Google is the Least Diversified Technology Company

by Knowlton Thomas | Research

Dan Frommer over at SplatF decided to figure out how diversified today's top technology companies are. There's a thousand ways to slice and splice the sort of data he uses, so his results can certainly be debated, but he exercises a simple method that works well enough: which companies draw the highest percentage of their revenue from a single product or service? 

According to his calculations, Google is the least diversified business in tech, relying on one thing—advertising—to pull in over 95% of its revenue. That sounds like a terrible business model on paper, but it's hard to argue with the company's multi-billion-dollar success. Amazon is number second with "product sales," which is arguably an unfairly broad category—after all, they no longer sell just books, but an extremely wide range of goods. And certainly the Kindle sales shouldn't be included with regular, third-party product sales, because that's their own major side project.

Most of the non-diversified companies, Amazon aside, are advertising based: Pandora, Facebook, Yahoo, AOL. You'd likely see Twitter way up there but Dan only covered those who reported numbers in the December 2011 quarter. HP is the most diversified, relying on PC sales for only 30% of its revenue.

An interesting follow-up chart would be profits, where Apple and its iOS devices—the iPhone accounts for over half its business and boasts staggering margins—would surely dazzle.

Chart: Dan Frommer, SplatF

Vancouver, British Columbia, Canada, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest Selection., Inc., seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. and other... more

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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes and author of Tempest Bound. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys hiking, tennis, and martial arts. more

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