There was a time when getting around was a lot more complicated.
It required planning, difficult to fold maps, arguing with spouses and
often needing to stop and ask for directions.
But 15 years ago, that changed.
Today, digital map apps like Google, Apple and Waze can navigate around
traffic, remind you where you parked and even notify you about natural
disasters. It's hard to imagine a time before we had these apps.
Head west, then turn left.
And Google Maps dominating.
It has become essential in the daily lives of its over one billion monthly
users. It's mapped more than 220 countries and territories and is updated
tens of thousands of times a day.
When Maps first debuted, Google said it was designed to simplify how to
get from point A to point B.
After a decade of investing, collecting data and billions of images, it
not only dominates the navigational app market, but it's one of the most
popular smartphone apps of the last 10 years.
There are billions of people around the world who are using the
navigation apps on on a daily basis.
And Google Maps, we think, is the leading player in that space.
Google Maps can provide directions if you're traveling by car, mass
transit, walking or biking, you can even virtually hike to the bottom of
the Grand Canyon t hanks to Street View Tracker.
Alphabet does not separately report the revenue from Maps, but Morgan
Stanley estimates that Google Maps revenue both from desktop, local search
and mobile will total more than 11 billion dollars in 2023.
And so if we think that over the next few years, the Google map could grow
into two, three or four billion dollars of revenue and a pure multiple
basis, it's not crazy to think that the map could be worth 10 or 20 or 30
billion dollars of revenue through that lens alone.
Here's a look at how Google Maps became a huge business and transformed how
we get around.
When Google Maps first launched in 2005, it had far from a billion users
and looked drastically different from what it is today.
In fact, its first map didn't include much of the world.
When you look at Google, a core foundational goal from
its birth is to be the information center.
Then it makes sense that they want to own a vast amount of data that they
can, including maps, Google Earth.
They start by trying to solve consumer pain points.
And maps and navigation is a consumer pain point.
Google Maps started as a result of acquisitions that Google made.
The first one that was the most key was in 2004.
It was called Where2 technologies.
It was a converted from a Web application and it became really critical to
how the company would eventually make its core Google
Maps product from.
It also acquired Keyhole, another mapping company that used satellite and
aerial images to create 3D maps whose technology would later become Google
Earth. And ZipDash, a company that was using GPS to provide real time
traffic information. Everybody was using MapQuest, so people are still
printing directions out or even just getting in their car and using a
paper map. And so Google Maps was just a totally different way to see how
to get somewhere with pretty much A to B line with turn by turn
directions. Its early competitors on the Web were Yahoo!
Maps and MapQuest, which was owned by AOL then and was the category leader
at the time. In 2007, Street View was born and the company embarked on
a journey to map the entire world.
Initially, cars mounted with cameras drove around the streets of five U.S.
cities. Over the next few years, and with the help of trekkers, the Street
View team collected more than 170 billion images from 87 countries.
Users can now see a 360 degree view at street level.
And with the help of computer vision, the cameras identified street signs,
speed limits and many other pieces of information that you could not get
from satellite imagery.
This gave the company endless amounts of data that it now owned and helped
it create very detailed and more accurate maps.
I think Google Maps Street View sort of showed people this way to sort of
explore the world.
You could drop in and see exactly where you're going.
That same year, Google Maps made its mobile debut on BlackBerry and Palm
devices, allowing users to utilize maps anywhere they had their phone,
especially in cars.
Google was now competing with GPS navigational systems like TomTom and
Garmin. I want to show you something truly remarkable, which is Google
Maps on iPhone.
In 2007, Apple launched the iPhone.
So suddenly Google Maps was on everybody's phones everywhere.
And that was a big difference from the maps you had on other phones
because it was a multi touch for pinch to zoom in and stuff like that.
And it really just made Google Maps spread rapidly.
Google Maps came preloaded on the iPhone in 2007 until Apple released its
own map application in 2012 in ios6.
We have built an entire new mapping solution from the ground up.
