(15) How Google.com makes money?

Post 15:

Recently a friend of mine asked “how does google.co.uk make money?” For someone who doesn’t study ICT, or have much interest in all the ‘goings on’ of technology, this is actually a really good question. After all, searching http://www.google.com don’t manufacture tangible products.

So if Google don’t make products, then what do they do? They provide services, i.e., www.google.com | Refined searches etc – these services are what makes Google money. Perhaps you haven’t noticed this yet, but next time you do a serach using Google, you’ll notice they offer Sponsored Links. These appear on Google’s search results page because companies give Google money for Marketing (a functional area of a business). If people don’t see a businesses name, or what they do (or offer) how will they generate money?

Google click: this works by buyers/businesses buying certain words, or clicks, related to their business. The more clicks (or hits) they get the more money Google makes. For example, a local (factitious) gym might consider bidding for the following key words; (1) Gym, (2) Cheap, (3) Membership, and (4) exercise. The price for the gym (in this example) will depend upon what other businesses are bidding for those same keywords. In essence, the more competition between businesses for keywords, the more one business will pay for one Click to their website.

The gap widens for more ‘obvious’ keywords. I.e, you’ll find less and less small businesses offering bids for saturated markets. E.g., Health, debt management etc whereas, local smaller markets like a local gym (see example above) might consider funding Google for single clicks!

Post 15, over and out.

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