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How does Google make money?

Google may be the number one search engine on the web, but without a physical product to sell, how does it make its money?

Number one search engine

Popularity Google has quickly become the most widely used search engine on the World Wide Web. Some estimates suggest that it receives over 300 billion hits every day. However, Google has become so much more than a mere search engine since it has released free software packages such as Picassa; a photo and file sharing tool and sketch up: a 3D drawing package. But how does the Google corporation make its money?

Advertising

Commercial campaigns Where Google makes the majority of its revenue is in advertising. Google does not really have a physical product to sell, the product exists only in web space, which really is the beauty of the business. Google is essentially paid to send web traffic to a particular website and advertisers will pay big money for this service. Whenever you do a Google search, how high up on the search results a particular web site appears, depends on certain keywords and companies will bid to use those keywords. For instance, should a musician wish to ensure their website appears first in Google search, words such as “music,” “musician” or “guitar” are likely keywords and would be in high demand, so thus would have a higher price tag.

AdSense

Google uses something called Google AdSense, where website owners enroll on the AdSense site and users can then publish video or text based adverts on their websites and Google will charge advertisers based on a pay per click basis. A portion of the money goes to the website owner and the web host and the rest goes to Google – the more clicks an advert receives the more money is generated. This not only allows users to earn money from a website, but it generates enormous profits for Google.

Google markets

Marketing trends Google are experts at exploiting new and emerging markets. For instance with the emergence of smart phones, Google has put a lot of effort into the mobile phone market. It is eager to grasp a market share and even releases its own mobile operating system Google Android. With the majority of homes now having internet access and the growing popularity of mobile internet, we can fully expect Google to go from strength to strength.

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