| Somebody says this on pretty much every thread about Google, it's the go-to 'smart' thing to say about Google. Heres a list of advertising companies: https://en.m.wikipedia.org/wiki/List_of_advertising_agencies WPP Group is the biggest in the world. Does Google have the same DNA as WPP Group? Does that mean we can tell what Google will do by watching what WPP group does? Google was an engineering and search company before they had any advertising whatsoever. There are just things about what Google did then, and do now, that pushed them into an advertising based revenue model. Google's technology is based on gathering information about the structure of the web and user behaviour. That is their core competency, nobody does it better than them. They leverage that core competency, that killer unique advantage, to earn revenue through advertising. Is HBO's DNA advertising and subscriptions? Sounds like a magazine publisher to me, does HBO have the same DNA as Vogue Magazine or Time? Yes understanding their revenue model can tell you useful things about the constraints on a company. It can tell you about the forces that act on them to direct their behaviour, but to say that it constitutes their DNA is to put the cart way out in front of the horse. If Google finds a new revenue stream other than advertising, they will deploy their core competencies to exploit it, just as the carniverous ancestors of Panda Bears adapted to a herbivorous diet. Dont confuse ecological niche for innate nature. |
An ad agency works with companies to produce ads. It does the concepting and production of ads(etc.).
An 'ad service'(unsure of proper name) provides the medium of which to display the ads. These include tv stations, google, youtube(owned by google), facebook, amazon, all those annoying ones in free mobile games etc.
There's a huge difference to what wpp and google provides. Google earns 90% of it's revenue(source: https://www.investopedia.com/articles/investing/020515/busin... - i googled it) from ads.
That said I agree that just because google provides a platform for ads doesn't mean it's "dna" is based in advertising. It's a core component of the company, though, and drives everything else the company does.