Google or making free... lucrative

It’s certainly not a secret to anyone that Google is probably the most interesting company of the new millennium. By offering high quality services freely to all, the company has succeeded in taking the lion’s share of the online advertising market. Let’s look more closely at this model.

Google: 30% of online advertising market shares

With the creation and acquisition of numerous top quality applications, distributed for free the majority of the time, Google is today positioned as the powerhouse of the Internet. This enviable position enabled them to gain the tidy sum of about US$6 billion in 2005 [1], virtually double that of the previous year!

Let’s not forget profits of over a billion... this revenue comes from online advertising on Google sites (56% of their revenue) and on millions of partner sites thanks to their AdSense program (43% of their revenue). If we consider that 61% of Google’s income comes from the United States alone, and that the online advertising market there reaches about 12 billion dollars [2], this means that Google holds approximately 30% of the online advertising market.

High level content and services

To better discover and even “force” the appearance of applications created, bought or endorsed by Google in as many browsers and on as many desktops as possible, the company has recently proposed a new grouped offer of applications called Google Pack. This ensures quick and easy installation of their search engine on the desktop (Google Desktop), the navigator improved by the Google search bar, their photo management software Picasa, their satellite exploration software (Google Earth), and their message software (not Google Talk, but Trillian, a true multi-platform software).

Several other high quality services have been added to the Google family and increase the dependence on this Internet powerhouse. For example, consumers, even if they can’t sign up (except in the USA) still abound on Gmail, the rich e-mail service offered for free by Google. On their side, companies can now measure their website performance professionally with Google Analytics, formerly an expensive application known as Urchin. The popularity of the posting was such that Google had to stop new subscriptions in order to add additional capacity, a rare thing with Google.

New services, new exposure, new dependencies

Among the new services which will once again increase dependence on Google and that was announced at the Consumer Electronics Show in Las Vegas, is a free remote assistance service, mainly for Windows XP. A nice slap to Microsoft from Google. After all, if everyone has problems with Windows, it becomes a mission for Google, who like generalized problems… The purpose of all these initiatives is to increase the number of content users and therefore Google’s publicity.

Google is also investing a lot into online video, this time with the new Google Video Store where archives, general public programs and even specialized channels will be available on the Web. Even NBA matches will be available for download! Will it become impossible for traditional TV channels to get around Google? With the constant merging of television and computers, I would bet on it…

The secret is in relevance

Google’s success is due to relevance: relevant research results, relevant adverts (always contextual and rarely loud), and relevant functionalities that fill real needs. If your company is not already inspired by Google and/or doesn’t profit from the powerful tools that it makes available, maybe you are missing a good change to make your mark.

[1] My personal evaluation. In the third quarter of 2005, the company had accumulated 4 billion, 200 million American dollars, with more than 1.5 billion in the third quarter. All the details at: http://investor.google.com/fin_data.html.

[2] By creating an average of figures for 2005 from Jupiter Research, J.P. Morgan, Merrill Lynch, Morgan Stanley, PriceWaterhouseCoopers and the Kelsey Group, online advertising revenues in the USA equal US$11.8 billion.