Revenue model

AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads.

Pay-Per-Click advertisements (PPC)

Advertisers specify the words that should trigger their ads and the maximum amount they are willing to pay per click. When a user searches Google's search engine on www.google.com or the relevant local/national google server (e.g. www.google.co.uk for The United Kingdom), ads (also known as creatives by Google) for relevant words are shown as "sponsored links" on the right side of the screen, and sometimes above the main search results. The ordering of the paid-for listings depends on other advertisers' bids (PPC) and the "quality score" of all ads shown for a given search. The quality score is calculated by historical click-through rates, relevance of an advertiser's ad text and keywords, an advertiser's account history, and other relevance factors as determined by Google. The quality score is also used by Google to set the minimum bids for an advertiser's keywords[1]. The minimum bid takes into consideration the quality of the landing page as well, which includes the relevancy and originality of content, navigability, and transparency into the nature of the business [2]. Though Google has released a list of full guidelines for sites [3], the precise formula and meaning of relevance and its definition is in part secret to Google and the parameters used can change dynamically. The auction mechanism that determines the order of the ads has been described as a Generalized second-price auction. In this the highest bidder gets the top slot , the second highest bidder gets the second top slot and so on.

Placement targeted advertisements (formerly SiteTargeted Advertisements)

In 2003 Google introduced site-targeted advertising. Using the AdWords control panel, advertisers can enter keywords, domain names, topics, and demographic targeting preferences, and Google places the ads on what they see as relevant sites within their content network. If domain names are targeted, Google also provides a list of related sites for placement. Advertisers may bid on a cost per impression (CPI) or cost per click (CPC) basis for site targeting [4]. With placement targeting, it is possible for an ad to take up the entire ad block rather than have the ad block split into 1 to 4 ads, resulting in higher visibility for the advertiser. The minimum cost-per-thousand impressions bid for placement targeted campaigns is 25 cents. There is no minimum CPC bid, however. Cost per impression: An online advertisement impression is a single appearance of an advertisement on a web page. Each time an advertisement loads onto a user's screen, the ad server may count that loading as one impression. However, the ad server may be programmed to exclude from the count certain nonqualifying activity such as a reload, internal user actions, and other events that the advertiser and ad serving company agreed to not count. For online advertising, the numbers of views can be a lot more precise. When a user requests a web page, the originating server creates a log entry. Also, a third party tracker can be placed in the web page to verify how many accesses that page had. It is important to remember that when someone says something like, "our CPM is $5," this means that the cost per impression is $0.005.

Cost per click: Cost per click (CPC) is the amount of money an advertiser pays search engines and other Internet publishers for a single click on its advertisement that brings one visitor to its website.

The AdWords program includes local, national, and international distribution. Google's text advertisements are short, consisting of one title line and two content text lines. Image ads can be one of several different Interactive Advertising Bureau (IAB) standard sizes. The Interactive Advertising Bureau (or IAB) is an advertising business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry. The organization represents a large number of the most prominent media outlets in the United States.

--------------------------------------------------------------------------------------------------------------Google offers targeted advertising solutions and global Internet search solutions. Its principal products and services include: Google AdWords Google AdWords is a pay per click advertising program of Google designed to allow the advertisers to present advertisements to people at the instant the people are looking for information related to what the advertiser has to offer. When a user searches Google's search engine, ads for relevant words are shown as "sponsored link" on the right side of the screen, and sometimes above the main search results. Google generate most of the revenue from Google AdWords. In year 2005, Google launched the Google Publication Ads Program through which they distribute their advertisers ads for publication in magazines. Google recognize as revenue the fees charged advertisers when their ads are published in magazines. Pay per Click Advertising: Pay-Per-Click (PPC) is the best way to send immediate, targeted traffic to your website. It is an online advertising payment model in which payment is based onqualifying click-throughs. An advertiser has to pay every time his ad receives a click. The Advertisers decide the keywords relevant to their offer that should display their ad and the maximum amount they are willing to pay per click for that keyword.

Google History:
Googles beginning Google began as a research project in January, 1996 by Larry Page and Sergey Brin, two Ph.D. students at Stanford University. They hypothesized that a search engine that analyzed the relationships between websites would produce better results than existing techniques which essentially ranked results according to how many times the search term appeared on a page.

It was originally nicknamed BackRub, because the system checked back links to estimate a sites importance. A small search engine called RankDex was already exploring a similar strategy. Convinced that the pages with the most links to them from other highly relevant web pages must be the most relevant pages associated with the search, Page and Brin tested their thesis as part of their studies, and laid the foundation for their search engine. Originally the search engine used the Stanford University website with the domain google.stanford.edu. The domain google.com was registered on September 15, 1997, and the company was incorporated as Google Inc. on September 7, 1998 at a friends garage in Menlo Park, California. U.S. Patent 6,285,999 describing Googles ranking mechanism (PageRank) was granted on September 4, 2001. The patent was officially assigned to Stanford University and lists Lawrence Page as the inventor.

