Last week, a massive Google outage (opens in new tab) took down almost all the company’s services, with Gmail (opens in new tab), YouTube, Drive (opens in new tab), Meet (opens in new tab) and Docs (opens in new tab) all affected. It even paralyzed certain features of the company’s Android operating system, with mobile users unable to use apps such as Photos and Maps.
The outage lasted no more than an hour, but caused a significant stir online and highlighted the dramatic extent to which we are almost totally reliant on the services of a single company, both in personal and professional lives.
However, the ramifications go beyond just upsetting users, many of whom are wedged so tightly into the Google ecosystem that they would struggle to free themselves even if they wanted to. With services down for even as little as an hour, Google will also have lost out on millions in revenue.
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While Google Search (the largest source of advertising revenue) remained intact during the blackout, the company also stands to lose plenty in ad revenue whenever YouTube is down.
According to the Alphabet earnings report for 2019 (opens in new tab), YouTube ads brought in a whopping $15.15 billion over the course of the year. On average, then, YouTube was responsible for $41.50 million in ad revenue per day, and $1.73 million per hour (the rough duration of the outage).
However, as a leading analyst firm told TechRadar Pro, YouTube revenue is expected to grow by 30-40% this year. Based on reported ad revenue for Q3 this year (opens in new tab) and armed with these growth projections, it could be estimated that Google’s losses as a result of the blackout were actually in the region of $2.3 million.
While the outage also hit plenty of other products in the Google suite, the rest are either free (e.g. Gmail), single-payment (e.g. Nest) or subscription-based (e.g. Google Workspace), so would not have incurred direct losses during the brief period they fell offline.
But neither does the above figure take into account intangible losses the company may take on as a result of the blackout. Understanding that they are wholly dependent on a single service provider, will businesses and consumers seek to diversify as much as possible, or even switch to a competitor? And might Google be the subject of costly legal challenges from firms that were unable to operate during the outage?
While the loss of a few million dollars is but a drop in the ocean in the context of Google’s annual earnings across all revenue streams, it’s important to place it in context. According to figures from Statista, medium-sized businesses in the UK (with between 50-250 staff) take in just £294,000 (roughly $400,000) per year, 46 times less than Google made per hour ($18.48 million) in 2019.
Numbers this large are sometimes too abstract to fully comprehend; they are difficult to engage with and therefore easy to brush over. But could a highly tangible incident, like this week’s Google blackout, add fuel to debates around the pragmatism and ethics of monopoly and see the tide turn against Big Tech?
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