From its inception as a search engine powerhouse to its diverse array of services under Alphabet, Google continues to shape the digital world. This guide provides a comprehensive breakdown of Google’s evolution, business units, and trends, equipping marketers with essential insights to navigate the dynamic ecosystem of Google.

How Google started

Google began as a search engine called Backrub, born out of Stanford University in 1996 by Larry Page and Sergey Brin, aiming to “organize the world’s information and make it universally accessible,” according to the company. Over the next few years, Backrub was rebranded to Google (a misspelling of the term “googol,” or one followed by 100 zeros), and after catching the attention of Silicon Valley investors, the founders had enough capital to set up their first office in Menlo Park, California. 

The history of Alphabet

Alphabet, Google’s parent company, was founded in 2015. This move separated Google’s core businesses from its other ventures, allowing Alphabet to venture into industries beyond its search business, such as healthcare and cybersecurity. 

Google’s business units

Google operates across various business segments, delineating its revenues into three primary segments: Google Services, Google Cloud, and Other Bets. Each segment represents distinct business units contributing to Google’s expansive ecosystem. 

Google Services

This segment encompasses an array of consumer-centric services, from the ubiquitous search engine to video streaming, hardware, and advertising platforms.

  • Search: Google’s search engine remains the cornerstone of its services, processing around 8.5 billion search queries daily. Its algorithmic sophistication and user-centric approach define the digital landscape.
  • Workspace: Google Workspace is a collection of cloud-based productivity and collaboration tools that includes Gmail, Google Drive, Docs, Sheets, Slides, Calendar, and Meet. It provides integrated user experiences, security features, and administrative controls for individuals and organizations through various pricing plans. It initially launched as G Suite. 
  • Advertising: Google’s advertising platform, including Google Ads and Display Network, provides marketers with powerful tools to reach target audiences through search and display ads across various platforms.
  • YouTube: As the world’s largest video platform, with 241.8 million US viewers in 2024, saturating 95.1% of the country’s OTT video service users per our February 2024 forecast, YouTube offers an extensive reach for video advertising, engaging diverse audiences through content ranging from entertainment to education.
  • Android and Pixel: More than half (50.4%) of US smartphone users will be using Google Android’s operating system (OS) this year, according to our February 2024 forecast. The popular OS powers Google Pixel and Samsung devices, as well as 32.6 million US connected car drivers in 2024.
  • Chromecast: Chromecast enables seamless streaming experiences, offering opportunities for targeted advertising within the streaming environment.
  • Wearables: With Wear OS, Google aims to establish a foothold in the smart wearables market that touts 103.8 million users in 2024, opening new avenues for advertisers to connect with consumers who use devices such as Pixel Buds earphones and FitBit fitness watches and clips.
  • Smart home: Google’s smart home ecosystem, including Nest devices, presents a growing platform for advertising innovation within the connected home environment.
  • Financial services: The company’s 36.3 million US Google Pay users, per our March 2024 estimates, will be migrated under Google Wallet in June 2024. Some features, including tap-to-pay in stores and online check-out, will remain accessible, while others, such as peer-to-peer payments, will be phased out in the consolidated experience. 
  • Shopping: Google Shopping generates paid product listings based on a user’s search terms and filters. In 2024, Google will claim more than half of US search ad revenue share, accounting for $62.87 billion, per our March 2024 forecast. 

Google Cloud 

Google Cloud Platform provides cloud computing solutions, offering businesses a robust infrastructure for storage, computing, and analytics, with increasing relevance in various industries.

Other Bets

Alphabet’s exploration extends to “Other Bets,” encompassing ventures such as life sciences, urban innovation, and moonshot projects, contributing to Google’s diverse portfolio. The segment combines businesses including biotech company Calico, self-driving car company Waymo, and venture capital firm GV, among others.  

Revenues from Other Bets are generated largely through sales of health technology through precision health company Verily and internet services through broadband internet provider GFiber. 

