Business Profile of Alphabet Inc.

Google Business profile and competitive environment

All you need to know about Google:

  • Company Name: Alphabet Inc (Parent Company of Google)
  • Headquarters: Mountain View, California, United States.
  • Founders: Larry Page & Sergey Brin
  • Founded: 1998
  • Alphabet CEO: Mr. Sundar Pichai
  • Google Cloud CEO: Thomas Kurian
  • YouTube CEO: Susan Wojcicki
  • CFO: Ruth Porat
  • CMO: Lorraine Twohill
  • Markets Served: Global Markets 
  • Leading Markets: United States and Others
  • Number of employees 2020: 135,301
  • Global Revenues 2020: $182.5 Billion 
  • Net Income 2020: $40.27 Billion
  • Market Capitalization: $1.81 Trillion (As of January 13, 2022)
  • Research and development expenses: $27.6 Billion
  • Marketing Expenses: $17.95 Billion

About Alphabet Inc:

Alphabet Inc is the parent company of Google, the United States based search engine giant and advertising giant.

Alphabet was founded as Google in 1998 by Larry Page and Sergey Brin.

As the company expanded, the founders restructured it and the parent company was named Alphabet in 2015.

The company has its headquarters at GooglePlex in Mountain View, California, United States.

Alphabet’s largest and core business is Google, the search engine and advertising giant. However, it also owns some other businesses that are collectively called other bets and the social media platform YouTube.

Apart from its search engine and advertising business, the company is also a leading player in the cloud industry, where it competes against rivals including Amazon and Microsoft.

The company generates a substantial part of its revenues from search advertising.

Its Cloud platform (GCP) is also a significant source of revenue for the company.

Google has continued to strengthen its position in the online advertising and cloud industries.

Its core advantage lies in the search advertising industry where it holds the lion’s share.

Since its introduction, the search engine has continued to hold the leadership position in the global market as the favorite search engine of users worldwide.

Google’s market share of search engines in September 2021 was close to 87%, followed  by Bing’s at close to 7%.

Yahoo was the third largest search engine at that time with a market share of 2.75%.

Alphabet’s CEO is Sundar Pichai.

Susan Wojcicki is the CEO of YouTube, while Thomas Kurian heads Google’s Cloud Platform as its CEO.

Alphabet’s CFO is Ruth Porat and its CMO is Lorraine Twohill.

Alphabet is a global business and mainly an internet services company that sells its services including search, advertising, and cloud services to customers throughout the globe.

Its largest market is the United States, which generated almost 47% of its net revenues in 2020.

Alphabet is among the largest tech brands in the United states with a market capitalization of $1.81 Trillion in Jan 2022.

Its leadership position in the tech industry is based on its huge market share in search engines, global popularity and its heavy focus on innovation.

The company spends heavily on research and development.

However, in its history it has also faced a lot of legal scrutiny over monopolistic behavior and its dominance in the online advertising industry.

Business operations and important markets:

Alphabet has divided its global business operations into four geographical regions that include the United States, APAC, EMEA and other Americas.

Its largest geographic business segment is the United States, which accounted for 47% of the company’s net revenues in 2020, followed by EMEA and APAC.

The Other Americas are the smallest geographic business segment which accounted for only 5% of the company’s net revenues in 2020.

Since the United States is the largest market of the company, Google has the highest number of data centers and offices located here.

Google (Alphabet) is a global business with a vast empire that spans the entire globe and operates mainly online.

The company keeps its global business operational through its large network of data centers.

Its data centers are operational throughout the world in four continents and mainly North America.

According to Alphabet’s website, the company has 23 data centers operational worldwide, of which 14 are located in the United States alone.

The company has six data centers in the European region, two in Asia and one in South America.

Here is a list of Alphabet (Google) datacenter locations:

North America:

  • Berkeley County, South Carolina.
  • Council Bluffs, Iowa.
  • The Dalles, Oregon.
  • Douglas County, Georgia.
  • Henderson, Nevada.
  • Jackson County, Alabama.
  • Loudoun County, Virginia.
  •  Lenoir, North Carolina.
  • Mayes County, Oklahoma.
  • Midlothian, Texas.
  • Montgomery County, Tennessee.
  • New Albany, Ohio.
  • Papillion, Nebraska.
  • Storey County, Nevada.

South America

Quilcura, Chile.

Europe

  • Dublin, Ireland.
  • Eemshaven, Netherlands.
  • Frederecia, Denmark.
  • Hamina, Finland.
  • Middenmeer, Netherlands.
  • St. Ghislain, Belgium.

ASIA:

  • Changhua County, Taiwan.
  • Singapore.

Google’s business operations are carried out mainly.

Its data centers play a significant role in helping Google operate efficiently.

