2022.
On the one hand, Nuance has been deeply engaged in the medical field for many years, and the first-mover advantage is obvious, and has established a "patent wall" that Google cannot avoid, so that Google's expansion in the field of AI medical treatment may slow down.
On the other hand, Cerence, a subsidiary of Nuance split, is the global leader in automotive software AI voice, according to the research report of Tianfeng Securities, the market share in 2020 is 38.08%, so Google has one more opponent in the field of car intelligence.
An Internet observer told Zinc Scale: "Voice is the traffic entrance in the intelligent era, but also the place where soldiers must fight, Microsoft is trying to overtake in curves, which tests Google's AI heritage, whether it can continue to build high AI technical barriers." ”
Google Cloud, why is it difficult to go to the next level?
Outside of AI, cloud computing is seen by Google as the second curve.
Google is the earliest batch of players in cloud computing, only two years later than Amazon, but has not paid enough attention, so Google Cloud has been tepid for a long time.
Until Amazon AWS and Microsoft Azure shined, Google did not come back to God, cloud computing is an indispensable mainstream track for Internet giants, and the industry ceiling is out of reach.
In this regard, former Google CEO Eric Schmidt once lamented: "We did not put the right stepping stone into the clouds." ”
So Google adjusted its organizational structure in 2015 to establish Google Cloud and set an ambitious goal: by 2020, Google Cloud will be on par with the advertising business.
The ideal is very full, the reality is very bone.
Google's operating income in the third quarter of 2021 was $65.12 billion, an increase of 41% year-on-year; of which, the operating income of the cloud computing business was $4.99 billion, an increase of 45% year-on-year, although the growth rate was higher than the overall, but it accounted for only 7.66% of the total revenue; the operating loss was $644 million, compared with $1.21 billion in the same period last year.
Not only is the revenue structure not as expected, but the vision of catching up with Amazon and Microsoft has also failed.
Google Cloud has always been subordinate to Amazon and Microsoft
According to Synergy Research Group, Amazon's AWS market share is 33%, Microsoft Azure's market share is 20%, and Google Cloud's market share is only 10%.
The reason is that cloud computing is an incremental market, not a stock market, not a competitive situation in which one or the other is trade-off.
More importantly, Google Cloud lacks the Genes for To B.
Cloud computing belongs to the To B category, for enterprises, institutions, organizations, to provide scenario-based precision application services, massive business data high-speed processing, low-cost and reliable IT infrastructure, if there is no deep understanding of the B-end business model, there is no long-term vision of the mature curve, then the understanding of cloud computing is naturally difficult to be profound.
In short, Google's strong geek culture is an advantage on the C side and a disadvantage on the B side.
Senior security engineer Blood Rose told Zinc Scale: Google advocates the geek culture of technology as the king, if you encounter customer, Amazon's attitude is 'get it, redo it immediately, and what needs you to say hello', and it is Google's turn to 'Oh, this is the most cattle technology at present, you said it has long been eliminated, it is recommended to keep up with the pace of the times'. ”
In this context, the Google Cloud experience naturally cannot satisfy everyone.
According to the Gartner report, "Some of the companies we surveyed reported a poor experience after using Google Cloud platform, which is largely due to the rapid growth of Google Cloud and the resulting organizational immaturity." ”
From this point of view, Google's cloud computing business in 2022 is still difficult to go to a higher level.
The crown of the "King of Advertising" is in jeopardy?
Compared with Amazon and Microsoft, TikTok is a greater threat to Google.
According to Cloudflare data, TikTok's global visits in 2021 will oust Google from the "brother" throne it has held for many years, and in 2020, it will only rank 8th.
This means that Google's position as the traffic overlord is not guaranteed.
The problem is that Google is the "king of advertising" and attaches great importance to traffic, after all, the larger the traffic means more active users, and the more active users, the easier it is to attract advertisers.
For example, Google and Facebook both rely on advertising for a living, but the former has historically had higher traffic than the latter, making it more popular with advertisers: Google's advertising revenue in the third quarter of 2021 was $53.13 billion, while Facebook's advertising revenue was $28.28 billion in the same period, just over half of Google's.
Google is the "King of Advertising"
In other words, TikTok cuts into Google's hinterland.
Google in 2022 is facing a basic disk defense war, which is related to the rise and fall of the future, and there is no room for sloppiness and laxity, but in the context of more and more young people favoring TikTok, it is still unknown how much effect it has.
In fact, Google has targeted the launch of short video Shorts, eager to compete with TikTok, trying to curb the rising traffic of the latter.
Unfortunately, due to the lack of characteristics, young people do not eat the "imitation" set, which does not have much impact on TikTok.
A private equity person told Zinc Scale: "Do short videos, Google wants to be simple, not with funds, technology, talents can be, that is a necessary condition but not a sufficient condition, there is no subversive play, long-term layout, strategic thinking, can not get rid of the fate of marginalization, play tickets and benchmarking that is essentially different." ”
Still, Google's 2022 has something to look forward to.
First of all, the launch of the smart watch Pixel Watch, restart the wearable device business, or pave the way for the current hot meta-universe, after all, wearable devices are an important entrance to the meta-universe.
Second, the venture capital business has entered a harvest period, with Google's investment income in the third quarter of 2021 of $188 million, compared with $26 million in the same period of 2020, with a year-on-year upward momentum.
Third, the development of new energy vehicles is in full swing, the demand for intelligent driving is also rising, Google's Waymo has been deeply engaged in intelligent driving for many years, and is currently landing in many cities around the world, which is also a big point of view.
All in all, although Google has the largest gain in 2021 among the US stock technology giants, it has a pacesetter Amazon, Microsoft, and then TikTok, whether it can withstand the pressure and successfully accept the challenge in 2022, let us wait and see.
END
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