Over the years, Google has continued to dominate all other players in the search engine market. Currently, the company holds over 80% market share globally, having diversified to other products, including Gmail, maps, trends, analytics, classroom, drive, console, cloud, Chrome, YouTube, Workspace, Android, Translate, photos, meet, scholar, etc. Google is arguably one of the most valuable companies worldwide due to its market dominance and technological investment in artificial intelligence.
Looking at its success, one wonders how the giant corporation has become so prominent over the years. The answer to its success can trace back to Google’s Business Model.
What Is A Business Model?
A business model is a company’s strategy for profit-making. However, an efficient business model is much more comprehensive and involves customer segments, key partners, and delivery channels, among other techniques. It is much more involving than simply establishing how a company makes money. It provides a roadmap for the business and identifies products and services the company plans to sell.
A business model includes production activities such as supplies, design, manufacturing, and raw material. However, another part involves other essential activities when selling a product. These include finding the target market, closing a sale, product distribution, and delivery services. It is the two sides of a business model.
Google’s Business Model
Google operates on a multisided platform which has gained popularity in recent years. Many startups and small and medium enterprises rely on this business model. A multisided platform business model is a service or product connecting two or more participants that play an intermediary role. Its value proposition is to improve efficiency within this connection and make it simpler to find and relate with each other.
Though it began as a search engine, Google has evolved into a tech giant with multiple services that offer solutions to myriad challenges. Google overshadowed the yellow pages by making it possible to find business locations and cities worldwide. It also reduced learners’ visits to libraries by streamlining access to a collection of files at a click of a button. Society has become a global village thanks to Google’s contribution of unveiling new products and services that encourage businesses to easily interact globally.
Google has a hidden business model since users don’t pay for the service, but the primary revenue comes from paid media, similar to that of communication companies. Brands pay to advertise and reach their target audience on the search engine. Advertising on this platform is very beneficial due to Google’s massive reach that covers over 90% of all online searches. In order to understand Google’s Business Model better, it would be beneficial to analyze where the company started and how far it has come.
A Brief Account Of Google’s History
Google started as a search engine on September 4th, 1998, and was created by Larry Page and Sergey Brin while Ph.D. students at Stanford University. Originally, Google received funding from Andy Bechtolsheim, Amazon’s Jeff Bezos, David Cheriton, and Ram Shriram. The company also received a boost from venture capital firms Kleiner Perkins and Sequoia Capital.
In 2015, Google became a fully-owned subsidiary of the parent company Alphabet Inc. after a restructuring that happened at Google. Larry Page was the CEO until October 2015, when Sunday Pichai replaced him at Google, and he, Larry, became the CEO at Alphabet. However, on December 3rd, 2019, Sundar Pichai was appointed CEO at Alphabet and currently heads both establishments.
How Google Makes Money
Google’s activities are divided into two:
- Google Services
- Google Cloud
Google services and the cloud jointly provide IT infrastructure which facilitates online searches. Below are some ways in which Google makes its revenue.
A huge chunk of Google’s revenue comes from advertisements on Google and YouTube. An advertiser only pays after a user has taken action, like watching an ad or clicking on a link. Google tracks these actions, and the Cost Per Click is measured. The other option is Brand Advertising, where advertisers pay for Cost Per Impression (CPM). CPM works best when an advertiser wants to reach a broader target audience to increase brand visibility.
Google’s advertising platforms
Google Ads is an online brand awareness platform where advertisers bid to display brief ads, videos, or product listings to web visitors. Whenever someone searches online, ads relevant to the search will appear at the top of the page. Every time a user clicks on these ads, the advertiser pays Google a fee. The service is offered under a Price Per Click (PPC) model, which is the primary source of revenue for Alphabetic Inc. Google ads is a system that operates with the help of keywords and cookies. Advertisers pay when web visitors click on their ads while browsing the internet.
Google AdSense is a service whereby Google web publishers serve image, video or text ads targeted at the site audience. Web owners provide spaces for Google Ads, which will display depending on a browser’s searches. These ads can generate revenue on either a per-impression or Pay-Per-Click basis.
