how does google make money v2

How Does Make Money ?

Prateek Gera

Advertising is the key source of revenue for Google today

Source: Google 10-K Filing , Feb 2010

Advertising on Gaurav’s YouTube channel earns revenue for him and Google.

Google search enables two advertising revenue streams

Advertising on Google’s websites, e.g. google.com gmail.com orkut.com

Advertising on pages of Web Publishers, e.g. travelblog.org techcrunch.com

Ad Words and Ad Sense are the primary engines for the Advertising revenue

Advertisers/ Business Owners

Web/ Content Publishers

Ad Words Ad Sense

Advertisers use “Ad Words” to bid on keywords

Content publishers use “Ad Sense” to become Google network members and earn revenue

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Advantage to users Free services (search, information, email, maps, etc.) Useful, relevant , non-invasive advertisements. Great online experience.

There are two key trends that hold the potential of becoming big revenue drivers in the near future

Convergence of Cell Phone & PC

> 100,000 Android Phones activated every day

Pervasive Internet

> by 2011 5x> non –PC devices *IDC

Google TV

Source: JPMorgan: AdStats Oct

TV advertising is $150bn

TAM

Competition in core search driven advertising is growing but these will generate $2.38bn in 2010*

• YouTube• Double Click• Mobile Internet Advertising• Google Apps• Mobile Hardware

* Source Caris & Company Estimates