Business Model of Google AdWords

Google Business Model

About the Business Model

Google generates over $20+ billion revenue per year. Most of that revenue, over 90%, comes from advertising via the search engine and the AdSense program. The AdSense program places ads on millions of websites.

The current business model for commercial search engines like Google is advertising.

Google is ranking number 1 in the Alexa index, proving to be the leader in search engines. It is also worth noting that Google has become synonymous with search. Often, people "google" the information rather than "search" for it. Good thing!

The flip side of Google's successful business plan is real and through innovation. This is demonstrated by the products and services Google incorporates into its brand. But what is the technology behind Google?

Technology

Google's search technology is reliant upon computer algorithms to determine search positioning:

• Page Rank: The technology that determines the importance of each page. It considers "500 million variables and 2 billion terms" to determine how a page will rank in the search engine (Google Corporate Information, n.d.).
• Hyper Text Matching Analysis: The technology that analyses page content and ensures the results returned are relevant to the query entered into the search engine.

Google uses technology in its data centers that ensures that Google has the speed, efficiency, and scale to serve its growing number of queries by users.

Google uses advertising services to gain significant revenue: AdWords (these are relevant ads alongside search results), and AdSense (these are revenue-sharing deals on third-party websites).