I use Google to do Internet searches. I use Google Maps to find a location. I also use Google Docs, Froogle Google etc. But I have never given them a penny. I was wondering, how Google makes money? 
Ad revenue. They pioneered or at least perfected using targeted ads during searches. You type in “new car” and there will be links. Those links are paid for by the companies to show up on the front page. They are the ones labeled sponsored links.
Personally I’ve always wondered how the sponsors make money. I have never clicked on a google ad links and only ever purchased things from websites I trust. I have also never observed anyone else click on the ad links etc.
But I suppose there must be a sizeable amount of people who do make these people money for it to continue as it is. I don’t suppose figures on how much money they’ve made from advertising on google would be easy to collect. I guess it does help brand awareness a lot.
Another way they make money is by selling high-powered versions of the stuff we use for free.
For example, We use Google Maps for free. That’s good for us, because it is great and helpful and free. And it is good for Google, because our usage of it helps them to find and fix the bugs. Then, once brand recognition and popularity and quality are proven, they can make specialized versions of it, which they sell for a profit, to companies for use on their “Where are we located” web pages. Branch locations for a bank, store locations for a franchise, that sort of thing.
FWIW, according to Google Finance, in the three months ending Sept 30-2008, Google had revenue of about 5.5 billion and net income of about 1.3 billion.
Google has plenty of paid services. If, say, you want a search on your internal corporate web pages, you pay for it. Or to search proprietary data on your system. There also may be a fee to add Google to your public web page (for some people – it’s free for colleges, for instance). Corporations are willing to pay the fee because Google is trusted to do a good search and having it on the page makes it easier for customers to search (you could do it with the “search this website” feature, but that’s a complication the company may want to avoid).
My company does work for the U.S. Dept. of Education and we implemented an intranet that incorporates searching using a Google appliance–a piece of hardware that provides Google searches. It crawls the site in background building its index. I think they use it for all their sites. And it ain’t free.
Either 85% or 95% of Google revenue is via ad revenue (can’t remember which; no cite, just what I hear from a worker).
However, I can tell you firsthand that Google has no serious competitors right now. If you want to put ads on your website, you want to put ads that have a high CTR (click through ratio). They have built a huge client base, mastered amazing algorithms that match ads to the page, and have become unparalleled when it comes to CTR.
I have an S&P report on Google (sorry, it’s not linkable), that says “Advertising accounted for 97% of revenues in the third quarter of 2008”.
Nice Wikipedia article on Google AdWords:
Also, the List of Google products is mind-boggling.
Yet another example would be CNN - I am betting they paid for the professional version of Google Earth they display to hype up news stories …
I have clicked on Google’s links. Not so much now that half of them are taken up by eBay and generic shopping comparison sites with no actual content. But there was a time that you could do a product search on Google, and some of your best results would be in the sponsored links.
Oddly enough, the one place I find myself clicking ad links quite a lot is Facebook. Not sure if that’s because they’re so well geo-targetted or what, but I click more ads on Facebook than anywhere else on the net. Yet all the sites with huge, invasive advertising, I just tune it out.
Not Google, but similar: Back in the day when AltaVista was the dominant search engine, I once ran a search for a particular piece of software we had in the office, and which I wanted my own copy of. The AltaVista search itself didn’t come up with any hits, but the ad at the top of the page took me directly there.
thread is funny because there are google ads on this very page… lol
there are some right above the box where I am typing now. I guess they have mastered inobtrusiveness so much, that people don’t even “see” these ads anymore.
it was a google ad for broadvoice that led to my first VOIP phone service purchase
The Google Maps API is currently free for use on any webpage that is publicly accessible, so the banks and stores using it for their store locators aren’t paying Google for it. The only time you have to pay to use the Google maps API is in a private/paid/intranet type of site.
OP: You certainly have given them money. Every time you perform a Google search you take a dime out of an advertisers pocket and hand it to Google.
I remember when there was no google ads on this message board after the first post. Also was around before memberships became paid. oh the great times