Google Revenue Model - Report Example

Google Revenue Model Google Revenue Model Affiliation Table of Contents Table of Contents 2 3 Google 3 Revenue Models 4 Google revenue models 4 Google and Yahoo 5 Suggested revenue models for Google 6 Conclusion 7 Bibliography 7 Abstract The present age is the age of information and communication technology (especially web sites, e-commerce, and e-business). Additionally, with the emergence of web technology every field of life (i.e. education, supply chain management, the business sector, etc) has improved and now more and more people make use of the internet for different purposes. Since, the internet is full of information and it is not easy to find desired information on the internet quickly. In this scenario, Google is an intelligent search engine that helps every kind of users find and retrieve their desired information quickly. However, the question is that what revenue model does Google use to generate revenue? This paper will discuss the answer to this question. The aim of this paper is to analyze Google’s revenue models and compare it with the revenue models of another search engine website. Google Google is world’s top search engine for retrieving data and information quickly. Additionally, Google, presently, represents well-liked images of a high-class, reliable retrieval tool, specifically for the reason that its ranking algorithms set up a broadly appreciated and reliable set of biases, for instance “popularity”, to carry arrange to an or else random series of web links. However, what it falls to is selecting the suitability of these biases, a number of, for instance web page reputation, are good enough; others are not necessary. In addition, the users of Google represent themselves as users of a service, receivers of something intended to fulfill their own needs (Moxley, Blake, & Maze, 2004). When a user searches through the Google, different links of related categories of the products and services are appeared on the user interface, for instance, if the search query is for a food product then Google will intelligently offer a list of related categories against the searched query. Thus, this is a great opportunity and facility that helps the users select and check products and services of similar kinds. In addition, Google offers targeted advertising solutions as well as worldwide internet search solutions. However, its main products and services that help it generate revenue are (Metz, 2008) & (Organic Spam, 2007): Google AdWords Pay per Click Advertising Google AdSense Google Answers Froogle Cost-Per-Click Revenue Models A revenue model is a way of generating revenues, such as charging customers or advertising (Savarese, 2006). Additionally, a revenue model outlines a variety of revenue streams that a business can set up and how each can help earn money. Thus, if a company wants to adopt a unique revenue stream then it should illustrate it plainly and it should confirm that it has confidentiality forms signed (Obringer, 2010). In more simple words, a revenue model is the business strategy or a plan for a business or website to generate revenue. Additionally, there are a lot of different types of revenue models for instance, the advertising revenue model, contextual advertising, direct advertising, selling your products or services directly, premium subscriptions, and affiliate marketing (Swift, 2010; Carter, 2005). However, Google is a major web based business that makes majority percentage of its yearly revenue/income through the advertising revenue model. Google AdSense, Google AdWords, and Froogle are the main Google advertising revenue models through which Google earns money. This is a pay per click advertising program (Veloso, 2008; Jaquenod, 2008). Google revenue models It is assessed that approximately 90 percent of Googles revenue is created from Google Ad-Words strategy. Additionally, the Google AdWords revenue generation is a pay-per-click promotion program that is intended to permit the advertisers to present ads to public. These ads are planned and distributed in such a way that people click or visit them while searching for their desired information and they are linked to what the promoters has to present. For this reason the AdWords revenue generation strategy is playing a main role in Google’s growth and potential enhancement (Carter, 2005; Veloso, 2008; Jaquenod, 2008). Googles revenue models are intended at augmenting the traffic and visibility of its small business associates, reformation of their promotion costs, making suitable their leads as well as assisting them to track returns on investment. GoogleAnswers is also a new and latest advertising program that is a Cost-per-Click model. It makes the majority of its revenue by allowing other website owners to promote their search result pages or web contents through placing similar text advertisements or AdSenses on other websites foundational on their relevance (Carter, 2005; Veloso, 2008; Jaquenod, 2008). Google’s pay-per-click and Cost-per-Click revenue models are advertising programs that are intended to help promoters distribute ads to public (Organic Spam, 2007). Google and Yahoo This section compares the Google revenue models with the revenue models of Yahoo website. Yahoo is also another search engine like the Google. And Approximate 88 percent of Yahoo revenue is extracted from marketing services in year 2006. Thus, the biggest part of its income comes from web based search advertising. In this scenario advertisers bid for search terms to present their advertisements on the search results. Besides this yahoo also has commission based sales and advertising revenue model (ICMR Case Studies in Business, Management, 2004; Swisher, 2009). Yahoo Corporation also allows other businesses and organizations to use clients’ data for their promotion and advertisement. Additionally, the next revenue model that is used by the Yahoo is subscriber data right used in e-mail promotion. In this way, a