In 1998, Google was almost cluttered. Back then there was still some emphasis on Stanford Search, showing the roots of where Google comes from. Also, right on the front-page you could subscribe to the Google Friends newsletter. And of course, Google with the not so pretty logo cofounder Sergey made in GIMP was still in Beta See Google in 1998. In 1999, you can see Google realizes its search engine can stand on its own, and focuses on something the competitors at that time were slowly losing: total focus on search, with a completely uncluttered homepage. Google.com would never again have as little links as in 1999. The logo at that time is still a bit ugly and Google still feels the need to explain what it does (search the web using Google). See Google in 1999. In 2000, after having survived the Y2K bug (and about to be surviving the dotcom crash), Google localizes with a language box, and also offers jobs and an about page highlighted with blue bullets. In 2000, Google out of Beta now was proud to be named Best Search Engine by Yahoo Internet Life. Google is also pushing its WAP services on the front-page. On a side-note, I can see SM instead of TM next to the logo Disclaimer: I dont know if this Archive.org depiction of Google.com, with the non-centered logo, is completely accurate. See Google in 2000. In 2001, some days after the 9/11 attacks on the World Trade Center, Google offers condolences to the attack victims. Along with the Madrid bombings years later, this would be about the only time Google shows news and support links on the front-page. See Google in 2001. In 2002, Google changes its mind about where to put additional links (which grow in introduces blue tabs on top of the search box. The index size is now advertised position, and the three links to the right side of the search box are what were (advances search, preferences and language tools). Also in 2002, one of the first (the on Google started, and it soon became highly popular. See Google in 2002. number), and in the footer having today first?) weblog

On this screen from 2003, Google celebrates Valentines Day. Not much else is new on the homepage, but the index size increased a whalopping 1 billion pages (not a huge increase by todays standards perhaps, but those were different times only three years ago). See Google in 2003 In 2004 (here showing with an Olympics logo), Google got rid of its tabs on top of the search box, making the page simpler again, while taking their company public. They now had a list of links (Web, Images, Groups, News, and Froogle no more Directories), as well as a more link to get to Googles list of services. This approach scales a little better, but still only the most popular Google services (by the traffic they get, from what we know) will ever make it on the select few homepage links. See Google in 2004 In 2005, Googles index size almost doubled from last year. Google introduces Google Local to the front-page and gets rid of its Business Solutions link at the bottom. See Google in 2005

In 2006 (the year Google somewhat lost their innocence due to search censorship cooperation with the Chinese government), chances are high youre logged into one of the many Google services with your Google Account. That means youll also be seeing the somewhat awkwardly positioned personalized links pane in the top right. Other than that, the Business Solutions link returned, and theres no more index size indicator in Googles footer. Still, search for two wildcard characters and you might see something in the range of 25 billion indexed pages weve come along way. See Google in 2006

Google History:
1998

TOP

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2006

Acquaintances of Google:

On September 28, 2005, Google announced a long-term research partnership with NASA which would involve Google building a 1-million square foot R&D center at NASAs Ames Research Center. NASA and Google are planning to work together on a variety of areas, including large-scale data management, massively distributed computing, bio-info-nano convergence, and encouragement of the entrepreneurial space industry. Time Warners AOL unit and Google unveiled an expanded partnership on December 21, 2005, including an enhanced global advertising partnership and a $1 Billion investment by Google for a 5% stake in AOL. Additionally, Google has also recently formed a partnership with Sun Microsystems to help share and distribute each others technologies. As part of the partnership Google will hire employees to help in the open source office program OpenOffice.org. Google has also recently begun to experiment with other markets, such as radio and print publications. On January 17, 2006, Google announced that it had purchased the radio advertising company dMarc, which provides an automated system that allows companies to advertise on the radio. Google was added to the Standard & Poors 500 index (S&P 500) on March 31, 2006. Google replaced Burlington Resources, a major oil producer based in Houston which was acquired by ConocoPhillips.

Google has incorporated many acquisitions since 2001, keeping in view very common characteristics like:

Small Companies with excellent and highly talented professionals. Innovative and attractive ideas/products/technology developed by them. Companies with private start ups with a comparatively lesser price tag.