AI R&D and the development of general AI models such as Gemini, are included under Alphabet’s earnings. These AI-related investments have boosted other areas of Google’s business, including Search, YouTube, and Cloud, according to its CEO Sundar Pichai on Alphabet’s fourth quarter and fiscal year 2023 report. 

Advertising on Google

Google offers a range of ad formats based on campaign types available across multiple platforms for different marketing objectives and investments: 

  • App: Targeted toward mobile app promotion, these ads appear across various Google properties and partner networks, driving app installs and engagement.
  • Display: Display ads encompass visually engaging formats, displayed across websites, apps, and Gmail, allowing for rich media experiences to capture audience attention.
  • Discovery: Designed for users exploring content across Google properties like Discover, YouTube, and Gmail, these ads blend seamlessly into users’ browsing experiences.
  • Local: Tailored for businesses targeting local audiences, these ads appear in Google Maps and local search results, driving foot traffic and engagement. Google Business Profile, formerly called Google My Business, gives businesses tools to create listings in Search and Maps.
  • Performance Max: These automated ads leverage machine learning to optimize across various Google networks, maximizing ad campaign performance and reach.
  • Search: Text-based ads displayed on Google Search, these ads cater to user intent, capturing audiences actively seeking information or solutions.
  • Smart: AI-powered ads across multiple platforms, dynamically adjusting content to optimize performance and reach, catering to diverse audience segments.
  • Shopping: Product-centric ads that appear on Google Search, Images, and the Shopping tab, showcasing products and driving purchase intent.
  • Video: Video-centric ads on YouTube and across the web, offering various formats to engage audiences through compelling storytelling.
  • Analytics: Google Analytics 4 is Google’s latest version of its web analytics service that tracks and reports on website and app traffic. It offers features such as real-time reporting, audience demographics, conversion tracking, and integration with Google Ads

Google’s ad landscape in 2024 

Google is the biggest digital advertiser in the world, accounting for 27.7% of revenue share worldwide and beating second-place Meta by nearly $33 billion in 2024, according to our March 2024 forecast. The company will continue to have healthy growth through to the end of our forecast period in 2025, and see other major achievements: 

  • In 2024, Google’s ad revenues worldwide will grow 9.9%, reaching $187.66 billion. 
  • In the US in 2024, Google will bring in $77.49 billion in ad revenues, hitting $411.68 per search user. 
Google ad revenue data 2022-2025
A chart showing Google’s worldwide ad revenues, 2022 to 2025. (Subscribers only)

Search advertising on Google

This year, Google will see more than half (50.5%) of all US search ad spending. Although its search ad earnings will grow a little more than 7% each year through the end of our forecast period in 2026, its shares of the overall market are declining, per our March 2024 forecast.

Apple is in a promising position to steal market share after introducing its AppTrackingTransparency privacy framework in April 2021, which requires users’ permission to share data to advertisers. By next year, Apple’s search revenue will reach $6.32 billion—more than double what it was in 2021 at $3.05 billion, per our March 2024 forecast. 

The rise of retail media, particularly among major players like Amazon and Walmart, is also threatening Google’s shares. As the fastest-growing ad channel we track, retail media is expected to account for an increasing amount of search ad spend, making up 29.5% of search ad spending in 2025. 

Advertising on YouTube

YouTube’s ad revenue is on track to break the $10 billion milestone over the next couple of years, with YoY growth reaching 16% in 2026. YouTube’s ad growth is helping fuel a boom in in-app video advertising, which will capture over 30% of overall US mobile ad spend and more than 58% of US video ad revenue for the first time in 2024. 

In December 2023, in response to evolving viewer preferences, YouTube introduced fewer, yet longer ad breaks during long-form content on connected TVs (CTVs). This marks YouTube’s commitment to adapting its ad strategies, while balancing a positive user experience that retains viewers, as it capitalizes on the growing number of viewers watching YouTube Shorts on CTVs. 

YouTube TV 

With 21.5 million US YouTube TV viewers this year, according to our February 2024 forecast, it is one of the largest pay TV providers. Largely as a result of its acquisition of the NFL Sunday Ticket, YouTube TV viewership has boomed. By the end of our forecast period in 2028, YouTube will claim more than half of digital pay TV viewers. 