2. Google Shopping
Google shopping is a search engine that applies Google’s search technology to help visitors research and find products from online stores. The service hosts various online stores and allows users to compare rates easily with competing brands—Google Merchant Center and Google Ads influence Google shopping. Whether an entrepreneur or marketer, you can apply for a free Google Shopping account. There’s no charge for listing your products. With this app, you can run paid targeted ads, set up promotions, or create brand awareness campaigns at a fee.
Advertisers pay to have their ads appear before, in the middle, or after viewers watch videos on YouTube. They pay to display their ads in these spaces, whereby the content is related to that audience.
4. Google AdMob
Google Admob is a mobile advertising service that offers marketing options to multiple platforms, including Android, Windows Phone, iOS, web browsers, and Flash Lite. AdMob simplifies revenue generation with app ads making it easier for app developers to earn from their apps. It also improves efficiency with actionable insights and powerful, easy-to-use tools that help grow app businesses.
5. YouTube Premium
YouTube Premium is a paid service that offers ad-free streaming on YouTube Music, YouTube Gaming, or YouTube.
6. Google Cloud
Google Cloud is a subscription business model whereby companies pay depending on the number of resources they use. It consists of a suite of cloud computing services that operate independently to provide resources for operating applications online.
7. Google Pixel
Google Pixel merges with Google Homes to assist companies in developing technological gadgets for homes, such as doorbells, alarm systems, locks, thermostats, smoke systems, or cameras.
Google’s Customer Segments
Three Google customer segments include users, content publishers, and advertisers.
Users consist of anyone searching on Google’s search engine, for something online and consists of Google’s largest market. This segment supports Google because, without an audience, there would be no traffic.
Advertisers consist of business owners, large or small companies, advertising agencies or individuals who want to create brand awareness.
Content publishers create content with the hope of publishing and monetizing it. Whether news websites, bloggers, digital influencers, or entertainment sites, the primary purpose of publishing content is to generate traffic and get a good return on investment from it.
Google’s Value Proposition
One benefit of Google is that it has a value proposition for all its customer segments.
Whether organically or through paid media, it is possible for you as a content creator to monetize your content and generate an income. Thanks to Google, it is possible to drive traffic using appropriate content and earn cash from it.
Google Ads depend on keywords users look for and terms buyers research before purchasing. This is good news for advertisers because adverts target people with purchase intent, increasing the ad’s accuracy. And advertisers get to spend money on the specific audience they are targeting.
One significant benefit for web users is that they can freely access organized information on numerous subjects quickly and efficiently. Whether using a smartphone, laptop, tablet, or desktop, you can self-train yourself and perfect any skill.
Google’s Mission Statement
Google’s mission is to streamline the world’s information and make it universally accessible and helpful. Its vision is to provide an essential service globally by instantly delivering relevant information on virtually any subject. With its strategic approach to organizing information for online users, the company has become better structured, making it accessible and indispensable. The three main components of Google’s mission statement are sharing new ideas, global accessibility, and its heightening organization.
Google has provided a stable platform for brands to disseminate their content. The company is credited for its informative nature and ability to empower users through its variety of channels designed to ensure users have access to limitless resources of information.
The company has grown to offer multiple products and services besides its search engine services. Google’s list of services is extensive, as it has numerous products and almost 200 Google apps on Android. The following is a compilation of products, services, and software applications provided by Google.
1. Google Search
Google Search is a fully automated service by Google Inc. which uses a proprietary algorithm and web crawlers designed to explore the internet and find pages. Whether you’re looking for information or a location, a simple Google search can help you gain comprehensive information about a topic or place.
2. Google Assistant
Google Assistant is a virtual helping software application based on artificial intelligence that operates on various devices, including cars, smartphones, and home appliances. Users interact with Google Assistant through natural voice to respond to questions, adjust hardware settings, set alarms, play games, schedule events, and so much more.
3. Google Alerts
Google Alerts is a free notification service that sends emails to subscribers when there’s a new result for search terms or queries. The tool tracks online content containing specific words or phrases you’d like to follow. With this tool, users can set up notifications for any keywords.
4. Google Books
Google Books searches text in books and magazines that Google has scanned and stored in its database. Publishers and authors provide books through the Google Books Partner Program or by Google’s library partners through the Library Project. Google scans and adds these books to its digital inventory, considered the most extensive online storage of human knowledge.
