Does the above photo mean anything to you? What about the column on the right hand?
Oftentimes we communicate on the internet for free, consume videos, music, articles etc for free and most importantly give our information for free. But in spite of this entire not-tricky-puzzle, have you figured out why Google is the richest browser if not one of the most profit making companies in the world and yet they give “free services”?
BBC’s Dr Aleks Krotoski and her video The Virtual Revolution: The cost of free is certainly a good exposure.
Believe it or not we give up for free our all for convenient online space but this has enriched browsers like Google and numerous companies (advertisers) just at our mere click on any key word on the browsers. A mere search to a word or topic on say Google makes a massive business between the browser and numerous companies and hence every time we “google” we help them make money.
The funny thing is that about Google’s business is that it sells something that doesn’t really exit as opposed to others who sell tangible products. In simple terms, Google gets massively paid for simply sending traffic to other websites.
Ads by Google. That catchy phrase you often see on Google page and that’s how the browser is making its money. You should have noticed that every time you do a search on Google, there is a section called “Sponsored Links”. Every time you click on one of those links, Google charges a certain amount of money to the website for the click. And when you go on a website you’ll notice advertising from Google too. Virtually every word. So when you click a word say football, several websites of football advertisers pop up on the sides and Google charge a certain amount of money to the website you clicked on and part of that money is given to the webmaster publishing the ads. And I can hardly talk of the power adverts have on our lives. A mere look at it increases our impulse to go for it. Eventually, the product online is not content but your eyeballs looking at the content. This is called AdSense and is an enormous source of income for Google.
As of how advertisers feel the pinch, albeit temporarily because they still make profits from such adverts, a bidding system is used. Yes, bidding because lot’s of companies realises the gold in this business hence the scramble for space. So when you want to advertise with Google, you select keywords you are targeting. Let’s say I do parcel deliveries as above and I want to bring potential customers to my website. I’m going to bid on the keywords “parcels” and “deliver parcels” for example. The price I’m going to pay will depend if there is other companies bidding for that keyword. The more companies are fighting for a keyword, the more I’m going to pay for a single click to my website. So the mathematics involved is Product/Space=Bidder x Quality. So you can envisage that for highly competitive keywords like finance and health it can cost quite a lot of money for a company to advertise with Google.
It therefore does not come as a surprise that Google seems to be everywhere now: They have to show substantial growth to their stakeholders and to do that they have to drive more and more traffic to provide more and more advertisement.
The main cause of concern however, is that this all happens at the expense of our privacy. As we give in almost our every detail on line with the coming of social media as the driver, Google looks at contents of our mails, wishes and likes and links some keywords to some ads that appear on the sides. In other words, every time we read something, a cookie tracking device which gives out information about our range of interests is planted on our computer, allowing Google to customise the adverts it gives us. So our privacy is at stake, and more so when we spend a lot of time online.
So, much as it is hard to dispute the view that the internet is the next Industrial revolution, the main issue is that the product online is not content but your eyeballs looking at the content. Here you can find more information about the Google philosophy and how Google makes money.
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