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The great titans of technology generate more money in one year than the entire GDP of Spain.
Many large companies have recently presented their financial results for the first quarter of the year and many of us continue to be surprised to see so many zeros in a row. The titans like Google, Facebook or Amazon continue to generate trillions of dollars in profits, and these figures are rising every year. But… Where does that money come from?. That is the question that the colleagues at VisualCapitalist wanted to answer with their new and detailed graphic.
The great titans of technology generate more money in a year than the GDP of all of Spain // Financial Times
In a very visual breakdown, the minfographs show the origin of the bulk of the profits of the great technological titans in 2021. The trend is similar in all of them, either they sell us a product or service or they sell us to users as a product to advertising companies. The strategy varies depending on the company, but combining the revenues of Alphabet (Google), Facebook, Amazon, Microsoft and Apple, the sum amounts to 1.4 trillion dollars.This figure exceeds the GDP of all of Spainso you can get an idea of the figures they are dealing with.
The heritage of Amazon, the titan and leader of e-commerce
The origin of Amazon’s heritage is the least surprising of all. About 50% of the bulk of the profit comes from commissions and Amazon sales in the different country divisions. The other major source of income is also related to sales but corresponds to sales and transportation agreements with third parties. The money that comes from subscriptions to Prime and the ads that it hosts on the web represents just over 10% of its income.
- Amazon’s total revenue in 2021 amounts to more than 469,000 million dollars
Amazon revenue pivots on product sales
iPhone remains Apple’s crown jewel
In the Apple chart things get a little more interesting. In this case we are dealing with a company that produces technology and devices, but despite the offer, there is still a product that is clearly the winner. iPhone sales generate more than 50% of company profitswhile other products such as iPad, Mac or wearables (Apple Watch, Airtag, Airpods…) barely reach 10% each.
As a curiosity, Apple’s streaming services have generated almost 20% of its profit in 2021. Platforms such as Apple Pay, Apple Music or Apple TV continue to grow and the trend seems to be increasing year after year.
iPhone remains Apple’s biggest source of revenue
- Apple’s total revenue in 2021 amounts to more than 365,000 million dollars
Alphabet and Google: advertising as the main axis
Here we have the first example where the bulk of profits come from advertising. In Google’s case, nearly 70% of their revenue comes from ads on search, Youtube and tools like Maps or Gmail. On the other hand, Google has a SEM system so that companies can pay to position themselves in Google through Google Ads. This tool is what takes them away from the total dependence on ads, and makes up 12% of the total income.
- Aphabet’s total revenue in 2021 amounts to more than 257,000 million dollars
Google bets on ads within its own ecosystem of apps
Microsoft’s fortune: versatility in products and services
The case of Microsoft is the richest and most varied. While the rest of the companies depend on a product or service, Microsoft’s fortune is divided on several fronts. The main channel where the money comes in are Windows subscriptions, Azure services and servers, and all the products in the Office suite.
Microsoft is the only company on this list that has a specific division focused on video games. Although it is one of the most powerful gaming companies in the world, Xbox revenues barely symbolize 10% of the enormous amount that Microsoft is capable of generating every year. On another front are revenue from ads or platforms like Linkedin.
- Microsoft’s total revenue in 2021 amounts to more than 168,000 million dollars
Microsoft’s revenue comes from different fronts
The Meta strategy: you are the product
Meta is the clear example that users are essentially its largest source of income. Zuckerberg’s company earns 97% of its capital through Facebook ads and Instagram. Considering that hundreds of millions of users log into their social networks, thousands of companies advertise their products daily to attract sales. Facebook thus works as a showcase for ads, where it uses your data to attract advertising companies.
- Total revenue of Meta in 2021 amounts to more than 117,000 million dollars
Meta relies entirely on ad revenue
Related topics: Applications
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