One of the most well-decorated platforms that do not require an introduction—Google, is the digital world pioneer.
As of January 2021, it had over 269 million unique visitors—topping the charts of the multi-platform web holdings in the US. These included several sites like Gmail, Google Search, Google Play, and more.
Google LLC is a Californian company, established in 1998 by Larry Page and Sergey Brin. A subsidiary of Alphabet Inc., Google was initially just a search engine, which gradually expanded into over 50 services and products.
Its offerings include email, real-time map, and online documentation to multiple apps, browsers, and other software for smart devices.
Every individual knows about the primary services offered by this tech giant, but very few would know about how does Google operate? Walk through this piece, and you will discover all about how it rolls and achieves new pinnacles every day.
How Was Google Launched – A Brief History
The birth of this tech groundbreaker has to be one of the most intriguing stories, doesn’t it? Well, it was a simple Ph.D. project at Stanford University initiated by two students. The venture went through multiple modifications and climbed one step after the other to reach where it stands today—at the apex.
Larry and Sergey developed a search engine with the help of other authors and coders, naming it Backrub. The prime aim of this system was to identify backlinks and estimate a website’s significance. It later progressed to page rank, score, and other steps through various algorithms.
The website got its name by a misspelling of the term ‘googol,’ which means ‘1’ followed by a hundred zeroes. The term was chosen to reflect the objective of the search engine to provide vast amounts of information.
The company received funding from a few investors and venture capitals through 1998-1999, after which it started to expand exponentially. And the present outcome is not hidden from anyone!
What is hidden, however, is the business model of Google. How did it go on to climb the ladder of success at such a rapid pace? Stay hooked, and you will find out!
What Does Google Do?
Google is used synonymous with searching the internet, which is indeed its prime business, but that is not all. Besides integrating billions of web pages for running the search engine, the American tech leader offers a host of customer and enterprise services.
A quick view over Google’s products and services on offer:
- Google search engine: Let’s you hunt and explore way more than textual information. It includes maps, images, news, videos, books, and more. You can also compare prices for shopping and flights.
- Enterprise Services: Google has introduced an entire workspace to conduct organizational activities online. Google Docs, Sheets, Mail, Slides, and more allow individuals to collaborate in real-time and work flawlessly. It also offers Google Analytics and Google for Entrepreneurs for analysis and cloud services, respectively.
- Advertising: The first few suggestions of your search are actually ads by google. In fact, the company earns maximum from this part of its business. These include Google Ads, AdSense, DoubleClick AdExchange, and more. (more about it in a bit).
- Consumer Services: One of the widest sections of offerings is the consumer service segment, including web-based software and hardware services.
From the workspace pack of slides, docs, and sheets to maps, drive, mail, and calendar, it is a well-rounded bundle. The software section includes Google Chrome and apps, while hardware ranges from Pixel smartphones, assistant speakers, headsets, and even Wi-Fi.
- Other products and services: The list of Google’s provisions to ease your life is endless. Still, other prominent products and services include broadband, Google Wallet, and public Wi-Fi, among others.
Google Business Model – Hidden Revenue Generation
Google follows a hidden revenue generation pattern, one where the user itself does not have to pay for the service. That is because this income is created from third parties like businesses. For example, the different companies pay for their ads to appear on the search engine result pages.
In 2020, Google’s advertising revenue amounted to over 80% of its annual revenue of $181.69 billion. So how did it happen? With the perfect blend of AdWords and AdSense. Here is a quick breakdown.
In 1999, the founder of GoTo.com—Bill Gross, met with Page and Brin to pitch in the idea of CPC. Until then, the usual advertising course followed the (cost per mile) CPM model, wherein advertisers earned based on the ad impressions.
On the contrary, CPC meant advertisers earning only if the user clicked their links because they were valuable enough. However, the Google founders were hesitant to follow this approach and refused to merge with Gross.
Fast forward twenty years, and today Google uses CPC as its prime advertising technique, making over 80% of the total revenue.
Paul Bouchet, a Google employee, came up with the feature of matching Gmail words with the ones bid by advertisers. Brin decided to use it for the better, applying this method to the websites, giving birth to AdSense.
That is how small businesses could earn revenue independently, with Google still getting a third of it. Thus, the tech bull became the middleman and let third parties advertise while consumers get what they search for.
Though AdWords and AdSense are the key players behind the significant advertising revenue of Google, there are multiple other ways. The prime ones include Cloud, YouTube Ads, Other bets, and a host of acquisitions like DoubleClick, Motorola Mobility, and Fitbit, among others.
Another technique that Google follows is constant innovation. For example, Google is directing its Wi-Fi app to the home app, allowing users to manage their work in one place.
So, what is Google? Is it just a tech company that used a unique business model to reach where it is today? Well, it is a lot more.
Google is downright the most visited website in the world, with total monthly visitors of a whopping 92.5 billion!
That is because the company strategized a way to cater to all of its stakeholders simultaneously. Additionally, it invested in other areas to keep the revenue increasing and creating prospects for future growth. That is both monetarily and in terms of consumer satisfaction!