Google: Question 1-Business model

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Business model

Google’s revenue stream is not as diverse as Apple and Microsoft.
Do you think this is sustainable?
Should they seek other revenue streams?

aiko wrote:It seems that most of the people think Google's current business model is sustainable.
Since google Ad is charge by click, I am really interested in how many people have ever click on the advertisement?

For myself, even I google a lot, and always log on gmail, I never tend to click on the advertise.
I agree with what Dennis had said "people will also be more and more accustomed to the ads presented online".
If this argument stands, do you think google's current business model is still sustainable?

It's more difficult than just a click. They charge by effective click.
Not only a click, they need to concern about how long do clicker stay? Does he really want to view the page or just wrong click?
But this is only a part for their Ad revenue. They also charge for ranking, company who want to be found first will pay the money to buy the position, this is also an easy way to get money from Google.(I'm not quite sure is it still have this business right now)

1) I am using the adblocker add-on of Firefox, so I hardly get any banners or advertisement. But nevertheless, if I see an add that looks interesting I click on it. But I think I haven't bought a lot because of online adds...

2) I also think that User Generated Content becomes more important. When I book a hotel I always check the opinion of people that have already been to that place. But sometimes people just measure with a different scale or even the ranking is manipulated by bad comments from competitors. So I think although UGC becomes a very important information source, offical sources will still be important.

3) Basically, I think it is hard to charge Google users for services. I think no one would pay for their email account or google plus since there are free substitues. But I think especially with Android google could use Cross Selling effects or bundling effects. Maybe you only get Android with a certain subscription service...

4) I think for google it will be hard to experiment with hardware, since most of the Google employees are programmers. I think google could start to experiment more with mobile services. I would spent my 20 % project time with developing a virtual augmented reality app. The app knows where you are and what you like and the app gives you suggestion where to go. But not in 2D, but in 3D....

Hey,

I just saw a quick funny video on the fact that Google "reads" emails.. Apparently it was made by microsoft

I cannot send it directly to the the forum, I got this message "New members are not allowed to post external links or emails for 7 days. Please contact the forum administrator for more information." but if you wanna see it, just go on youtube and search for "GMAIL MAN" video.
Cheers

LeeAnn wrote:If I understand you right, google "reads" your email or docs in order to search for keywords which show them what your interests are. Of course, it will be able to show you better suitable advertisement which is great for the advertiser, but is that what we want? The trend today is to put your whole life on the internet but I think that this will change (or already is changing) and when that happens for real, google will probably have to rethink this part of their strategy.

chaohungchen wrote:I think Google still try to integrate many Google's product with Adwords which is how they earned in business model.
For example, when you use Gmail to read your mail, there are many Keyword Advertisement based on different words in your mail.
So it means that Google can use variety ways and product to stimulate the growth on sales of Adwords.

I think Google will still develop many different products which can integrate with Adwords , like some advertisements in Google Docs,or in Google App Engine.
And Google have been used the same business model which gained profits from search engine's Adwords since Google was founded.
Therefore,I think that Google's business model is sustainable.

r99725051 wrote:
It's more difficult than just a click. They charge by effective click.
Not only a click, they need to concern about how long do clicker stay? Does he really want to view the page or just wrong click?
But this is only a part for their Ad revenue. They also charge for ranking, company who want to be found first will pay the money to buy the position, this is also an easy way to get money from Google.(I'm not quite sure is it still have this business right now)

I agree with you that Google charge by the user's stickiness time.

But I think Google won't change its search result even if someone pay or ask to it.
As Google's famous slogan: "Don't be evil." means that they never manipulate rankings to put our partners higher in their search results. No one can buy better PageRank.
And I think that's the reason why everyone or every company wonder about Google's SEO algorithm. )

Greetings,

1) This is a very good question. Banners and popping ads are most of the time fed with trackers that slows/damages one's PC system as a result. Therefore I have never opened a banner that pops up in my screen. My online buying habits considerably exceeds the on-store ones. But to be franc, I only proceed through ads followed by a purchase. otherwise almost never.

2) UGC in my opinion is one tool that helps progressing advertisement considerably beside original publicity. But this has to be of a great quantity (the more the better) in order to show reliability for the end users. I e.g. don't rely on rating that are less then 10 individuals concerning a movie in the cinema.

3) If I understand it right, then I would agree with Patrick.

