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+1 vote

Calculations = GSuite Revenue/total payment per user per annum

Assumptions and Facts

• GSuite Basic - Pay \$5/month/user
• GSuite Business - Pay \$25/month/user
• For both (Basic and Business) market share is 50:50
Calculations
25 + 5 = 30/2 = \$15/user/month
in a year 15*12 = \$180
divide \$7bn/\$180 = 38,888,888m

### Assumptions

• Revenue comes from subscription as well as ads
• 10% of the users has Ads turned on

### Pricing

GSuite Basic = \$5/month/user

GSuite Enterprise = \$25/month/user

### User base (who take GSuite subscription)

GSuite Basic = 80% (Largest number of users on basic plan)

GSuite Business = 5% (Medium number of businesses yet small compared to Basic Category)

GSuite Enterprise = 5% (Small number of Enterprises has large number of users, hence, almost equal to that of Business Category)

### Revenue

Total Revenue = Subscription Revenue + Ad Revenue

Assume 10% users has ads turned on.

Assume one user views on an average 10 ads a day with 20% CTR with a \$0.20 CPC

One user generates a revenue of 10 x 0.20 x \$0.10 = \$0.4 per day

Yearly ad revenue = \$0.4 x 250 (working days) = \$100

Since, only 10% has ads turned on, for calculation we can say

Yearly ad revenue = 0.10 x \$100 = \$10 /user/year

#Subscription Revenue

Monthly subscription revenue =  0.8 x \$5 + 0.1 x \$10 + 0.1 x \$25 = \$7.5 /user/month

Yearly subscription revenue =  \$7.5 x 12 = \$ 90 /user/year

Annual Revenue per user = \$10 + \$90 = \$100

Total Annual Revenue = #Users x \$100 = \$7B