Google, History, Profitability

sashae sent us a story about google. Google has been my search engine of choice for years now, and this is an interesting window into what's happening back there. I find it interesting that people angrily submit stories constantly about Google "selling out" whenever something that looks like it might generate revenue appears. That means more than a lot of people realize: it means people care. So many Web sites are so bloated with ads that already can't be taken seriously. Google is special: I'm not opposed to seeing ads on it (frankly I'm amazed they made it this long considering the kind of bandwidth and hardware they need) I just hate seeing ads the way the vast majority of mainstream sites do it (hundreds of little banners everywhere blurring the lines between content and commercials). And hell, they run Linux.

Comments

About time

[grahamsz]

I really see no problem with a small number of banner ads on a site anyway. Even /. has them and we all know that they aren't a big money-grabbing corporation ;)

Google on the other hand provide a truly excellent service. Admittedly it's fast loading pages are a big bonus to modem users but they deserve to be sucessful.

To many people seem totally opposed to commercialisation on the internet and expect companies to provide for free. Certainly i'm not best pleased with sites like altavista that take ab out 20 seconds to load on a modem but one banner per page is perfectly acceptable.

I just hope that when they see the cash rolling in they dont take the easy route to drive profits exponentially by having adverts everywhere (ala deja.com)

Re:About time

[jfrisby]

When they see the cash "rolling in"? Frankly, you don't understand the economics of the web.

Banner ads provide very little revenue. Let's do the math... We'll say a $10 CPM. (the amount Google gets for every 1,000 ads they show) Google had 6.6 million unique visitors in July according to PCData Online. Since it's a search engine we'll assume about 2.5 page views per user. (although that's probably a bit on the high side)

(6,600,000 * 2.5) * (10/1000) = $165,000/mo.

Even if you make more favorable assumptions you don't wind up with much money:

(7,000,000 * 3) * (20/1000) = $420,000/mo.

Keeping in mind that Google's operating cost is probably pretty high if you just consider colocation (they are hosted at AboveNet), bandwidth, and hardware. Then there is the cost of employees -- Google goes to great lengths to attract and keep top talent, even going so far as to hire an on-site gourmet chef.

Banner ads alone are insufficient to keep all but the lowest-overhead companies going. Google has partnerships involving licensing of their engine or cobranding of it but if that is all they did it would not make sense to keep the end-user site (the one you and I use for searches) going -- it would be a money pit. Banner ads reduce the loss incurred from the end-user site.

Anyone who talks about Google "selling out" is, frankly, an idiot. To run their search engine, Google needs hundreds, perhaps thousands of servers (you don't think a desktop PC running off a DSL line indexes 1 billion pages and serves the searching needs of 6.6 million distinct people I hope?) using tons of bandwidth and space at a pricey colocation facility. Do you honestly think that they started this company with no intention of being *profitable*? Do you honestly think they threw all this money, time, and energy into making Google out of some sense of philanthropy?

Please!

-JF

not to be pedantic but....

[mosch]

10^100 is a googol.

10^googol is a googolplex.

And this site can help you imagine that.
----------------------------

As far as the ads go ...

[Vassily Overveight]

One thing that's endeared Google to me is how they dress up the logo for occasions like St. Patricks's Day, Christmas, New Years, etc. (My favorite was the necktie on the logo, signifying Father's Day. I stole the idea for one of my sites. The customer loved it.) I always click on those dressed-up logos to see the message it leads to. Perhaps ads could be done the same way, and remain tasteful and non-obtrusive. Make the logo pour a glass of Coke, or whatever. If it were done right, it would be funny, get the message across, and lead the viewer to 'click-thru' on the logo.

Dilbert and Ads

[hawk]

When dilber first started showing ads, Scott Adams included a little comment about the ads, and why they were there. It boiled down to something like:

1) they offered us lots of money
2) we like money

I really don't know where the attitude that the world is obliged to offer us whatever we want for free comes from. Keeping your software ideologically pure, and then providing free hardware for the world to use it, doesn't feed the kids.

I don't mind ads. I do mind things that blink at me. OK, they can blink once, but once they repeat, I edit my junkbuster file to block them. Then again, very view bother to make their ads readable in lynx, which I usually use. The top of *this* page says "Click Here!" in the blue letters indicating a link; I've seen others that tell me what they're about (and have followed a couple).

More "About time" from Time Magazine

[Netsnipe]

In a recent article and interview with Larry Page and Sergey Brin of Google, in Time Magazine they freely admit that:

"The whole point of Google is to get you on and off the site as soon as possible."

Considering that Google has introduced the concept of democracy to ranking the prominence (or relevance) of sites is revolutionary thinking, and they deserve to reap the rewards of their thinking. Google know that by refusing to offer the top-heavy extras of other sites, they too will rule supreme on the democracy of the Internet as one of the most popular search engines.

Google will continue to offer speedy search engine results, and they will probably do all they can to preserve their unique status. By cutting down on advertisements and extras, combined with their Linux-operated rack systems of off-the-shelf motherboards and spaghetti wiring, Google is also making enormous savings compared to conventional search engines.

Sure Google is going public next year, but they won't need massive ads and extras to draw in revenue. Unlike conventional search engines, Google doesn't charge a flat rate, but based on per search basis when other sites link it to, and the revenue will keep pouring in, without killing both the principle and advantages of Google.

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Democracy and Google explained.

[Netsnipe]

Maybe I should have explained this concept better for those who don't know how Google works by "democracy".

Google is unlike other search engines that rank sites as being relevant to a user's search request by counting how many times a keyword is used within a page, or by domain names. This system can be commonly abused, and it has been demonstrated time and time again by pornographic and celebrity fan sites.

Google on the other hand, works on the principle of democracy, not in political terms, but by the definition derived from "the majority of the people". Google ranks sites as being relevant by counting how many other sites link to it.

It is a democratic search engine because it counts each external link to a page as a vote by other users who have linked to it because they think it is important and or useful. Hence a popularly linked site, in Google's eyes must be also relevant because it has been judged to be so by the Internet community as a whole.

This is what is so unique and revolutionary about Google and hence why it has an almost uncanny ability in providing search results containing both the official sites and the most popular/relevant third party ones at the same time.

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