As of October 5th, 2009, Google was worth $153.4 BILLION! So, how is that possible? How does Google make their money?
When I go to Google, I type in the search terms I want and hit Google search, or if I am in a particularly frisky mode, I’m feeling lucky! Let’s say for example I want information about digital camera, more specifically a Canon digital camera. I go to Google and type in Canon. I get back a page of search results, and start looking at webpages. So how does me doing that translate to Google being worth BILLIONS of dollars?
Google charges companies to put ads on their page. Wait… what? I’ve never seen ads on Google… or have you? Below is a picture of Google search results for “canon”. The ads are in a red box. They are at the top and the side of the page.
These companies pay Google based on the number of clicks on their website. So if Best Buy purchased ad space on Google when someone typed in Canon, and I clicked on their site, they would have to pay Google for that click.
So how much do companies pay per click, you ask? Well, it depends. Google makes companies bid for it. The highest bidders get closer to the top of the page. Say Best Buy bids $0.15 a click, and Radio Shack bids $0.10 a click. Best Buy would be at the very top of the page. Radio Shack may be pushed over to the side of the page, where people rarely look.
Now you know how Google rakes in the dough!