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.
[...] 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 [...]
[...] 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 [...]
[...] doesn’t make money from them — they’re just there to get people to watch more ads.Where Does Google Get 97% of Its Revenue? linkscolor = "000000"; highlightscolor = "888888"; backgroundcolor = "FFFFFF"; channel = [...]
[...] A pie chart of how Google makes it’s money, 97% in one slice. (GigaOM) [...]
[...] aus dem Geschäft mit Lizenzen für Suchalgorithmen sind verschwindend gering. Nur etwas mehr als 3 Prozent nämlich: 187 Millionen der 5,52 Milliarden Dollar Umsatz macht Google demnach mit Lizenzierungen [...]
[...] Where Does Google Get 97% of Its Revenue? 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. (tags: google marketing) [...]
[...] Where Does Google Get 97% of Its Revenue? [...]
[...] Where Does Google Get 97% of Its Revenue? [...]
[...] Where Does Google Get 97% of Its Revenue? [...]
[...] of Google’s money (or to be more particular, 97% of it) comes from [...]
[...] An explanation of the campaign from the official Google blog: Over 1.75 million businesses, schools and organizations have gone Google — including Motorola, University of Notre Dame, the Mercy Corps and many more — and each day, 3,000 more organizations join them. We want every organization to understand the benefits of going Google, so today we’re telling the story in a new way. We’re kicking off a series of outdoor billboards in four cities — Boston, Chicago, New York and San Francisco — that will change every weekday for the next four weeks. The billboards tell the story of an anonymous IT manager who gets so fed up with the typical IT status quo that his company eventually — you guessed it — goes Google. [Via GigaOM] [...]
[...] the Most Insightful Post of the Week award goes to Jordan Golson for telling the world that Google makes most of it’s money by selling advertising. The popular GigaOm writer has [...]
[...] they offer their users – like their web search engine, Gmail, Google apps, Google maps, etc. They make 97% of their revenue from their advertising divisions AdWords and AdSense. In 2006, Google acquired YouTube and in 2008, they acquired the [...]
[...] that was before and the battles were not fought for Google’s core business — search and advertising revenue that it produces. It seems that recently though, everyone took turns in taking a swing at Google. [...]
[...] eyeballs bit is, however, maybe the concerning piece of this: Google makes 97% of its revenues from its legacy business using AdSense, AdWords, etc. Nothing much has changed for a couple of [...]
Very easy chart for the accounting folk to plot :-)
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…)?
Similar question: What business is television in? If you answered, “entertainment” you’re wrong.
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.
indeed. the author barely knows his elbow from his ass…
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?
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.
As for the masthead, you’d have to ask Om about that. :-)
and that 97% which is advertising is derived from search terms. So what on earth are you talking about?
Now that’s a valid point. I agree with Martin..
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/
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.”
-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.
I thought that revenue for google through search would be on top..Anyway this is nice interesting fact!
I failed to understand what is the meaning of this post. Is it a news or surprise for author.
This article is bunk.
Just because Google gets 97% of its revenue from advertising, it doesn’t mean Google is an advertising company.
A company isn’t necessarily defined by its monetization strategy.
Google might be a search/software company, but it’s an advertising *business* – a business is an entity that exists to make money, and ads are how Google makes money (well, 97% of it)
the company (people and projects) makes software, but it wouldn’t exist in its current form without the ad business (monetization) – it would still be a grad school project running out of the Stanford CS lab
Wow. Here’s another fact. Did you know that 100% of the person who made this chart is a Giant D Nozzle? I’m always amazed at those who complain about a company that gives things away for free.
VERY informative article! Especially for Gigaom’s tech-savvy readers who had no idea of this SHOCKING fact! The chart made it EXTREMELY EASY for me to understand the complex economical concepts lucidly explained in the article. Will read again. A+++++
Did you know that GigaOM is not a blog? Sure they post a lot of poorly-thought-out blog posts, but they don’t make any money off them. They just post silly pie charts in order to get you to see more banner ads.
Om should fire you for this jackass post of yours..
The big debate, really, is what constitute “the business” that someone is in. If someone makes lemonade and sells it, then it’s pretty safe to say they are in the business of making lemonade. However, if someone makes lemonade, goes to local businesses and offers to place advertising on the cups and this exchange of money helps the person to give lemonade away for free, then what business are they in? The business of making lemonade or the business of providing advertising?
To understand this, you need to break it down into two parts.
1) What benefit is the company providing to consumers?
2) What service is the direct result of the exchange of money?
In the case of a simple lemonade stand, the benefit to the consumers is a nice refreshment… the service which results in the exchange of money is simply providing this lemonade to the consumer. In the second example, the second part has changed… the exchange of money is the direct result of advertising on the lemonade cups.
Given this, Google provides various different services to consumers. In turn, they gets lots and lots of traffic. They then monetize this traffic using ads. So, the benefit they are providing to consumers is the organization of information. The service provided resulting in the exchange of money is advertising.
So, yes… Google IS in the advertising business. However, this only makes sense if you’ve got money in your hands and you’re looking to advertise. If, however, you have information you are looking to organize, then Google is in the business of organizing the world’s information.
Yes, Google is an advertising company and one of it’s source of revenue comes from AdSense products.
I agree with Anand, and I would go a bit further by asserting that one is not in the business of making or offering something; one is in the business of *selling* something.
To Anand’s point, Google would be in the search business only if you as the search “customer” paid Google to access search results. This isn’t to say that search isn’t central to Google’s genetic makeup as a company. Rather, search is one of the strategic core competencies that supports, enables, and drives Google’s advertising business by connecting advertisers with potential customers.
As Charmaine points out, search-based advertising is only one of several channels through which Google monetizes on advertisements (albeit presumably the dominant one). AdSense, for example, has nothing to do with search, and everything to do with driving advertising revenue.