Google is the new Internet behemoth, snatching up small companies left and right. Google's past conquests have been varied, but they have all been smallish Internet companies that are doing cool stuff. I'll go through them here, with a brief blurb about how they were acquired, and what has changed in the post-Google era. There are also a number of other companies that would appear to be a good match for Google, but cannot be for various reasons. Many of these include non-profits like The Internet Archive or Wikipedia. Others like IMDb are owned by other larger companies which would not sell them (in this case Amazon.com), and still others are open-source driven like BitTorrent or the Mozilla

Foundation (also a non-profit) and would not make a good fit in a corporate environment. Many of the companies listed below might not be considered by Google alone. Microsoft, Apple, Amazon.com, Adobe, and Yahoo! are just a few of the web giants that have made it a habit of buying attractive Internet companies. We bet they're regretting that they never approached Google itself with an offer! Biggest acquisition by google till date: Applied Semantics for $ 102 Million USD. The following is the detailed table illustrating its series of acquisitions made and the logics behind undertaking those.
Year Month Company Description of the Company

2001

February

Deja (The Usenet It was incorporated to become a part of the re Archive, not the launched Google Groups. company) Outride Inc.

September

Outride was a by-product from Xerox (PARC). Outride.net domain name still exists, but currently forwards to Google.

2003

February April April

Pyra Labs Neotonic Software Applied Semantics

A weblogging provider and owner of Blogger It was acquired as a part of Googles plan to bring its CRM technology into house. Applied Semantics was a context ad company whose acquisition by Google was integrated into Google's AdWords/AdSense programs. It was acquired to develop and launch Google Personal. It was acquired to enhance Google's AdWords and AdSense program. It was another web logging provider.

September October October

Kaltix Sprinks Genius Labs

2004

April

Ignite Logic

It's a startup which helps law firms set up web sites. But why buy them? If you have good tech and processes to get a law firm's site up and running, one might imagine it just might scale to the entire SMB market (and beyond). Google paid $5M for a 2.6% ownership of it (Chinas most used Internet Search Engine) Picasa was acquired to provide picture management tools to Blogger. It was acquired to provide capabilities in Google Earth. the core mapping

June July October SeptemberDecember

Baidu Picasa Keyhole Zipdash & Where2 LLC

The 2 Silicon Valley start-up companies: ZipDash and Australian firm Where2 LLC, founded by Lars Rasmussen. The technology provided by ZipDash was used to develop and launch Google Ride Finder. Where2 provided the core mapping capabilities in Google Maps.

2005

N/A

15 Companies (2Web The combined purchase price for these 15 companies

Technologies included) was

equal to $130.535 Million USD. The acquisition of 2Web reveals that Google already had plans for a spreadsheet product back in 2005. The acquisition of 2Web was a key part of the plan to develop and launch Google Spreadsheets. analytics tools provider: Urchin Software Corporation was acquired and was used to develop and launch Google Analytics. A social networking software provider for mobile devices was acquired.

March

Urchin Corporation

Software Web

May July

Dodgeball

Current Google, in combination with Goldman Sachs, and the Communications Group Hearst Corp., invested a total of $100 Million into

Current Communications Group. July

Akwan Information It was acquired as a part of its plan to open an R&D Technologies office and expand its presence into Latin and South

America.

July

Reqwireless

Google acquired Canadian start-up firm Reqwireless, a Web browser and Mobile e-mail software developer for wireless devices, as a part of its initiative to develop a version of Gmail for the mobile device It was a software provider for mobile devices.
AOL Google paid $1 Billion dollars to acquire a 5% stake

August December

Android Inc Time Warner's division

in it.

2006

January

dMarc Broadcasting

Google acquired dMarc Broadcasting, creator and operator of an automated platform that lets advertisers more easily schedule, deliver, and monitor their ads over radio, and radio broadcasters to automate schedules and advertising spots. Purchase price was for $102 Million, with an additional payout of $1.136 Billion over three years if certain performance targets are met. Google acquired Measure Map from it which is a product to help with Blog Analytics. Writely is a web-based word processor currently in beta, and soon to be integrated into Google's suite of web applications. Using a plug-in, this program allows you to place 3D models into Google Earth.

February March

Adaptive Path Writely

March April

Sketchup

Advanced Text Search Google acquired an advanced text search algorithm Algorithm from the University of New South Wales in Australia.

The algorithm was invented by Ori Allon, an Israeli student. Terms of the deal and purchase price were not disclosed. A web-based and Flash-based IM client that focused exclusively on interfacing with Google's GTalk.

May

GTalkr

Growth With Googles gargantuan size comes more competition from large mainstream technology companies. One such example is its rivalry with Microsoft. Microsoft has been touting its MSN Search engine, and more recently its Windows Live search in February, 2006, to counter Googles competitive position. Furthermore, the two companies are increasingly offering overlapping services, such as web mail (Gmail vs. Hotmail), search (both online and local desktop searching), and other applications (for example, Microsofts Windows Live Local competes with Google Local) and many acquisitions.