Tuesday, 20 March 2012

How Google makes money when it offers everything for free.

You might be wondering that all the services that Google provides such as mail, search, youtube, maps, mobile apps, chrome, Google images, calender, Google groups etc (check Google products and services for the entire list) are for free. So how they generate figures like this.
Revenue increase US$ 37.905 billion (2011)
Operating income increase US$ 11.632 billion (2011)
Profit increase US$ 9.737 billion (2011)
Total assets increase US$ 72.574 billion (2011)
Total equity increase US$ 58.145 billion (2011 )

Advertisement is all what fetches Google such huge revenues. In today’s internet world, advertisement has turned out to be the biggest and most successful business. As we see there are many websites which offer free software products and fabulous services and in return when people use that particular website, the brand value of that website keeps on increasing and there are so many businesses who want to promote their products on internet through advertisements. Now these websites who offer free services becomes the platform of advertisement in a way though they provide everything for free, get paid by advertisers a good amount of money. Google is no different. In fact, it is the biggest advertisement platform. Following are few methods that Google use for advertisement and sponsorship.
Adsense: Since Google has a great brand value, people know what Google is therefore people rely on its Adsense program. In fact Google Adsense has turned the way around internet marketing. Every website on internet is more or less associated with it. Advertisers submit there products or services to Google for promotion. And Google spread the advertisements with its Adsense program. Every website which has Adsense account places those Google ads on their websites and Adsense pays these websites some fraction of amount Google earns from that particular advertiser. In a way it creates a win win situation. Advertisers job is done, Google earn a lot and other people who wants to earn can associate themselves with Adsense and can earn a good amount. In a way Internet business is promoting at a lightning speed.
Sponsored links: You might have seen some links on the top, when you perform a Google search. These links are labeled as sponsored links and Google get paid by sponsers for promoting their websites by placing them at the top on the list of Google search of any such relevant topic. These sponsored links can be seen at Gmail, orkut, Image search and many other Google services which makes a large money to Google.
Youtube: It is another platform of Google where you can see large amount of advertisement banners. There also sponsored videos which are promoted by being displayed at top and in a way Google make out of it as well. Recently started, Video ads before videos similar to the one we see at television is emerging out to be another big source.
In this way Advertisement and sponsorship does it all for Google. Now that you know this, you should realise that you are not paying anything to Google for using their super cool services, in fact you are product being used by Google by letting your attention paid to products and services of various advertisers.

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