4) It is always bound with risk to enter new industry branches, for instance the hardware. I think the cell phone industry is good option and since google had acquired Motorola for 12.5 billions USD, this seems to be realistic soon. However, I find it more potential in the personal Pad area as they are more comfortable in what concerns information searching, which is what google masters.

Cheers,

I never click the ads either.
And this let me think of another question, neither in google's view nor in user's view, but in advertiser's view,
are google ads really beneficial for them? how do they measure it?

For advertisers, the reason to put their ads on Google continually is that they can get a real, meaningful promotion,
and it's not that easy to measure the specific benefit from the ads, and as Aiko said, few of us will click on the ads,
but there are still so many advertisers willing to use it continually, so they must get somewhat benefit,
(maybe they just want a glimpse from the users? users need not to visit their webpage?)
the collaboration between Google and advertiser and the measurement of benefit are quite interesting.

aiko wrote:It seems that most of the people think Google's current business model is sustainable.
Since google Ad is charge by click, I am really interested in how many people have ever click on the advertisement?

For myself, even I google a lot, and always log on gmail, I never tend to click on the advertise.
I agree with what Dennis had said "people will also be more and more accustomed to the ads presented online".
If this argument stands, do you think google's current business model is still sustainable?

Glen Yang wrote:I never click the ads either.
And this let me think of another question, neither in google's view nor in user's view, but in advertiser's view,
are google ads really beneficial for them? how do they measure it?

For advertisers, the reason to put their ads on Google continually is that they can get a real, meaningful promotion,
and it's not that easy to measure the specific benefit from the ads, and as Aiko said, few of us will click on the ads,
but there are still so many advertisers willing to use it continually, so they must get somewhat benefit,
(maybe they just want a glimpse from the users? users need not to visit their webpage?)
the collaboration between Google and advertiser and the measurement of benefit are quite interesting.

aiko wrote:It seems that most of the people think Google's current business model is sustainable.
Since google Ad is charge by click, I am really interested in how many people have ever click on the advertisement?

For myself, even I google a lot, and always log on gmail, I never tend to click on the advertise.
I agree with what Dennis had said "people will also be more and more accustomed to the ads presented online".
If this argument stands, do you think google's current business model is still sustainable?

I have actually clicked a few ads in my life. I am also a little guilty to have clicked ads of companies that I did not like so much, just to cost them a few cents.

Most advertisers will probably use software like Google Analytics to determine the amount of "Conversions" the ads amount to. This way, it is possible to track which users clicked on the ad and who of them eventually perform the desired action. This can be anything from buying a product to signing up for a newsletter. If the result is not satisfactory, it is very easy to stop advertising.

Granted, this method does not account for the users who have seen the ad and are influenced by it, but have not actually clicked on it.

I would disagree with the assertion that Google's revenue stream is not as diverse as Microsoft and Apple. Rather, in recent years, Google has aimed to go head to head with both companies, causing a battle on multiple fronts, each equally important. For mobile OS, Android user penetration rates have been increasingly steadily, even though Apple OS has a 37% vs 27% lead over Android. Apple of course has recognized Google as a legitimate threat and is doing its best to wean off of Google's products, creating its own iAd system, which is to compete with Google's AdWords. While most iOS users are still dependent on Google for traditional search, maps and chat are slowly migrating towards native Apple applications. While the first Google Nexus did not penetrate the market so efficiently as the Apple iPhone, Google has shown a willingness to confront Apple in the hardware department. Mobile handsets will increasingly be the most important battleground as computer power gets smaller and compact, moving away from the traditional desktop PC era, especially in developing countries where handsets are more affordable than complete computing rigs.

Against Microsoft, Google has given consumers a free alternative to the Office Suite with fewer options and a ZERO price tag. Regardless of industry competing with FREE is a daunting challenge and MS has fought back with a free version of Office in exchange for ads placed strategically in the traditional workspace. Bing has been unable to take marketshare away from Google and MS has been forced to engage in merger talks with Yahoo.

To say that Google's revenue streams are not as diverse as Microsoft and Apple may have been true in its nascence, but no longer holds true. Sticking to its forte of search is not a bad strategy by any means, as it is the portal to all of Google's other offerings. Even though many on this forum do not regularly click on ads from Google is of little importance. By going to Google to search up on information on the products we want, we have already committed ourselves as customers to the company.