5. Google Travel
Google Travel is a trip planning service that provides information or travel suggestions based on recent searches like saved hotels, rentals, things to do, flights, price tracking, etc. By utilizing Google’s search engine, travel guides are available for specific destinations.
6. Google Videos
To support its tool for searching web pages, Google also provided searches through video clips, a service that was launched in 2005. Similar to YouTube, this service allows video clip hosting on Google servers that can be embedded on websites. In 2009, Google stopped accepting video uploads because it launched YouTube, allowing users to publish their videos directly onto YouTube. In 2012, Google shut down the video hosting service.
7. Google Images
Google Images launched in 2001 and allowed users to search for images online. In 2011, Google added reverse image search functionality, a content-based image retrieval (CBIR) query technique that involves furnishing the CBIR system with sample images on which the search will be based. Reverse image search allows users to discover content related to specific images.
Publishing And Communication Tools
Google acquired Blogger, an American online content management system, in 2003. Google hosts these blogs through a subdomain or they can be accessed through a user-owned custom domain. Despite its decline in popularity in the US, Blogger has a broad international user base and supports multiple languages, including French, German, Italian, French, Chinese, Portuguese, and many other foreign dialects.
2. Google Classroom
Google Classroom is a free learning platform developed for learning institutions that simplify generating, distributing, and grading assignments. The service streamlines the process of sharing files between learners and tutors. The platform integrates several Google applications for learning to manage student and teacher integration.
3. Google Chat
Google chat is a communication service that allows direct messaging, spaces, and group conversation. The platform enables users to create and assign tasks, chat and share files from a central location.
4. Google Meet
Google Meet is a video-conferencing service that replaced Google Hangouts and allows users to hold virtual group meetings.
How Does Google Work To Improve Service Delivery?
Google’s Key Resources
Google’s core business is to ensure a good user experience for its customers. It relies on data centers, IT infrastructure, IPs, servers, and human resources to deliver its services. Google has several primary vital resources that include: –
1. Crawl And Index
Google uses software that crawls the internet in search of existing pages and indexes them according to their subject and content. This index entails Google’s database that accommodates all material accessible to its spiders as they crawl the internet.
2. Streamlined Search
Google presents recent, high-volume searches using suggestions or autocompletes, thereby improving search results by a considerable margin. The search engine tries to disqualify questionable sites that promote spam, click-baiting, or misinformation and gives browsers a positive user experience while conducting online searches. In summary, Google tries to understand what a browser is searching for, making it easier to find whatever they are looking for.
3. Search Algorithm
With numerous pages released on the web, Google has tools and software that take the responsibility of organizing the result of each search through keywords and key phrases. Algorithms choose the pages that the index should display in search results. It shows the order in which they appear and increases user relevance. It also eliminates low-quality results, including articles with misleading titles, off-topic pages or keyword staffing.
1. Search Engines
Bing is Microsoft’s search engine and Google’s main competitor in the search industry. While Google’s algorithm works with current and fresh content, Bing goes for old and respectable pages. This search engine lets you quickly find searches, track topics and trending stories, and collect Microsoft Reward points and entertainment.
Yahoo accounts for 2% of the market share and has a robust portal with music, sports, movies, and games. At one time, it was the largest search engine on earth, but Google has since replaced it. It is an American web service provider that offers mailing and advertising services.
Yandex is a web portal and search engine that offers internet searches and other services, including public transport, maps, weather, or news. It is a Russian multinational tech company that provides internet-related products and services. The company invests in creating products and services powered by machine learning.
Baidu is a Chinese multinational tech company specializing in Internet-related services and products using artificial intelligence. Unfortunately, it is the most significant competitor for Google in the Chinese market as it dominates the search engine audience in that country.
- Amazon Web services AWS holds 33% of the cloud infrastructure worldwide
- Microsoft Azure is a cloud computing service by Microsoft that accounts for 15% of the market share
Amazon has taken the lead in the product search category, accounting for a sizeable percentage of the advertising industry.
Facebook’s most significant social media following dominates the digital advertisement industry.
Google’s Business Model is constructed on multiple segments and various products and services. The company explores and creates solutions for many distinct facets of the tech industry and has excelled in most of them. This has made Google a formidable competitor to any established tech organization.