How Does Google Make Money and What You Can Learn From It
You might be wondering, especially with all of the freebies they give away, how DOES Google make money? After all, they offer plenty of free services that you likely use (and might even make money off of yourself). Just think of all the different programs Google let's you use; and all at no cost to you:
- Gmail
- Google Docs (including documents, presentations, spreadsheets, forms and drawings)
- RSS Readers - so that you can subscribe to your favorite websites.
- YouTube - so that you can freely distribute videos.
- Picasa - a photo sharing program
- Blogger - so that you can create your own blogs
- Books - They give you the ability to read many free books online
And this is just the tip of the iceberg. With so many people online who use Google, you can probably tell that this takes up a LOT of resources. And resources cost money. So where do they make their money then? It's simply this: advertising.
Whenever you do a search in Google, visit your Gmail account, or even visit a website, you'll see ads that say "sponsored by Google". These ads are part of Google's advertising program called "AdWords" and it's where individuals and companies alike go when they want to advertise their product or service. Everyone who wants to advertise within the AdWords program pays Google a certain amount of money every time someone clicks on one of their ads.
The amount of money that's paid per click depends greatly on how competitive the term is that the advertiser chose to advertise on and it can range from just a few cents all the way up to hundreds of dollars. Considering that thousands upon thousands of people pay to advertise on AdWords, you can see how this would really add up; thus allowing Google to pay for all of those resources they're giving away for free.
So what can you learn from this business model?
Plenty. If Google has achieved such raving success by simply giving things away for free; then this should be something you should personally take into consideration. When someone visits your website, what happens? Do you hit them first with a sales message? Or do you offer something to them for free?
If you do offer them something for free, and then follow up with them later, are you again hitting them with sales messages or do you continually give them helpful and useful information? This is not to say that you simply just continue to give and give. Obviously you'd go broke in your business if you did that, but the key here is to...EARN TRUST.
Google didn't become a success overnight. They gave and gave free information to you in order to...BUILD TRUST. And it wasn't until that trust was built that they started to offer advertising on their network. The bottom line is, Google makes money by selling advertising BECAUSE they first built trust in their brand. And they did this by showing you that they had great products and let you use those products for free.
This is how they built their business model which has become wildly successful. Now, if they've become so successful at this kind of business model doesn't it make sense that you could too?