Google’s success is built on the aggregation of billions of data points about our search habits which it sells on to advertisers. Google’s parent company, Alphabet, on the 8 April 2016 had a stock market valuation of $522 billion. Approximately 90% of the company’s revenues are derived from advertising showing how the “data exhaust” of something as innocuous as web searching can be monetized when it is collected at scale.
The importance of scale as a value-adding factor for data sets can also be seen with another Google product, Google Maps. At a basic level, Google Maps operates like any other satellite navigation system by linking map data with the GPS coordinates of the user. However, by combining internet connectivity with the movements of the more than 1.5 billion users of its mobile operating system, Android has added a new layer of value. By tracking the movements of Android phones users, Google is able to provide real-time traffic updates to its Map’s users showing where delays are on the roads ahead and offering re-routing advice to optimize journey times
The move into building data services alongside more traditional product ranges is exemplified by the US sportswear company, Under Armour. In 2015, Under Armour bought two fitness tracking app companies, MyFitnessPal and Endomondo for more than $500 million . These acquisitions gave the company access to the health and fitness data of approximately 120 million users across Europe and the US. While the user bases of these apps provide obvious marketing opportunities for a sportswear company it is the aggregation of the data which monitors the health status of millions of amateur athletes along with their dietary habits which may offer the real value.
Et tu, MyFitnessPal?
The full paper can be viewed here