[tossthere]

> b) To attempt to diversify from this single source of income. Except this will never happen, nothing will ever come close to the income ads generate for them. They know this, but they have to look like they’re trying, both internally and externally.

I’ve heard a lot of people repeat this, and I don’t think I understand where it’s coming from.

Advertising is just a revenue model, it’s not something a company necessarily needs to diversify. This seems to me like saying Walmart is in a precarious position because all their revenue comes from sales.

It’s the product offering that needs diversification. Walmart can’t only sell coconuts.

The ad revenue is coming from pretty diversified sources: search, video/tv, maps, email, calendar, web browser, mobile …

[roydivision]

My point is that all their eggs are in one basket, in an industry that is particularly prone to disruption. Additionally, as others have since commented, they are also at risk of regulation. So if they want to protect themselves they need to diversify, find other revenue streams.