How Google Makes Their Money?

Everyone knows who and what Google is. Those who don’t must have time traveled to 2008, because Google is one of the most well-known companies around.

Now, most people wouldn’t even classify Google as a company. Most think of Google as merely a search engine, but Google is in actual fact a company that generates a net income that wiggles in the billions!

A question that many ask is ‘how exactly does Google make money?’ or ‘what exactly drives Google’s growth?’

In short, most of Google’s yearly revenue comes from advertising revenue.

When you open Google and type in your keyword/s, like for instance the word "car rentals" then you will notice that at the top and on the right hand side of the page there are sponsored links.

These sponsored links show adverts of different websites. These adverts are adverts that the advertisers (websites) have to ‘bid’ on. The more popular the keyword chosen, the more money needs to be paid for the advert.

The nice thing about the sponsored links is that the advertiser will be advertising to an audience that is already interested in the ‘business’ that the advertiser is trying to sell. This means that if the keyword you are searching is "car rentals", then Google will only display sponsored links/adverts that are relevant to your search query- relevant to the keyword "car rentals".

These adverts that advertisers bid on works on a ‘pay per click’ basis. This means that each time someone clicks on one of the sponsored links, the website whose link they are clicking on will have to pay a certain amount. Each click costs a certain amount to the advertiser- the more popular the keyword the advertiser bids on, the more expensive this keyword will be and this means the more the advertiser will pay per click.

In addition to this, some websites have sections where they host "ads by Google". This program is called "Adsense" and this gives website owners the opportunity to place Google ads on their sites. Again, these ads are always relevant to the particular website it is featured on. The websites these ads are displayed on gets paid a percentage on every click made via their website on one of these ads.

Of course, Google also generates money through other businesses they own and the shares they sell. Google’s share price has been climbing since its inception and by selling shares the company has also earned quite a significant amount.

All the above is exactly how Google makes their money.