Why Google can’t stop investing

Google's parent, Alphabet, must keep investing heavily in the crucial growth area of cloud computing.

It seems "hard to quibble with the continued success of Google's advertising business", says Shira Ovide on Bloomberg Gadfly. Advertising revenue at Alphabet, Google's parent company, rose $12bn last year, meaning that "in a single year Google found new business that was equivalent to half of Facebook's total yearly sales".

But the firm has a potential weakness. Advertisement sales on third-party sites, where Google acts as a middleman, are growing much more slowly than those on its own sites (web search pages, YouTube, Gmail and so on). If Google's own sites were to decline in popularity, it would leave the firm vulnerable. Just look at once-dominant Yahoo to see how that can happen. "Technology changes quickly and can turn today's internet stars into tomorrow's internet losers."

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Ben Judge

Ben studied modern languages at London University's Queen Mary College. After dabbling unhappily in local government finance for a while, he went to work for The Scotsman newspaper in Edinburgh. The launch of the paper's website, scotsman.com, in the early years of the dotcom craze, saw Ben move online to manage the Business and Motors channels before becoming deputy editor with responsibility for all aspects of online production for The Scotsman, Scotland on Sunday and the Edinburgh Evening News websites, along with the papers' Edinburgh Festivals website.

Ben joined MoneyWeek as website editor in 2008, just as the Great Financial Crisis was brewing. He has written extensively for the website and magazine, with a particular emphasis on alternative finance and fintech, including blockchain and bitcoin. 

As an early adopter of bitcoin, Ben bought when the price was under $200, but went on to spend it all on foolish fripperies.