Search Marketing


Google's Growth and The Future of the Web

Thu Oct 18, 2007 8:56 pm
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As Google approaches $200 billion in market capitalization, many are wondering if this kind of growth can continue and what it means for other companies in the online sector.

What Google is doing to ensure its growth

Google has continued to grow, and almost everyone on the web encounters this company one way or another. Some simply use them to search, some advertise their business using AdWords, and some publish content using AdSense, but most encounter Google with the average website they visit.

For the past few years Google has been distributing a free service to anyone with a website who wants to essentially collect tracking data. Google Analytics is a free service that webmasters place in their web pages. Google collects data through a small Javascript program and takes the burden of collection and analysis off the web server and webmaster.

You can tell when a website uses this because at some point Google's tracking application is loaded onto the page and it might display on the status bar of your browser, or you can view the source of the web page and see if someone is using Google Analytics. A small program, or cookie is placed on your computer and can tell where you been visiting (another site using Google Analytics), your general location, and analysis derived from information relating to any past data recorded.

Google has been expanding technologies like this to entrench itself more onto the web. Part of its growth in online advertising, and the difficulty in finding any real competition is that Google does not really sell anything. Their real advantage is that they enable, by their sheer size, unparalleled data collection, and they have established enough trust with publishers and advertisers to use them for multiple tasks.


In terms of revenue generation, Google is the first stop for publishers and advertisers. Their large base of advertisers creates focused, targeted ad presentations that can provide publishers with a stream of revenue they share with Google. Advertisers encounter a completely customized interface for their own advertising purposes, and do not have to deal with any fixed pricing solutions, since AdWords is an auction system.

Google's revenue is primarily from AdWords, and distributed through their publishing system AdSense. While they do provide an increasing number of online applications suites, like online office software, email, and the possibility of phones, these account for very little to nothing in terms of revenue.

What they have established is a network of servers to collect data (some 400,000 as estimated in an article in the New York Times last week), provide users with useful programs, and are primed to absorb the increasing online dollars coming onto the web everyday.

Differing Perspectives

As any online publisher can tell you, around 80-90% of all search traffic comes from Google. Google sources far more pages through their network of bots than any of the major competitors (yhoo, msft), and they have a better set of results than any of those competitors.

One of the major reasons Google has such a loyal publishing audience is that there is really no substantive competition in this online space. But the loyalty of these publishers, which are the real backbone of their revenue, is tenuous as their source of revenue, as well as traffic is ultimately centered on that single source. If Google can hold these publishers, and finesse any new publishers away from the few real competitors, growth in this revenue stream might well continue.

In the traditional media there is the belief that competition to their search service is going to challenge their online position, but it is the publishers that hold all the cards. To lose that advantage is the real threat to Google.

When compared to social networks, or online application companies, or email, Google's revenue is so far beyond these other online business models. While the next few years are no doubt going to experience higher online advertising rates, Google is in the fore of being able to best grab hold of this new stream of dollars.

The difficulties going forward for Google are not necessarily only business competition, but rather various governments figuring out that Google holds more behavioral information than most anyone else around. Given that their services are not monopolistic, as Windows has been considered to be their problems in the future are likely to be directed on the privacy front.

Sun Oct 14, 2007 5:14 am
Name: joe Comment: Great insights into Google and what they do. The Government will, at some point in the near future, promote some legislation that will probably throw a monkey wrench into Google.

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