Alphabet operates its business through regional offices worldwide.

As Alphabet’s business around the world has continued to expand, the company’s number of office locations has also exploded.

As of January 2021, the number of Google’s office locations in the United States and Canada including small and large offices and its headquarters was 69.

Google had eight offices in Latin America and 40 in Europe.

Google’s EU headquarters are located in Dublin, where the company has also opened a datacenter.

The company has 28 offices in the Asia Pacific, and seven in Africa and Middle East.

List of Google Office locations as of January 2022:

North America

  • Addison
  • Alameda
  • Ann Arbor
  • Atlanta
  • Austell
  • Austin
  • Berkeley County
  • Boulder
  • Bridgeport
  • Cambridge
  • Chandler
  • Chapel Hill
  • Charlotte
  • Chicago
  • Cincinnati
  • Clarksville
  • College Park
  • Council Bluffs
  • Dallas
  • Detroit
  • Douglas County
  • Durham
  • Edmonton
  • Fairburn
  • Farmington Hills
  • Gardnerville
  • Goleta
  • Henderson
  • Irvine
  • Kansas City
  • Lenoir
  • Livermore
  • Los Angeles
  • Madison
  • Mayes County
  • Miami
  • Midlothian
  • Montreal
  • Mountain View (Global HQ)
  • Nashville
  • New York
  • Novi
  • Ottawa
  • Palo Alto
  • Pittsburgh
  • Portland
  • Provo
  • Raleigh
  • Redwood City
  • Reston
  • Salt Lake City
  • San Antonio
  • San Bruno (YouTube)
  • San Diego
  • San Francisco
  • San Jose
  • Seattle / Kirkland / Bellevue / Redmond
  • Sterling
  • Sunnyvale
  • The Dalles
  • Thornton
  • Toronto
  • Vancouver
  • Washington D.C.
  • Kitchener-Waterloo
  • White River Junction

Latin America.

  • Belo Horizonte
  • Bogota
  • Buenos Aires
  • Lima
  • Mexico City
  • Rio de Janeiro
  • Santiago
  • Sao Paulo

Europe.

  • Aarhus
  • Amsterdam
  • Athens
  • Berlin
  • Bratislava
  • Brussels
  • Bucharest
  • Budapest
  • Copenhagen
  • Dublin (EU HQ)
  • Eemshaven
  • Frankfurt
  • Grenoble
  • Hamburg
  • Hamina
  • Helsinki
  • Kiev
  • Krakow
  • Lisbon
  • London
  • Lubeck
  • Madrid
  • Malaga
  • Manchester
  • Milan
  • Moscow
  • Munich
  • Oslo
  • Paris
  • Prague
  • Rennes
  • Rome
  • Saint-Ghislain
  • Stockholm
  • Vienna
  • Vilnius
  • Warsaw
  • Wroclaw
  • Zagreb
  • Zurich

Asia Pacific

  • Auckland
  • Bangalore
  • Bangkok
  • Beijing
  • Brisbane
  • Canberra
  • Changhua County
  • Guangzhou
  • Gurgaon
  • Hong Kong
  • Hyderabad
  • Jakarta
  • Kuala Lumpur
  • Manila
  • Melbourne
  • Mumbai
  • Osaka
  • Seoul
  • Shanghai
  • Shenzhen
  • Singapore
  • Sydney
  • Tainan City
  • Taipei
  • Taoyuan
  • Tokyo
  • Wellington
  • Zhubei City

Africa & Middle East

  • Accra
  • Dubai
  • Istanbul
  • Johannesburg
  • Lagos
  • Nairobi
  • Tel Aviv & Haifa

Alphabet (Google) Products and services:

Alphabet offers a wide range of products and services. 

A large group of services offered by Alphabet (Google) are internet based services like a search engine, advertising, analytics, cloud services, maps and others.

Its main source of revenue or core product is search advertising. 

Alphabet’s core business was Google but the company also expanded its business through a set of acquisitions made over time.

Among its most prominent acquisitions were YouTube and Double Click.

Other key acquisitions made by Google include Nest, Waze, Fitbit and Looker.

While the acquisition of DoubleClick helped Alphabet cement its position in search advertising, the acquisition of YouTube helped it cement its position in the social media industry.

Google offers a diverse range of products and services many of which you use daily and have grown used to taking for granted.

Its Android OS, search engine, Chrome, gmail, and maps are some of the products that are used by billions of users across the globe for free.

However, on some of these products like gmail and other products the level of free use is limited. 

Businesses or individuals can purchase extra space or capacity at competitive prices.

