Google Business Model Google’s business model is largely based on advertising. The founders of Google Larry Page and Sergey Brin point out that the dominant business model for most search engines is advertising. During its inception, advertising was the means by which the company sought to stay afloat; in later years, it became the means by which it generated substantial revenues (Spencer)…
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Before long, Google earned its popularity as it soon became the biggest search engine in the world. Google’s business model is also based on innovation. Its brand became on the most popular brands in the cyber world. It was quick to expand its services to include: Google Maps, Google Earth, Froogle, Google Scholar, Google Books, and similar products (Spencer). In maintaining these two business models, Google is sure to stay at the top of the world’s internet products. Google has posted significant growth in revenues during its 2008 first quarter. It generated revenues of $5.19 billion for March 2008 which is 42% higher than its March 2007 figures. It also posted 3.7 billion revenues from advertising commissions. It had a net income of $1.31 billion with $4.12 per share – up from the year 2007 $1 billion worth of profits and $3.18 per share (Perez, p. 1). With the internet world and its competitors growing at phenomenal rates, Google’s capability of generating profits has been sorely tested; but it nevertheless still managed to register significant return of investments for the past several years. Most of the company’s profits come from the pay-per-click text ads; being the best provider of this type of ad has helped to boost its profit growth (Perez, p. 2).
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