How Google makes its money ?

Everyone uses google now a days to know about the latest happenings , news , searching keywords e.t.c but according to my experience around the world, very few people know that how google became a billion dollar company ? Here is a post on the research I did & the points I came up with.

How Google makes money

How Google Makes its money ? – Point Wise description

  • About 90% of Google’s US$67+ billion in revenue comes from advertising. Google makes the majority of its money from ads shown as part of search results along with the organic search results.
  • Google has two advertising platforms — Google AdWords and Google AdSense.
  • Google’s search ads convert better than the ads on a web page of a publisher.
  • For example, if a user types in a query like “Life Insurance”, Google knows that this is a person who wants to get life insurance and there will be some insurance companies advertising on google & prepared to pay a lot of money to have Google suggest that they buy an insurance from that company.
  • The traditional media is not able to leave an impact on today’s generation. Hence, this smartphone generation prefers google, which is considered as a great medium to media houses as it is a search engine which makes it a great potential for advertisers to invest.
  • The semi organic growth policy of google makes it a thriving one in the industry & unique in natur
  • All the services of Google are almost free which makes it worthy to be used frequently & increases the potential of advertising business for investors.
  • Google has a very popular auction based advertising program called — Google AdWords. With Google AdWords, you can advertise your business on Google’s search result pages. That’s where most of the revenue comes from.
  • If you have noticed Google’s search results when you perform any of your web searches then you can see “Ads” across search result pages. These ads are obviously sponsored by advertisers on Google AdWords who pays Google every time you click any of those ads.
  • Google also has a publisher program called Google AdSense and it allows over a million publishers like me to make money by displaying relevant ads on our websites or blogs. When it comes to website monetization, Google AdSense is the best contextual ad network present on the internet.
  • The greatest thing I believe for this ad network is that it provides the viewers with ads of the category they want to see & what they have searched about. This makes its business model the best one. Also the advertiser only has to pay for the clicks made by interested visitors.
  • Google uses a bidding system to decide the pay per click on its ads. You as advertiser, select the keywords for which you want to show ads on, so that when someone searches for those keywords on Google, your ads will be shown.
  • Let’s say you own an e-wallet company and want to find customers. What you do is bid on keywords related to “deals” like “recharge tricks”, “deals & coupons” etc. So, whenever a user searches for “recharge tricks” or “deals & coupons” on Google your ads will be shown.
  • The price you need to pay Google depends on the competition for that particular keyword. Now, if there are several other advertisers bidding for the same keyword then most probably you will have to outbid them to show your ad on top.
  • The Cost Per Click (CPC) varies from $0.01 to $100+. For example, advertisers are willing to pay as high as $54 per click for insurance, mortgages, and loans related keywords.
  • Mobile Apps, mobile content, mobile search results have come into existence to provide Google with another source of earning, however here also the ADS come up to be an important part of money making mechanism of Google.
  • Google Mobile Ads on various Apps are powered by Google AdMob, however most of the mobile search results are powered by adwords only.
  • Most of the Apps owned by Google generate most of its revenue either are of Android or any other operating system.
  • Google also owns Youtube & makes money by selling video ads on youtube channel to interested advertisers. These ads are again showed on potential channels that have a good subscription database.
  • Developers are charged to upload their Apps to the digital distribution platform Google Play for hosting & marketing their Apps.
  • Google is now in the market of devices like smartphones , tablets e.t.c after they acquired Motorola & Android.

Here is a bit old but well explanatory video of how does google make its money ? Watch it & it will be simpler to understand every aspect you need to know.

Do you want to add something to this article ? What are your views on this article ? Share though comments please.

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