How Google Makes Money?

By: Muhammad Abbas Shaikh 

Google is the most common name in the world of web and one of the top notch companies of the world. Everyone knows that it is the best search engine and along with its search engine website it also has many other sites like Orkut, Gmail, Google Plus, and many others. Even the Android the most emerging operating system among the Smartphone also belongs to Google. But have you ever tried to find how Google earns? How Google is able to rule over the world of internet and how it manages it millions of expenses in running numerous servers all over the world.

Many people still don’t know or not bothered to know about the source ofGoogle’s income. It’s a multinational company so it must be earning a lot but the question arises from where they earns? Does it manufactures any products or develop software to make money? The answer is big no.

Google Earns from Advertisements

The main source of income of Google is from the advertisements which run on almost every Google’s site. Whenever you search for anything on the Google you must have seen a block in yellow color consisting of links at the top of the search results. These are not the search results but rather are the advertisements which run on Google search engine. Not only at the top but also at the sidebar there are advertisements which keep displaying on the right side of the webpage.

How the Advertisements Make Google Earn?

You must be wondering how these ads make Google earn? The simple concept behind this is whenever a user clicks on the ad links Google earns. Each time a click on any of the ads makes Google to earn money. How much it earns depend on the advertisers. The ads shown on search results are based on bidding system. As higher amount advertiser bids its ads shown on the top.

There is a minimum bid value for the advertisement for particular keyword (Search type) and advertiser’s bids for higher price and the one who bids the maximum price gets the top rank on the ads list. The amount is given by the advertiser to Google depends on number of clicks and cost per click made on for that advertisement. The price per click may vary from $0.01 to even $5 which depends solely on the ad keyword and bidders.

The priorities of listing of the ads also depend upon the number of clicks made on the ad. More the clicks higher the priority.

To advertise on Google there is a program created by Google called Google AdWords. Anyone can create account on AdWords and setup its payment method and can start advertising on Google. This post is not about Google AdWords so we are not covering much on it right now.

Google earns the maximum revenue from advertisements on its site Google.com while it also earns from its other sites like Gmail, Orkut, YouTube etc on the basis of ads clicks.

Beside from ads on Google’s own sites there is another way Google shows advertiser’s ad on other websites this is revenue sharing concept named as Google Adsense.

Many a times an advertiser wants to advertise on other sites also besides Google. Google have given option to website owners as AdSense where website owner shows Google ads on their website. So when the publisher of a website sets the ad on his page and the viewer clicks on the ad Google shares the revenue with the publisher. Google do not disclose percentage of revenue sharing with publishers. Publisher may get sharing between 30% to 60% which is not disclosed to publishers. Advertisers give revenue to Google and Google in turn gives revenue to the publishers.