Google changes their business model from the past.
At beginning, they were good search engine provider, and then they had to sponsored search, which seemed the only way to get money from free web service.
As time pass by, Google start to develop more kinds of service like web browser (chrome), Google OS, etc. And then, it comes Android, which is another system compare to iOS.
Google knows himself very much. Their core competence is creativity and software development ability. For a long time Google really focused on software technique improvement, and then they tried to provide a total solution: moving everything to cloud.
Compare Google with Apple and M$ is not so fit, Apple & M$ started from hardware, Google started form software. Google is more like Yahoo! or Facebook, which start from single web service, comes to more diversity. If observing these corporation, Google is the only one going more further to OS, browser, cloud docs, and is the only one trying to develop laptop and mobile phone by their own.
So in this view, Google business model is still developing and expending. It’s still not the time to judge their revenue stream right now.

r99725051 wrote:Google changes their business model from the past.
At beginning, they were good search engine provider, and then they had to sponsored search, which seemed the only way to get money from free web service.
As time pass by, Google start to develop more kinds of service like web browser (chrome), Google OS, etc. And then, it comes Android, which is another system compare to iOS.
Google knows himself very much. Their core competence is creativity and software development ability. For a long time Google really focused on software technique improvement, and then they tried to provide a total solution: moving everything to cloud.
Compare Google with Apple and M$ is not so fit, Apple & M$ started from hardware, Google started form software. Google is more like Yahoo! or Facebook, which start from single web service, comes to more diversity. If observing these corporation, Google is the only one going more further to OS, browser, cloud docs, and is the only one trying to develop laptop and mobile phone by their own.
So in this view, Google business model is still developing and expending. It’s still not the time to judge their revenue stream right now.

I agree in the point that we should not judge their reevenue stream but I think it is a interesting topic to discuss about. As already has been said Google's revenue stream derives mainly from ads and I think this is only possible because of the big market share of Google. Considering search engines there are no really competitors for Google in the western market. But I think in Asia it can develop a little bit different (Baidu in China and Naver in South Korea for example ), also Russian customers prefer another search engine like Yandex.

If the market share of Google will decline somedays the revenues of the ads will be less as well. I think Google will stay successful especially in the Android market but many services are offered for free so if the market share will shrink I think Google has to consider its revenue stream. In addition to that I can also imagine that Facebook will become a competitor in the Cloud market and perhaps in some years also in the mobile market.

Thank you to clear my misunderstanding. I just mess keyword ranking and page ranking up.
So I look for some more detail information about this part:

google search results are sorted depends on google page rank (Quality Score) .
Price is not the same with the set, not set manufacturers need to click each time was how much to pay, but each set is clicked, the maximum amount of money will charged. That is because google does not calculate the same money per click, even if you pay low price per click, but your site is doing OK, the quality score is high, after the operation, your ranking of website may appear at the top.
As the cost per click isn't fixed, it is difficult to really know exactly price of each is clicked, only can guess.Google hope everyone make efforts intended to run their own website, enrich site content-based, whether than spend money on advertising.

url:http://bluenet.pixnet.net/blog/post/29246901-%E8%B3%BC%E8%B2%B7google%E9%97%9C%E9%8D%B5%E5%AD%97%E6%99%82%EF%BC%8C%E5%85%B6%E6%8E%92%E5%90%8D%E8%A6%8F%E5%89%87%E5%92%8C%E9%82%8F%E8%BC%AF-%3f-%E5%85%B6%E6%AF%8F

It's Chinese page, I just translate some paragraphs.

MeiShinLee wrote:

r99725051 wrote:
It's more difficult than just a click. They charge by effective click.
Not only a click, they need to concern about how long do clicker stay? Does he really want to view the page or just wrong click?
But this is only a part for their Ad revenue. They also charge for ranking, company who want to be found first will pay the money to buy the position, this is also an easy way to get money from Google.(I'm not quite sure is it still have this business right now)

I agree with you that Google charge by the user's stickiness time.

But I think Google won't change its search result even if someone pay or ask to it.
As Google's famous slogan: "Don't be evil." means that they never manipulate rankings to put our partners higher in their search results. No one can buy better PageRank.
And I think that's the reason why everyone or every company wonder about Google's SEO algorithm. )

One ways for google to diversify its revenue stream would be to make their services more attractive for companies. For example, a corporation may not allow their employees to collaborate on google docs, because of data security issues. Google could then setup up a google docs server insinde the corporate intranet so that it is only accessible by employees. Google could charge a monthly fee with a support contract or charge a one time fee.