Is Google set to be the biggest company in the world?

Just how large is Google? Many people are very familiar with their search engine, web browser, and social networking avenue, but what type of resources do they offer and how do they make their money?

The answer is very simple: information. According to the graphic, Google receives one billion unique visitors on a monthly basis, who spend two hundred billion minutes on its websites per month. Money comes from their ability to selectively market products to those individuals most likely to buy those products. They gather this information from the billions of daily search queries that are uniquely tied to an individual’s IP address.

Powering this revenue machine is the equivalent of a fourth of a nuclear power plant’s energy output. 260 million watts of electricity is required to keep Google’s date centers and servers up and running at peak efficiency. In 2010, this energy usage was equivalent to half of the electricity produced by the Hoover Damn that year.

Just how large is Google? Many people are very familiar with their search engine, web browser, and social networking avenue, but what type of resources do they offer and how do they make their money?

The answer is very simple; information. According to the graphic, Google receives one billion unique visitors on a monthly basis. These users spend two hundred billion minutes on its websites per month. Money comes from their ability to selectively market products to the individuals most likely to buy those products. They gather this information from the billions of daily search queries that are uniquely tied to an individual’s IP address.

Powering this revenue machine is the equivalent of one quarter of a nuclear power plant’s energy output. 260 million watts of electricity is required to keep Google’s data centres and servers up and running at peak efficiency. In 2010, this energy usage was equivalent to half of the electricity produced by the Hoover Damn that year.
What about the amount of revenue that Google generates? In 2010 Google raked in $29.3 billion. To put this in perspective, this figure is greater than the combined GDP of the world’s poorest 28 countries for that same year.

Google products and services

Google now offers a multitude of goods and services. Aside from providing the world’s number one search engine, Google also offers everything from development resources such as the Google App Engine to Google Maps. Other goods and services include the Google Webmaster Tools such as Google analytics, the Blogger Weblog publishing tool and Google + which is Google’s own social network. A reason for Google’s success is that they quickly adapt to and exploit new technology and new trends. By having a proverbial finger in every pie, they are able to continue to grow and evolve their brand.

The Google Adwords Goldmine

Despite offering such a comprehensive choice of products and services, a total of 97% of Google’s $29.3 billion revenue in 2010 came from advertising. Of course, Google has a huge advantage when it comes to selling their Adwords. A billion unique visitors per month is a huge amount of traffic. A share of this traffic is potentially worth a significant amount of money to businesses.

The most expensive Adwords for the year spanning the third quarter of 2010 to the second quarter of 2011 were as follows:
1, Insurance – Top cost per click (CPC) $54.91 with 24% of keywords in that category
2, Loans – Top cost per click (CPC) $44.28 with 12.8% of keywords in that category
3, Mortgage – Top cost per click (CPC) $47.12 with 9% of keywords in that category
4, Attorney – Top cost per click (CPC) $47.07 with 3.6% of keywords in that category
5, Credit – Top cost per click (CPC) $36.06 with 3.2 % of keywords in that category

In 2011, Google announced that it received revenue totalling $33.3 billion. The amount of revenue that was generated by Adwords alone was $32.2 billion. However, the price of keywords does fluctuate, because they are sold in an auction type environment. Therefore, the value of these adverts will be different by this time next year.
How are these five most expensive Adwords keywords able to fetch such a high price? In short, these Adwords keywords have a high value for the businesses that need to use these keywords.  Although they are expensive, the new customers represent a high return on this sort of investment. In addition to this, Google can drive so much traffic to sites, that people can justify paying these sorts of prices.

Mobile Devices, the Cloud and the Future of the Internet

The last few years have seen an increasing number of people accessing the internet from mobile devices. Businesses have quickly taken advantage of cloud based computing, the general public are following. In fact, Larry Page, Google’s chief executive announced that mobile advertising contributed 7% to Google’s total revenue in 2010. And while this was only a small percentage, mobile advertising has continued to generate increasing amounts of revenue for Google. This figure is expected to continue to climb. The reason that this is so significant, is because the Boston Consulting Group have predicted that by 2016, around 80% of  people using the internet will access the web from a mobile device.

The price of smart phones and other technologies has fallen, which is another reason why we safely assume that the amount of people accessing the internet from phones will continue to rise. We can also assume that Google’s revenue from mobile advertising will follow suit, partially as a result of this.
The top Google ranking is the Holy Grail of businesses, webmasters and SEO companies. If it wasn’t for Google being the number one search engine and commanding massive amounts of traffic, generating such huge amounts of revenue would be impossible.

As long as Google continues to grow, innovate, exploit trends and new technologies, they should be able to defend their position. Even if we do all migrate to the cloud, this giant looks set to dominate the landscape of the web for the foreseeable future. There is no reason why Google should stop growing at this point, because while other companies have been bearing the brunt of the credit crunch, Google have continued to grow.

From: BusinessMBA.org