50 Comments

Summary:

Ask your friends what business Google is in and the answer you’ll most likely get is “search.” And they would be wrong. Google is, first and foremost, an advertising company. A full 97 percent of its revenue comes from advertising on its various properties, including YouTube, […]

googleadrev

Ask your friends what business Google is in and the answer you’ll most likely get is “search.” And they would be wrong. Google is, first and foremost, an advertising company. A full 97 percent of its revenue comes from advertising on its various properties, including YouTube, plus partner sites through its AdSense product. Sure, Google has Android and Chrome OS and everything else, but it doesn’t make money from them — they’re just there to get people to watch more ads.

  1. Very easy chart for the accounting folk to plot :-)

    Share
    1. Yes, Taj Mahal is a white building and Google makes money from ads. I would expect GigaOM to go beyond the obvious – in this case, to give a breakdown of the 97% – what properties of Google contribute to this 97%? How much does google.com bring in vs google sites per country? How much does youtube bring in, and how much does Ad Sense? What about other google sites (scholar, docs, picassa…)?

      Share
  2. Similar question: What business is television in? If you answered, “entertainment” you’re wrong.

    Share
  3. satish sharma Friday, July 17, 2009

    This is truly an absurd conclusion. Such conclusions have no no place in this blog — maybe on a tabloid.

    It’s akin to saying banks don’t make money by charging interest but only by issuing bonds or credit cards.

    Most of the advertising is on the keywords; “search” is the method by which it is monetized.
    If you ever search anything in google — you an see the paid advertisements on top and right hand panel. Pray tell why would I see this unless I searched for something in the first place.

    There is another method of keyword advertising that’s placing related keyword ad’s on websites. That too is only money maker for search reasons — otherwise why would you, as a website owner, accept “rival” ads.

    Share
    1. indeed. the author barely knows his elbow from his ass…

      Share
  4. Same could be said of GigaOM. Right? So is Google GigaOM and visa versa? or is GigaOm an extension of Google. The interperative arm of Google?

    Hey I don’t see you name on the Editorial Masthead…what’s up with that?

    Share
    1. Ah, but GigaOm (and TechCrunch, and VentureBeat) also make money from conferences and subscription services and the like.

      Magazines make money from ads, but also from subscribers and single-copy sales. Same with newspapers.

      Google makes almost all it’s money from ads — not from Gmail, Android or the Chrome OS.

      Share
    2. As for the masthead, you’d have to ask Om about that. :-)

      Share
  5. and that 97% which is advertising is derived from search terms. So what on earth are you talking about?

    Share
    1. Now that’s a valid point. I agree with Martin..

      Share
  6. [...] faldende CPC priser. Træerne vokser altså heller ikke her ind i himlen. Og for det andet kommer 97% af indtægterne stadig fra annoncer – annoncer som ikke ret mange af brugerne vel reelt set har bedt om endsige synes [...]

    Share
  7. Anthony Wang Friday, July 17, 2009

    it might not be 100% clear, but I think the point is that Google is an advertising company, not a software company – people think of the search engine as the product, but our searches and clicks really are

    http://anthonywang.com/2009/07/16/you-are-googles-product/

    Share
  8. [...] Where Does Google Get 97% of Its Revenue? – Gigaom.comAsk your friends what business Google is in and the answer you’ll most likely get is “search.” And they would be wrong. Google is, first and foremost, an advertising company. A full 97 percent of its revenue comes from advertising on its [...]

    Share
  9. Friend: ” Most of Google’s revenue comes from search.”
    Reader: “No, your wrong, revenues come from “Search Advertising.” (say advertising slowly)
    Friend: “Oh, you’re really smart. That changes everything.”

    Share
  10. -1

    Only for the most naive definition of business. The NY Times is in not in the journalism business because it derives the majority of revenues from ads? That’s just ridiculous. The Times is in the journalism business and Google is the research business. The only reason I buy the Times (and thereby read the ads) is because of the great reporting. Same with teh google.

    This is an attention getting story not worthy of gigaom.

    Share

Comments have been disabled for this post