The relationship between the two companies reportedly chilled after Google
added features similar to the iPhone into Android.
There was also an issue of data.
Apple executives were bothered by the fact that Google could see the data
of iPhone users.
However, the debut of Apple Maps did not go as many expected.
It to me and a lot of other people feels like a half baked product.
The data isn't great and it's not the the quality and the
experience you would expect from an Apple product.
The Internet kind of went nuts, like what is going on.
All these places in the maps look like they were melting into the world
like a Salvador Dali kind of painting.
It was a mess.
How big a fiasco is Apple Maps I was just talking about?
It's bad enough for CEO Tim Cook to make an apology in a letter posted on
Apple's website today.
Cook said, quote, We strive to make world class products and deliver the
best experience possible to our customers with the launch of our new maps.
We fell short on this commitment.
It's very rare for Apple CEO Tim Cook to issue an apology for something
like that. Cook advised users to use alternatives like Waze and even the
Google Web site. Google had an Android app but now needed to create an iOS
version for iPhone users.
It debuted in the App Store three months later.
As smartphones became more popular and users turned to mapping applications
to get around, mobile ads started to gain momentum in 2012, mobile ads
associated with maps or locations were estimated to be 25 percent of the
roughly 2.5 billion spent on mobile ads.
And Google Maps was already taking off.
By 2012, Google Street View had mapped 39 countries, three thousand cities
and five million unique miles by combining its own data, license and user
generated data. It was now available in 187 countries and had 26
million miles of driving directions.
That project, while grand in scope and has taken a lot of our time.
Let us to think of something even bigger, which was to build our own maps.
And so we started embarking on creating our own map data, using government
data, any data that we could license in and bring in to make part of our
own maps. But basing it on Street View.
And while Apple struggled with its own map application, Google set its
sights on its next competitor, Waze.
So one of the main differences between Apple and Google or Waze is that
Apple does not own its own data.
It has partnered with different partners around the world to actually
build its map. And so its rate of change is dependent on its partners and
their ability to update their maps.
Waze owns our own map.
We don't use a map from a third party, so we allow users to update the
data themselves. Waze was like a social network of driving and
mapping. So if you hit a traffic jam and had a bunch of Waze users, that
information was real time data.
But also everybody was able to report things like car accidents or a
police officer with a speed trap.
And it had this gamification thing where you would get points for sharing
information and accurate information or correcting information.
And so lots of people, especially commuters, turn to Waze and that kind of
became a competitor, Google Maps and then eventually takeover target.
So we believe if you look five years out there, going to be two maps of the
world. There's going to be Google and there's going to be ways there will
be other maps. But in terms of the ability to update and the speed of
these maps reflect, the real world we think is going to be the two of us.
Apple and Facebook were rumored to be interested in the company, but Google
ended up buying it for more than one billion dollars in 2013.
And then what Google did is it left ways to operate the way it does still,
but it took some of that data and brought it into Google Maps.
So now you can see some of the traffic data, more accurate things, whether
there's a road closure and that from Waze.
The information is actually pulled into Google Maps for people who aren't
even using Waze. Waze has been important to Google because it's gotten
them access to a different set of consumers who perhaps were not using the
Google map as frequently.
It's giving them a canvas to experiment with new types of ad units that
maybe show up on Waze before they show up on the Google map.
Google doesn't disclose how much it invests in maps.
We do know that data provided by Google Maps users is incredibly valuable
to a company whose main source of revenue is advertising.
Google Maps has been ad free for years, but in 2019, Alphabet executives
said that wouldn't be the case any longer.
Google map is still the most under monetized asset that I cover.
This is a utility where Google has not yet turned on the monetization
switch. You think about the idea of better integrating paid search
offerings into the Google map.
You think about the idea of promoted pins within the map.
Companies like Starbucks or companies like Dunkin Donuts would be very
interested to show a promoted pin for where their local stores are in that
city. To people like myself who are interested in coffee, we don't think
it's unrealistic to think that this could be a one, two, three, four or
five billion dollar annual revenue opportunity for Alphabet.
