Google! Interesting topic isn't it? Some of my friends asked me, "how does Google make money when it offers free services to the public?" By the way, I assume you know what Google is. Google is providing so many powerful tools that I can't live without on the net. Things like Google search engine, Google Chrome, Google Translate, Google Reader, Google Analytics, Blogger, Youtube, Feedburner, etc are what I normally use everyday.
Back to the topic, how does Google make so much money since most of the services are free?
How does Google make money? What is driving the company's growth?Want some examples, let's head to Google search engine. Simply type in something, says "Internet" in the Google search engine field. If you are too lazy, just click this link and it will lead you there.
Today, the majority of our revenue comes from advertising.
Advertisers are increasingly turning to the Internet to market their products and services. Google AdWords, our auction-based advertising program, enables advertisers to deliver relevant ads targeted to search queries or web content to potential customers across Google sites and through the Google Network, which consists of content owners and websites. Our proprietary technology automatically matches ads to the content of the page on which they appear, and advertisers pay us either when a user clicks on one of its ads or based on the number of times their ads appear on the Google Network.
We distribute our advertisers' AdWords ads for display on the Google Network through our AdSense program. We share most of the revenue generated from ads shown on a site of a Google Network member with that member.
(Source from: http://investor.google.com/faq.html)
Check it out. The left hand side of the search result page consists of free natural listings. Google will send its bots, called "Spiders" or "Crawlers" to crawl through the websites to search for good and natural contents. Then Google will use its algorithm and some processing methods to index the websites on the Google search engine result pages. The right hand side of the search result page consists of paid advertisements. The paid advertising program is called "Google Adwords". Therefore, the main and biggest income source of Google is from the Adwords advertising campaign. That's how Google can afford to provide so many free services and tools and yet earn big bucks. What Google needs is traffic.
In fact, you can find advertisements almost everywhere on the Google free service site. Go to your favourite Gmail and Youtube. You will find plenty of the advertisements.
Sometimes, you may find Google advertisements on some websites or blogs, including my old blog. It is actually a program called "Google Adsense" which allows webmasters or bloggers to publish the Google advertisements on their websites or blogs. In return, the publishers will get a certain amount of commission from Google. So Google acts like a middleman to find advertisers for your website and it is a win-win situation. I will write another post on Google Adsense in the near future. So stay tune!
Disclaimer: Google Adwords and Adsense are trademarks of Google. To know more about Google Adwords and Adsense, kindly visit http://www.google.com.my/intl/en/ads/for further details.
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