YouTube is one of most popular ways to access OTT, and advertisers have taken note. YouTube will generate $10.13 billion in OTT subscription revenue this year, marking its fifth consecutive year of double-digit growth since we started tracking it in 2020.

Google’s role in AI

Google stands with the major tech giants at the forefront of generative AI and machine learning, which power a wide range of applications from creating content to enhancing user experiences. 

For marketers, advancements in AI means new opportunities to create personalized campaigns and automated optimization. Google’s Smart Bidding, for example, uses algorithms, trained on expansive data, to make more informed bids that maximize conversion. 

In February 2024, Google rebranded its conversational AI tool Bard to Gemini. The frenzied adoption of ChatGPT in November 2022 had Google scrambling to release Bard, only for Alphabet to lose $100 billion in market value when the chatbot’s demo delivered incorrect facts. 

Gemini, however, is capable of processing even more data, across various input types such as text, images, audio, video, and code. Three models—ranging from Gemini Ultra at $20 per month for complex tasks, and free versions Gemini Pro to scale across a wide range of tasks and Gemini Nano designed for on-device tasks—go head-to-head with market leader ChatGPT, expected to have 87.9 million US users next year, according to our June 2023 forecast. 

Google’s dominance in devices, apps, and services could bolster Gemini’s adoption, too. Gemini AI is set to replace features on Google Search and Google Assistant, and could soon be made available through Pixel Buds and Gemini Enterprise solutions. Even Apple is betting big on the technology, in talks with Google to build Gemini into 2 billion iPhones.

companies US Senior decision-makers consider to be current vs future leaders in genAI
A chart showing companies that US senior decision-makers consider to be current versus future leaders in generative AI, August 2023. (Subscribers only)

Google in a cookieless future 

For almost three decades, third-party cookies have played a pivotal role in web functionalities, facilitating everything from personalized experiences to ad targeting. Although beneficial for advertisers, legacy identifiers raise privacy concerns, which prompted Google to commit to its full deprecation by H2 2024. However, racing lingering concerns about the timeline, Google announced in April 2024 it would delay deprecation until early 2025.  

The need for more privacy-centric advertising practices, without the use of cookies, gave rise to the Google Privacy Sandbox. Designed to prioritize user consent and data protection, the Privacy Sandbox is a set of proposed privacy-focused web standards and APIs that limit cross-site tracking. 

One of the primary components of the Privacy Sandbox is Tracking Protection. This feature operates by default, restricting the capabilities of websites to track users across different online platforms. 

Marketers and advertisers need to adapt to these changes by exploring alternative targeting methods, such as first-party data utilization and contextual targeting. Not all, however, are facing the problem head on: 1 in 4 US marketers and agencies were still using third-party cookies as of April 2023, per Advertiser Perceptions; and 78% or more of US programmatic ad buys across industries used cookies as of Q3 2023, per 33Across. 

types of identity solutions marketing professionals worldwide consider most viable solutions to deprecation of third-party cookies
A chart showing types of ID solutions that marketing professionals worldwide consider the most viable with the deprecation of third-party cookies, August 2023.

Google’s challenges and lawsuits

Google, Meta, and Amazon have each faced rising scrutiny from the US government as a result of their digital advertising triopoly. Combined with Microsoft and Apple, Big Tech will account for nearly two-thirds of US digital ad dollars this year, per our October 2023 forecast. However, antitrust enforcement, intended to preserve market competition and consumer choice, looms, and may have big implications for the ad landscape. 

The Department of Justice is moving forward with a litigation against Google, alleging the company has monopolized the ad tech market. The jury trial will begin Sept. 9, 2024, and if successful, Google may be forced to sell one or more of its ad tech stack.

Until then, Google has been focused on settling lawsuits, spending more than $1 billion since December 2023 to resolve several battles, including one filed by consumer plaintiffs over data collection in Incognito browsing mode.