business website owns important data and information about the customers that is given to other website for promoting their products and services to those customers. Moreover, this process can be adopted by the company who purchase the rights to drive a marketing advertisement of products or services to particular set of customers, to distribute an advertising email message. Furthermore, this type of promotion allows website owner to charge a fee for the advertisements and promotions placed in its newsletter or be able to distribute a separate message in support of the advertiser. And, this type of subscriber data right can also be used to carry out market research with the site customers (ICMR Case Studies in Business, Management, 2004; Corbin, 2009; Swisher, 2009). In contrast with Yahoo, Google also uses Gmail based publisher revenue model. In this scenario Gmail sends marketing and promotion email to business clients and users. Google also generates a great deal revenue from this area but the market volume of the yahoo is little bit more higher as compared to Google business. Since, yahoo deals in various other products such as hosting. The main difference here is market size of Google business (as a search engine) that is higher as compared to business of Yahoo regarding online advertisement and promotions. Google has captured a huge online market regarding the online advertisement and promotions. In this scenario the Google offers a variety of alternatives to the businesses and products promotion for the business. Yahoo also established effective market place regarding the commission based sales while Google is still limited to search engine based promotions and advertisements. Google has very minute business in scenario of the web based commission based sales business (ICMR Case Studies in Business, Management, 2004; Corbin, 2009; Swisher, 2009). Suggested revenue models for Google This section outlines some revenue models that are not being used by Google. In addition, there are various models that can be used by the Google to generate revenue, few prominent revenue models for the business of Google (Carter, 2005) & (Jeanty, 2010): 1. Google can also use the online selling of the physical goods solid e-business revenue model; since a lot of online businesses are generating revenue by using this model. 2. Google can also use some Subscription based revenue model that will charge some fee for the online website that provides the access to online information and data contents for digital technology. 3. Google can also use some marketing and promotion revenue model with some fixed fee in which an amount will be charged per year basis. In addition, in this type of revenue generation process customers will pay the fixed fee for the advertisement for time Conclusion A revenue model is a way of generating revenue. Additionally, every business on internet makes use of one or more revenue models to generate revenue. This paper has discussed the concept of revenue models with respect to a specific organization “Google”, which is a well-known and commonly used search engine. This paper has presented the analysis of the Google revenue models. This paper has also compared the Google’s revenue models with yahoo revenue models. The business of Google is spreading through per click model. I hope this research will offer a deep analysis of the Google’s revenue models and future. Bibliography Carter, B. (2005, November 26). The 5 Best Revenue Models in E-Commerce History. Retrieved April 26, 2010, from EzineArticles.com: http://ezinearticles.com/?The-5-Best-Revenue-Models-in-E-Commerce-History&id=102842 Corbin, K. (2009, February 13). Yahoo Tweaks BOSS Revenue Model. Retrieved April 26, 2010, from ECommerce-Guide.com: http://www.ecommerce-guide.com/news/news/article.php/3802811 ICMR Case Studies in Business, Management. (2004). Yahoo Under Terry Semel: Towards a New Revenue Model. Retrieved April 26, 2010, from ICMR Case Studies in Business, Management: http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy3/BSTA092.htm Jaquenod, G. (2008, June 12). Revenue model for Google, Amazon.com and EBay. Retrieved April 25, 2010, from blogspot.com: http://milkmom.blogspot.com/2008/06/revenue-model-for-google-amazoncom-and.html Jeanty, J. (2010). Define the eCommerce Model. Retrieved April 26, 2010, from eHow, Inc.: http://www.ehow.com/about_4705407_define-ecommerce-model.html Metz, C. (2008, July 28). Screwgle™ - Googles new ad revenue model, Its wallet-emptying good... Retrieved April 25, 2010, from TheRegister.co.uk: http://www.theregister.co.uk/2008/07/28/google_expands_automatic_matching/ Moxley, D., Blake, J., & Maze, S. (2004). Web search engine advertising practices and their effect on library service. The Bottom Line: Managing Library Finances, Volume 17, Issue 2, pp. 61-65. Obringer, L. A. (2010). How Business Plans Work. Retrieved April 26, 2010, from HowStuffWorks, Inc.: http://money.howstuffworks.com/business-plans14.htm Organic Spam. (2007). Googles Revenue Model. Retrieved April 25, 2010, from Organic Spam.com: http://organicspam.com/google_revenue_model.asp Savarese, C. (2006, September 3). A business model is not a revenue model. Retrieved April 26, 2010, from Veer West, LLC: http://www.veerwest.com/blog/strategy/a-business-model-is-not-a-revenue-model Swift, B. (2010). What is a Revenue Model? Retrieved April 27, 2010, from eHow, Inc.: http://www.ehow.com/about_5488473_revenue-model.html Swisher, K. (2009, July 28). Yahoo to Get 110 Percent of Search Revenue in First Two Years of Deal With Microsoft. Retrieved April 26, 2010, from All Things Digital: http://kara.allthingsd.com/20090728/yahoo-to-get-110-percent-of-search-revenue-in-first-two-years-of-deal-with-microsoft/?reflink=ATD_yahoo_buzz Veloso, B. (2008, June 12). Revenue model of Google, Amazon.com and eBay. Retrieved April 26, 2010, from http://ecommercesite.wordpress.com/2008/06/12/identify-and-compare-the-revenue-model-for-google-amazoncom-and-ebay/ Read More