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How does Google make money?

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asked Aug 31, 2015 in Business by anonymous
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More than 90% of Google's revenue comes from advertising. Google Adsense and Google Adwords are their main advertising programs right now. When a consumer searches something on Google, you will see ads related to your search query. If you click on one of these advertisement, Google makes money.


References -

1/  http://www.investopedia.com/stock-analysis/2012/what-does-google-actually-make-money-from-goog1121.aspx

2/  http://www.channel4.com/news/if-google-is-free-how-does-it-make-so-much-money


answered Aug 31, 2015 by nilupa1973 (35,290 points)
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According to Investopedia, 96% of the money that Google makes comes from advertising, while most of the remaining 4% comes from licensing its enterprise products and web search technology, as well as its display advertising management services. [1]

 

Most of this revenue comes from Adwords, which is Google's own advertising service that allows customers to display ads on search engine pages and other sites within Google's advertising network. There are two basic types of ads that advertisers can choose through Adwords: Pay-Per-Click ads and CPM ads.

 

Another way that Google makes money is through Adsense. This program allows website publishers of all sizes to display ads from Google's advertisers on their websites. They earn a percentage of the advertising revenue each time someone clicks on one of the ads that is shown on their site. Alternatively, they may also earn a percentage of the CPM fee, depending on which types of ads are shown on their site.

 

According to Google, 70% of its advertising revenue comes from Adwords, while the remainder comes from Adsense. [1]

 

Since only 96% of their money comes from advertising, that still leaves 4% unaccounted for. According to Google's annual report, the majority of its other income comes from licensing its enterprise products, search solutions, and Web search technology as well as from the display advertising management services that the company provides to ad agencies, advertisers and publishers. [2]

 

Although this infographic is slightly outdated, it does a good job of breaking down Google's advertising revenue by industry:

 

 

References:

 

1. http://www.investopedia.com/stock-analysis/2012/what-does-google-actually-make-money-from-goog1121.aspx
2. http://www.netnewscheck.com/article/11205/google-sets-aside-500m-to-settle-doj-probe

answered Aug 31, 2015 by blueskies (57,070 points)

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