Here is a brief list of products and services offered by Alphabet (Google): 

  • Google Search
  • Google Maps
  • Google Translate
  • Google Chrome
  • YouTube 
  • Chromecast
  • Pixel
  • Pixel Slate
  • Google Connected Home
  • Google wifi
  • Android OS
  • Wear OS
  • Chromebook
  • Android Auto
  • Gmail
  • Messages
  • Google Duo 
  • Google Chat
  • Google Photos
  • Contacts
  • Calendar
  • Google Drive
  • Google Ads
  • Google Adsense
  • Analytics
  • Google Scholar
  • Google Play
  • Google Assistant

Apart from these, the company provides a vast range of cloud based services from GCP (Google Cloud Platform).

Main GCP products and services include :

  •  AI and Machine Learning
  • API Management
  • Compute
  • Containers
  • Data Analytics
  • Databases
  • Developer tools
  • Healthcare and life sciences
  • Hybrid and MultiCloud
  • Internet of Things
  • Management Tools
  • Media and Gaming
  • Migration
  • Networking
  • Operations
  • Security and Identity
  • Serverless Computing
  • Storage

Customers and Distribution Channels

Google serves a global customer base.

Worldwide 4.3 billion users use the google search engine and it had 3.5 billion unique visitors in April 2021 alone.

Its popularity can be understood from the fact that each second Google serves more than 40,000 second queries.

There are several such facts and stats about Google that will blow your mind.

However, it is an innovative brand that serves the needs of a global user base and has localized its search  engine for various geographical regions to cater to customer demand more efficiently.

According to Statista, the largest segment of internet users is made up of users in the 18 to 44 age group.

This is also the most important user segment for Google. 

The largest segment of internet users are in the millennial and Gen Z Segment.

As internet use has increased globally, people across various income segments and geographic regions are using search to locate and find useful information, products and services.

One of the key reasons behind the heavy popularity of Google’s search engine is that it makes it easier to search for products and services available locally.

A large segment of Google customers also includes developers and enterprises of various sizes.

Google Cloud Platform and other products like Gmail and Google Drive serve a vast segment of developers and enterprises of various sizes.

Google also hacked into a vast base of social media users with its acquisition of YouTube.

Worldwide users search for their favorite music on Google.

Millions of businesses worldwide use YouTube for video marketing and social media promotions and to reach a vast user base available on the video sharing platform.

Google Scholar serves the needs of students, educators and researchers globally.

It has helped Google hack into a large user base of students, teachers and researchers from across the globe and is considered one of the most credible sources for scientific and other research available online.

The main distribution channel used by Google for making its products and services available worldwide is the internet. 

It is mainly an internet technology company that makes its services available to users throughout the globe online with the help of its data centers located across four continents.

From search to Gmail, YouTube, maps, Google Drive, Google’s Cloud services, and Google docs, users can access it all online.

However, Google also makes some hardware products that are made available to customers worldwide through online channels and through distributors and resellers.

Competitive environment of Google (Alphabet):

Google is one of the largest players in the tech industry with a market capitalization of more than $1.8 Trillion in Jan 2022.

The tech industry has experienced  a lot of growth in the last five years.

From the fast growth of cloud services, AI, Machine Learning and widespread adoption of digital technology to growing use of internet technology worldwide, a lot has changed in our world which can be attributed mainly to technological advancement.

Google has remained at the forefront of this transformation.

It operates in a highly competitive environment and among its leading competitors are the largest tech businesses like Apple, Microsoft, Amazon and Facebook.

All these brands invest aggressively in research and development to maintain their competitive edge and to grow their market share.

Google is operating in a hypercompetitive industry environment where the focus on user experience and technological innovation is a lot higher compared to ten years ago.

Internationally, China based technology businesses like Tencent and Alibaba are also among the leading competitors of Google.

Apart from the large and established companies, the company is also experiencing higher competitive pressure due to the entry of several lesser known startups with significant technological resources and capabilities.

Operating in a highly competitive environment means Google has to devote more resources to innovation and user retention.

Here is a brief list of Google Competitors in various fields:

Search Engines:

Google is the largest and most popular search engine globally.

There are a large number of competitors that include big and small players.

Most important ones that compete with Google’s search engine include Bing, Yandex, Yahoo, Baidu, DuckDuckGo,  Naver and Seznam.

Cloud Services Providers:

There is a long list of Cloud services providers that compete with Google’s cloud platform.

Google itself is among the three largest cloud players

Amazon and Microsoft are currently ahead of Google in this area.

However, Google’s market share continues to grow driven by a higher focus on innovation and user experience.

Apart from the two other leading players, there are many more significant names in the cloud industry that also compete with Google.

Some of them are Salesforce, Oracle and Sap.

Social networks:

Google cemented its position in the social media industry with its acquisition of YouTube.

There are a large number of brands competing with YouTube in this field also including Facebook, Twitter, and Snapchat.

