Google: Samsung And Apple Deal Facing Major Risks
While Samsung could be using Microsoft as a bargaining chip to negotiate a better deal with Google, it does highlight the uncertainties of Google's advertising-heavy business model.
Accordingly, advertising accounted for nearly 80% of Google's FY22 revenue base. In addition, search advertising accounted for more than 72% of its advertising revenue. Therefore, it's justified that Google executives are concerned, as search ads are projected to be the second-most lucrative segment margin at 55%, just below Play Store's 60%.
While we don't think investors need to panic now, it brings into focus how Google's contract renewal discussions with Apple over Chrome could pan out this year, as the contract is expected to be up for renewal.
Google's search advertising dominance is the primary source of its wide economic moat. It proliferates the network effect on its other advertising properties, driving user and advertiser growth. As such, if Microsoft can gain a foothold through Samsung, Google's moat could be weakened, and therefore its valuation assessment could be affected.
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102592272 : Google scrambling?
Jet Bomb : I don't think appl will help any company. no matter what they do without a new product. and a real battery that does what they claim.
Carter West OP 102592272 : Perhaps Samsung is just using this as a bargaining chip, but if it is actually replaced, it may mean that a new competitive landscape is about to form
Carter West OP Jet Bomb : Apple's bargaining power is too strong for both Microsoft and Google