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Google was founded in 1997 and is now part of parent company Alphabet. Google is mainly known for the popular search engine that generates incredible amounts of revenue every year. In the last quarter of 2016, Google realized a total of 26,1 billion US dollars in just three months (Roettgers, 2017). This came down to a growth rate of 22,1 percent compared to the last quarter of 2015. Especially for a company with these growth rates, it’s even more impressive when considering that the current market capitalization is already near 700 billion (Yahoo Finance, n.d.).

As mentioned, the Google search engine is one of the main contributors of this revenue through advertising. Currently, 86 percent of the 26,1 billion in revenues is generated through advertising, which consists of AdWords and AdSense (Alphabet, 2017). AdWords currently enables companies to place bids on advertisements on the Google Search Engine (Wordstream, n.d.). AdSense uses the same bidding technology to show advertisements on other websites, which also helps other websites in taking the most out of their webpage.

AdWords and AdSense disrupt the advertising industry by allowing companies to target specific groups of consumers with their advertisements. A marketer can use these applications and select multiple criteria and Google will analyze where the advertisement delivers the most promising results, based on for example comparable click through rates, related keywords and geographical data (Wordstream, n.d.). Google is dependent on the success of the advertisement as well because of the cost per click method, which means no clicks is no revenues. Google also incentivizes companies to come up with interesting advertisements, because a higher quality on the Google Quality Score will lead to lower costs per click and is a second requirement for winning the auction besides the price. This alignment of interests reduces the possibility for information asymmetry for all parties.

So, Google combined electronic auctions with an integration between the own search engine and other websites to establish the dominant position they have today. The advertisement industry can in the future be further revolutionized by looking at the clickstream of the consumer. Not all online consumers behave the same and to increase sales, they should not all be treated the same on certain websites. For example, there are consumers who find online advice convenient and helpful while others prefer more detailed data. In general, it is expected that websites and advertisements are more preferred and increase sales if their characteristics match consumers’ cognitive styles. The concept of morphing involves automatically matching the basic ‘look and feel’ of a website, not just the content, to cognitive styles (Hauser et al., 2009). This concept has already been proven to increase click through rates in website design (Hyper Morphing Technologies, 2017).

So, this industry can be further revolutionized by more effective and customized advertising. Google is already well positioned to take full advantage of additional innovations because of the alignment of interests between Google and the advertisers. So, the 26,1 billion US Dollars in quarterly revenues can be just a start!

 

References:

Alphabet (2017). Alphabet announces fourth quarter and fiscal year 2016 results. [online] Available at: https://abc.xyz/investor/news/earnings/2016/Q4_alphabet_earnings/ [Accessed: October 12th].

Hauser, J. R., Urban, G. L., Liberali, G., & M. Braun (2009). Website morphing. Marketing Science, 28(2), 202-223.

Hyper Morphing Technologies (n.d.). Morphing. [online] Available at: https://hypermorphingtechnologies.com/morphing/ [Accessed: October 12th].

Roettgers, J. (2017). Alphabet Generates $26 Billion Revenue in Q4, Google CEO Calls Hardware Sales Promising. [online] Available at: http://www.nasdaq.com/article/alphabet-generates-26-billion-revenue-in-q4-misses-expectations-on-earnings-cm738995 [Accessed: October 12th].

Wordstream (n.d.). What Is Google AdWords? How the AdWords Auction Works. [online] Available at: http://www.wordstream.com/articles/what-is-google-adwords [Accessed: October 12th].

Yahoo Finance (n.d.). Alphabet Inc. (GOOG) Stock Quote. [online] Available at: https://finance.yahoo.com/quote/GOOG/ [Accessed: October 12th].

 

 

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Reports of the International Energy Agency, talks about a new OPEC-deal and monthly updates considering the American oil reserves influence the markets for commodities significantly. Many traders speculate in advance or respond to after the information is made available to the public. This results in fluctuating prices with very high trading volumes. So, it doesn’t take a rocket scientist to understand how much profit you can make if you can obtain this information before the market does. But it does take a rocket scientist to accomplish this advantage by using earth-imaging from satellites.

Earth-imaging works by letting satellites fly in orbits around the earth and with the use of high definition camera’s they can constantly take pictures. All these pictures are then combined in one display and made available for analysis by using the cloud (The Economist, 2017). One example of a company that is actively involved in this technology is Urthecast. Visiting the company’s website can give a very clear image of how precise this technology is.

Earth-imaging or geospatial intelligence becomes a more and more a critical data source for people working in agriculture, the energy sector and even in the finance sector (The Economist, 2017; Scoles, 2017). Especially the finance sector seems interested in getting information in a timelier manner. The obtained information is valuable for hedge funds involved in commodity trading, because it is possible to estimate the change in oil reserves by analyzing the shadow of the oil tanks and therefore knowing how full the tanker is with oil (Kearns, 2017).

