How Does Google Earn Money

How many options do you need to success in a web application? I would say even with single text box you can be a billionaire.  The classic example is GOOGLE.  One of the most profit earning companies in the world and started with a Text Box and two buttons.  Its amazing to know the way Google earns money.  In fact most of you should have the same question.  

If you go back to 2005 Google just able to made $6 billion with the net income of $1.5.  They were never in the list of most profit earning companies in the world.  

Do you know the current wealth of Google? its $110 billion....how did Google earned that much of money from such a short time?  The simple answer would be effective advertising.

Well, Google makes most of its money through the sale of ads. In fact, of the company's $6.2

Billion in revenue in 2005, over $6 billion is from the ads.

 However there is another fact that we need to consider that is the share price of the Google.  Google went public and by that time their share price was $80-100.  Now it has increased to $350.  Just imagine how much they have earned by just selling its shares. 

Of course share price increased not just because its Google.  Their advertising strategy also accelerates their performance in the market.  Now lets do dome mathematics and see how much of money does Google earn? 

Cost Per Click = 25cents

Google gets 24 billion ad clicks and that means 60million per day just from paid advertisements.   Just imagine how much of money do they earn per day?

Below are some of the ways how Google earns money

1. Charge advertisers for presenting online "banner" ads to users

2. Collect marketing data on consumer habits, then selling the data or using it for targeted advertising.

3. Charging websites to become listed

4. Charging websites for better placement in lists

5. Charging websites to purchase keywords for themselves

6. Charging users for searches

7. Charging other search engines to use their catalog

Up to now we have discussed how Google earns money from its own web surfing.  There is another major cash cow which is the Google AdSense program.

 “AdSense” allows individual webmasters and site owners to place Google ads on their sites and earn a percentage on every click. From these types of ads there are reports that site owners have earned more than $1 million per year on Google ad clicks.

In addition to this Google also has partnerships with other large sites such as AOL which also display Google ads and take a percentage of every click.

But in every case where Google ads appear on other sites, you can pretty much be guaranteed that Google feeds its accounts.  The good side of it is Google always optimizes its services and does invest money on research and development.