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Google Is Out to Dominate This $252 Billion Industry

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Apr. 2 2019, Published 11:00 a.m. ET

Google is launching an education app store

Alphabet’s (GOOGL) Google is launching a marketplace for educational apps and classroom lesson ideas. Google’s education app store, known as the Chromebook App Hub, is scheduled to launch in the coming months.

Google’s creating an app store specifically for the education market is part of its efforts to dominate the education technology industry, which IBIS Capital estimates will be worth $252 billion by 2020. The global education technology market was worth ~$85 billion in 2013.

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Google controls 60% of the classroom laptop market

Google is already the top vendor of a range of education technology products and tools in the United States. In 2018, Google captured a 60% share of laptops and tablet devices purchased for K–12 classrooms across the United States, according to Futuresource Consulting data cited by CNBC. Microsoft (MSFT) captured 22% of the market, and Apple captured 18% of the market.

According to Google, some 30 million educators and students use its Chromebook device.

An opening for business diversification

In addition to the growth opportunity in the space, considering that more than $250 billion will be spent on education technology products and solutions in the next few years, the education sector provides another avenue through which Alphabet can diversify its business.

Right now, advertising contributes the vast majority of Alphabet’s revenue. In the fourth quarter, for instance, Alphabet derived 83% of its revenue from advertising. Advertising contributed 78% of revenue at Baidu (BIDU) and 76% of revenue at Yandex (YNDX) in the quarter. Yelp (YELP) derived 96% of its revenue from advertising in the quarter.

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