By samoore (1251644913|%a, %b %e at %I:%M%p)
I’ll be completely honest here- as a senior student who is graduating in a few months and is in the home stretch of 16+ long years of class, it’s pretty difficult for me to pay attention and stay interested in class. Of course, I am talking about other classes, and not BIT330, which is always interesting.
That being said, last week’s “Google Class” was easily the most interested and engaged I’ve been in a class this entire semester. I was asking questions, was fully interested in the answers, and did my best to participate in class discussion. Surprised with myself while I was leaving the class, I decided to come up with a few possible explanations for my actions:
- I have never interacted with a Google employee before
- I love Google as a company, and am fascinated by their vision, breadth of product, and level of innovation
- I had a large iced coffee that day, instead of my usual small iced coffee
- I was extra motivated in BIT330 because I had received a “60” on my project progress report the night before, which was the lowest grade of my college career!
The presenter, whose name I completely forgot, went over a selection of Google products and ultimately explained the costs and revenue-adding aspects of the product. Prior to this class, I knew that “ad revenue” was Google’s main source of revenue. However, I had no idea that ad revenue provided Google with over 95% of their revenue! It’s pretty incredible that Google is paid over $20 billion a year just to put ads on their website. Can you imagine explaining that fact to someone 25 years ago? They would be baffled. Anyway, I figured that I would go over a couple of the products and the most interesting facts about them:
- Google Toolbar
- Costs: Design, development, distribution, bandwidth costs
- Revenues: Widespread use of the toolbar strengthens the Google brand image and companies with other products pay to have their product as a download option bundled with Toolbar
- Costs: Design, development, speed optimization, fees to developers who design widgets for iGoogle
- Revenues: strengthens the Google brand image, increases the chances that Google is used as a home page, makes Google more marketable for advertisers
So, why does Google continue to innovate and create free products? There is really one goal. Popular and useful products lead to more site traffic, which makes Google more marketable to companies to advertise on their website. That’s it!
Since they have been successful thus far, it only makes sense Google will continue to innovate and to provide free services in place of for-pay services. For example, it makes sense that in a few years, Microsoft Office will be obsolete because of the free Google Docs service. In my opinion, this will ultimately present a huge antitrust problem in the Internet in a few years. I think that Google will eventually knock out so many businesses, that they will be hindering commerce in some way. Regulation? Not yet. But in the distant future, I wouldn’t count it out. You heard it here first.