Vertical search engines and e-commerce websites:

In many cases, users just go to the most well known websites and e-commerce websites for information rather than search through Google. Here is a list of such large sites and directories.

Amazon, Aliexpress and Ebay (Ecommerce).

Booking’s Kayak (Travel queries).

Linked In (Job queries).

Web Md (Health queries).

Online advertising platforms and networks:

There are several more online advertising platforms and networks that also compete with Google’s digital advertising services.

While, Āmazon and Facebook are the two leading competitors of Google in this area, there are more competitors in the market including App Nexus and Criteo.

Criteo is a provider of online display advertising services and App Nexus offers cloud based programmatic advertising solutions.

Digital video services providers:

Alphabet’s acquisition of YouTube made it a leading player in the digital video services sector.

Several more such providers have emerged over the past several years and the overall level of competition in this area has continued to increase.

Some of the leading competitors of Google’s YouTube and Google Play include Amazon (Prime), Netflix, Hulu, Apple, Disney, Facebook, TikTok, and AT&T

Apart from the above listed fields, Google has small and large competitors in more areas including outdoor advertising.

As competitive pressure in the technology industry has continued to grow, the company has also increased its investment in research and development.

In 2020, the company spent $27.6 billion on research and development compared to $26 billion in 2019.

How does Alphabet Inc make money?

The core source of the company’s revenue is advertising from which it generates a substantial part of its revenues.

Its advertising solutions help millions of businesses around the world promote their brand and products before a global customer base. 

Google offers a wide range of advertising solutions designed for various devices and offered in different formats.

Google services generate revenues mainly from brand advertising and performance advertising.

Brand advertising:

This type of advertising is targeted at growing brand awareness among users through the help of videos, text, images, and other types of interactive ads that are displayed across various devices.

Advertisers rely upon this form of advertising for their brand building campaigns.

Performance advertising:

This type of advertising is different from brand advertising.

Here the main aim is not to increase brand awareness but to achieve the desired response from the user.

For example, in the case of performance advertising, the advertiser will pay Google only when the user engages with its advertisement.

Google offers advertising tools that performance advertisers can use for creating simple text based advertisements that Google displays with search results and on other properties like YouTube.

Google Cloud:

Apart from Google services, another significant source of revenue for Google is Google Cloud.

Google Cloud generates revenues from the fees obtained from businesses for using Google Cloud services and Google collaboration tools.

Developers use Google Cloud services to test, build, and deploy applications on Google’s highly scalable and reliable cloud infrastructure.

Other Bets:

Alphabet also makes a small portion of its revenue from a  group of businesses collectively called Other Bets.

These other bets operate mainly as independent businesses and while some of them are generating revenues already, others are still in their early stages of development.

Alphabet Inc’s financial performance in 2020: A brief analysis.

In recent years, Alphabet Inc has experienced solid growth in its net revenues driven by increased demand for digital advertising, increased use of the internet worldwide, and the growth of cloud services.

Other factors that have helped the company grow its revenues include its increased focus on innovation, expanding products and services portfolio, and growth in popularity of services worldwide.

Alphabet Inc’s total revenues were $182.5 Billion in 2020 compared to $161.9 billion in the previous year.

Its total net revenues grew 13% in 2020 compared to the previous year.

The increase was mainly driven by growth in Google services revenue and Google Cloud revenues.

Google services revenue increased 11% or $16.8 Billion in 2020 compared to the previous year, while its Cloud revenues grew 46% or $4.1 billion compared to 2019.

Alphabet’s total cost of revenues grew 18% compared to the previous year reaching $84.7 Billion in 2020. 

Google spent $32.8 Billion on Traffic Acquisition in 2020 or 9% more compared to the previous year.

Google’s operating income was $41.2 billion compared to $34.23 billion in 2019; YoY increase of around 20%.

The company’s net income increased from $34.34 billion in 2019 to $40.27 billion in 2020.

Alphabet’s largest individual market is the United States, which generated $85 billion in net revenues in 2020.

The company has divided its business into four geographical segments that include the United States, EMEA, APAC, and other Americas.

The following table shows the geographic revenues of Alphabet Inc in 2020:

RegionNet Revenues 2020. (Billion)
United States$85
EMEA$55.4
APAC$32.6
Other Americas$9.4

The following table shows Alphabet’s revenues from each business segment for 2019 and 2020:

Business Segment2019 Revenues (Millions)2020 Revenues (Millions)
Google Search & Other$98,115$104,062
YouTube Ads$15,149$19,772
Google Network members’ properties$21,547$23,090
Google Advertising$134,811$146,924
Google Other$17,014$21,711
Google Services total$151,825$168,635
Google Cloud$8,918$13,059
Other Bets$659$657
Hedging gains$455$176
Total Revenues$161,857$182,527