But as the product has gotten more advanced and the money coming in has
grown, so has the scrutiny.
The Internet giant has come under fire over privacy concerns after users
could see their house, license plate and face captured on Google Maps by
Street View cameras driving by.
The company eventually began blurring out faces.
In 2013, it agreed to pay seven million dollars to settle a lawsuit after
it collected data from users like email, passwords and financial
information from unencrypted Wi-Fi networks as Street View, cars drove by.
Google admitted the mistake and said a rogue engineer was to blame.
MapQuest and Microsoft's Bing Maps rolled out similar features to Street
View and were confronted with similar privacy concerns.
Working my way through the 64 page lawsuit that the Justice Department has
filed against Google and in which the department alleges that Google's
anti-competitive behavior has been going on for years.
It's still going on.
And in fact, it might be getting worse, such as Google's core business and
maps as a part of search.
And there have been, you know, some subtle mentions here and there of maps
specifically, and the company holding dominance with it.
There were competitors early on, but now Google owns the most advanced
mapping systems.
Over the past few years, Google has added features like Incognito Mode to
prevent searches from being saved, an auto delete controls for location,
history and web and app activity to give users more control over their
data. Any of the regulatory investigations around Alphabet
essentially does bring to the forefront the importance that they are
protecting people's data, only using people's data in an appropriate way,
and that consumers are very aware of how their data is being
used. And so when we think about that from a map perspective, it puts an
even higher importance on Google's efforts to ensure that people opt
in. And ultimately it does come down to responsible management from a data
perspective and just continuing to improve awareness of the
data that Google is capturing through their map and how they're
incorporating that into their overall advertising products.
Google also faces growing competition from a competitive standpoint there.
There's still other map players.
There still is Apple Map and now you have Snap Map, which is being built
for Snapchat and its users.
And so I think from a consumer perspective, you are going to have more and
more of these products that you can open to try to connect with small,
medium sized businesses and try to navigate your way to them.
And just the question is going to be, one, how does the accuracy of the
data stack up compared to Google Maps?
How are the directions from a time perspective stacking up?
And ultimately, how does the user experience evolve over time?
Last year, Apple invested billions of dollars on its map.
The company announced Look Around a feature to compete with Google Street
View. It also is trying to compete on privacy.
In a statement earlier this year, it said it set out to create the best
and most private maps app on the planet and rebuilt the map from the
ground up. An analysis of mapping apps from 2018 shows the dominance
Google Maps and Alphabets' owned Waze have over Apple and other
competitors.
Google Maps has become much more than just a tool that gets you from point
A to point B. It has used cars, people and even camels to collect more
than 170 billion images from 87 countries to keep its map up to
date as the world constantly evolves.
I think the biggest change we're going to see in Google Maps in the coming
years is the addition of augmented reality.
And if people move away from smartphones to smart glasses, it needs to be
this see through augmented reality, sort of here's how you get to that
place. And that's what I think the future of Google Maps will be today.
Over five million sites and apps use Google Maps.
It's also a supplier of mapping technology to companies like Uber and Lyft.
Having so much data of existing roads, streets, traffic
flow. It helps fuel Google's A.I., which is helping the company's
self-driving car company WAMMO.
I look at it as the company trying to dominate the self-driving car
industry and that mapping is part of that.
Among the many things you can now use Google Maps for includes booking
reservations and exploring neighborhoods.
At a high level l ocalized navigation data is going to become
more and more valuable to all online advertising, all online companies.
During the pandemic, it's added over 200 new features, which include a
Covid layer that shows you how many cases are in your area and trend times
for shops and mass transit to help people avoid crowds.
When you have hundreds and thousands of people driving around, walking
around continuously updating the map and ensuring that everything in there
that people see is accurate as possible is a real competitive moat.
And there's no real sign of a let up from an investment perspective out of
Google to ensure that the map stays cutting edge and ahead of the
competitors.