Besides the commodity markets, geospatial intelligence can also be used to obtain information about how companies are performing. This can be done by analyzing the occupancy rates of car parks outside big retailers (The Economist, 2016). It is not certain if these metrics are valid proxies for the companies’ financial performance, so high volume investments should be made with caution. But the advantage of time is so significant, that the problem of unreliable data can be overcome by additional research.

 

References

Kearns, J. (2017). Satellite Images Show Economies Growing and Shrinking in Real Time. Bloomberg Business Week, July 9^th 2015. [online] Available at: https://www.bloomberg.com/news/features/2015-07-08/satellite-images-show-economies-growing-and-shrinking-in-real-time [Accessed: September 27th 2017].

Scoles, S. (2017). 88 NEW SATELLITES WILL WATCH EARTH, ALL THE TIME, ALL THE PLACES. Wired, February 14^th 2017. [online] Available at: https://www.wired.com/2017/02/88-tiny-satellites-will-watch-time-everywhere/ [Accessed: September 27^th 2017].

The Economist (2016). The watchers. The Economist, August 18^th 2016. [online] Available at: https://www.economist.com/news/business/21705369-alternative-data-firms-are-shedding-new-light-corporate-performance-watchers [Accessed: September 27th 2017].

The Economist (2017). Planet’s satellites offer customers a new world view every day. The Economist, February 16^th 2017. [online] Available at: https://www.economist.com/news/business/21717110-analysing-images-space-could-be-big-business-planets-satellites-offer-customers-new-world [Accessed: September 27th 2017].

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When you think about facial recognition technology and its applications, guessing the sexuality of individuals might not have been your first thought. Research at the Stanford University found that a system could learn to recognize facial characteristics of the different sexualities (The Economist, 2017). It doesn’t look very useful, but it does illustrate the significant progress that has been made in developing this technology. Because of these improvements there is now a wide variety of applications for the technology and therefore facial recognition becomes more and more important for collecting data. But when individuals become more easily traceable, privacy concerns can become a serious issue (Chapman, 2016). However, these objections are also present at other data collection technologies. So, is facial recognition a more serious threat to your privacy?

It is important to mention that facial recognition has many useful applications like tracking shoplifters, keeping an eye on supporters in a stadium and other security features (The Economist, 2017). The Chinese tech company Baidu wants to develop a system for picking up your rail tickets by showing your face (Knight, 2017). Apple adopted this technology to use it as a feature to unlock the new iPhone X and for payment methods and already has experience with other biometric technologies like fingerprint identification (Metz, 2017).

However, there is a big difference between facial recognition and other biometric verification methods: for facial recognition, there is nowhere to hide because it works from a distance. Unless you’re wearing a ski mask, facial recognition will notice your presence. This might sound like a serious breach of privacy, because it works anywhere without your permission. But it can be argued that although faces belong to individuals, they are available or visible to the public and therefore it’s not compromising your privacy rights (The Economist, 2017). Making the picture in a public area is allowed and the recognition of your face is an independent aspect of it.

So, the data can be very sensitive, but doesn’t differ from technologies like GPS-tracking of smartphones. Therefore, facial recognition isn’t a more problematic technology when we consider the privacy concerns. But it does seem more personal and therefore more sensitive, because it involves your face. So, facial recognition has a wide variety of applications and many have a promising future, but it does make it more important for the data to be safely and privately stored. For mobile payment smartphone makers argued that people do not leave their homes without a smartphone, but can forget their wallet. This argument is even stronger for your face.

 

References:

Chapman, C. (2017). Facial Recognition Technology Raises Privacy Concerns. NBC News, November 6^th 2016. [online] Available at: https://www.nbcnews.com/tech/security/facial-recognition-technology-raises-privacy-concerns-n676836 [Accessed: September 27th 2017].

Knight, W. (2017). Paying with your face. MIT Technology Review. [online] Available at: https://www.technologyreview.com/s/603494/10-breakthrough-technologies-2017-paying-with-your-face/ [Accessed: September 27^th 2017].

Metz, R. (2017). Facial Recognition Is Only the Beginning. MIT Technology Review, September 20^th 2017. [online] Available at: https://www.technologyreview.com/s/608879/facial-recognition-is-only-the-beginning-heres-what-to-expect-next-in-biometrics-on-your/ [Accessed: September 27^th 2017].

The Economist (2017). Advances in AI are used to spot signs of sexuality. The Economist, September 9^th 2017. [online] Available at: https://www.economist.com/news/science-and-technology/21728614-machines-read-faces-are-coming-advances-ai-are-used-spot-signs [Accessed: September 27th 2017].

The Economist (2017). What machines can tell from your face. The Economist, September 9th 2017. [online] Available at: https://www.economist.com/news/leaders/21728617-life-age-facial-recognition-what-machines-can-tell-your-face [Accessed: September 27th 2017].