dsgrue3 said:
| timmah said:
Yes, but he was talking about revenue, which is not directly related to market share. Volume is directly related to revenue in this case, so it was valid for him to bring volume up when discussing revenue (even if the original article is primarily about market share). Market share is only a comparison to competitors, so cannot be used by itself in an equation to determine revenue.
It's similar to people coming into a discussion about CPU clock rate and saying something like 'clock rate isn't the only factor in determining speed', then going on to talk about cache, hyperthreading, or architecture. He's expanding the discussion beyond just market share so he can discuss revenue effectively.
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Huh? Market share is absolutely directly related to revenue. Market share * total searches = # of searches * CTR*CPC = Revenue.
You missed the argument, so I'll summarize for you:
Me: LOL MS spin about 0.1% market share increase from Google.
Disol: If you knew how much money 400 million extra searches per month can generate (0.1% marketshare), you'd realise how foolish your post is.
^^^ this is an issue as 0.1% market share is not 400 million searches - this is where he deviates from my argument which is why I was so confused about his math. From here he attempts to argue for total volume increase probably because he realized he mispoke but rather than admitting it he went off on a tangent to support his number.
Me/Him: Just some dick-measuring. Not vital to this really lol.
Me: Reiterate 0.1% market share, do math to show revenue.
Disol: Goes back to his volume point randomly in response to my math claims it's wrong.
etc.
I think you understand now.
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@Bold is factually incorrect because there are other variables to consider, most importantly the change in the size of the overall market in this case.
It's actually closer to 350 million more searches vs. the previous sample. A large percentage of the volume increase is just due to keeping up with overall market growth. They'd have to gain a lot of search volume overall just to stay at their current market share percentage since the market grew. Revenue is not directly related to market share unless the market size is completely stagnent (0 growth, 0 loss in the overall size of the market) and prices are completely stagnent, neither of these variables are static, so maket share by itself is not directly related to the overall revenue of the entity. This is business 101.
Presenting a hypothetical - If all search engines saw an eqaul gain of 10% in overall searches while click through rates stay the same, there would be a 0% change in market share (as they all grew at the same rate due to market expansion), but 10% higher volume & revenues for every provider. The pie overall gets bigger, but each piece of the pie stays at the same percentage/ratio of the overall pie, meaning each pie slice grows in size overall, but not in relation to the other slices. It is important to understand that market share is a relational figure only, meaning other variables are necessary to determine revenue, total growth/loss, or size. In this hypothetical instance we would have 10% search volume (overall market) growth, 0% market share growth for each entity, and 10% revenue growth across the board. Market share is clearly not in direct relation to revenue or overall growth due to the other variables. This is why you can see 12% search volume growth with only a 0.1% market share growth, and revenue growth much larger than market share growth.
"As the total market for a product or service grows, a company that is maintaining its market share is growing revenues at the same rate as the total market."
Read more: http://www.investopedia.com/terms/m/marketshare.asp#ixzz2KzPFZhOD
As you can see from above, a company can grow revenue while maintaining market share (0% market share growth while seeing revenue growth). If one number can stay the same, while the other number grows, the two numbers cannot be directly related mathematically speaking.
A relationship between two numbers or other variables where an increase or decrease in one variable causes the same change to occur in the second variable.
Read more: http://www.investorwords.com/6791/direct_relationship.html#ixzz2KzPurpqy
Since it is possible for revenue to grow while market share stays the same, for market share to drop and revenue to go up, for market share to go up and revenue to go down, or for each number to go up or down at different rates (all due to the all-important 'other variables' in business), there is absolutely no case to be made that market share is directly related to revenue.