The most successful startup in history


Updated on June 30, 2020
Topics: ,
3 min well spent

I think it’s fair to say Google is the most successful startup in history.

No other company is able to grow at a continuous +20% YoY revenue.

Google went public at $54 a stock and recently hit $1,479 in January 2020. That’s a 27x return if you have the patience to hold.

The genius behind Google is made up of 3 parts:

  1. The PageRank patent, which is the idea to rank sites by their references.
  2. Combining freemium results with a bidding ad marketplace.
  3. Continuously setting the bar higher for sites to rank well.

One of the biggest feats Google accomplished is to get webmasters, SEOs, and brands to do everything to give Google what they want. Yes, we SEOs have a responsibility here! We even mark our code up to train Google’s machine learning algorithms.

The challenge, of course, is to keep that growth up with 82.5% ad revenue (Q3 2019 report).

The big picture

One rabbit Google pulled out of the hat was to push the web towards mobile-first.

See, the genius behind mobile-first wasn’t to make the web better for smartphone users but to add another layer to display ads – Google doubled the ad real estate!

But, as life has it, success begets an expectation for more success.

So, what other contenders for revenue streams are there? Well, there’s Google Maps, which seems to slowly show more ads. As it integrates more local businesses, such as bars, restaurants, hotels, and more, it could venture into a bigger revenue stream over time.

Or it could be simply more ads in Google Search, even though I have a feeling that the SERPs are maxed out in terms of ads. However, I don’t really have data to prove that.

It could be the growing commoditization of brands, as it happens in Google Flights and Google Hotel search.

There might also be an ad play behind Discover, Google’s push and discovery feed on the homepage. Google could start showing ads next to “organic results”.

Lastly, image search – the second largest “search engine” after organic search – could drive way more ads than it already does.

The bigger picture

The merger between Google and Youtube into Alphabet was certainly a smart move because it allowed Alphabet to now disclose Youtube’s impact on revenue for the longest time. Until Q4 2019.

Youtube’s share of Alphabet’s revenue is growing while Search is shrinking – fast. In fact, while revenue from Google Search shrunk -1.1 from 2017 to 2018 and -2.6% from 2018 to 2019, Youtube revenue grew by +11% and +15% respectively!

Not only that, but total revenue grew slower in 2018 (+23.5%) than in 2019 (+18.2%). That’s pretty big and should tell you why you’re seeing multiple ads in a row on the Tubes.

The big questions are how many aces Google still has up its sleeves and how far it’s willing to go.