9 Jul 2009

How Google makes money?

I know, you will jump and say from advertisement, isn't it.
Yes, they make most of their revenue from advertisement - nothing special about it. But the question is how do they do it. Is it all fair for rest of us i.e. netizens?
You are already aware that when you search anything in Google, a colored horizontal and vertical (on right) column are displayed which says sponsored links. Obviously Google does take money from those companies for displaying their ads in web result. But users are clever and they rarely click on those links. Just ask yourself, how often do you click on those links?
But people, although the number is very small - approximately 1 click on such ads for every 1000 page visits! However, Google pages are accessed by millions (if not billions) of visitors every day. So, for Google, even 0.1% such clicks do bring huge amount of revenue. But sometimes Google does behave unethically. You can be a member of Google's adsense and put ads on your own blog (like this) and Google promises to send you money when user clicks ads on your page. But the catch is, you won't get payment until your account accumulates $100. For a small website, it will take years to reach that stage. So, all these years, Google will get revenue from advertisers but won't pay you anything for displaying them in your page. No worries, after you reach $100, you'll get the money - isn't it? Well, here lies the ugly bit. Google can (and they do) terminate your adsense account at any time if they think clicks are not legitimate. Still it seems reasonable, as you are not supposed to click on your own ads (i.e. they can track from which IP ads were clicked etc.) But even then, Google can terminate your account at anytime without giving you a reason at all. Well, they do - they did it with me. Then I searched on the net whether other people have similar experience and yes, they have done it with millions of people! They claim they would return money to advertisers but how do you know they have done it in practice?
Not very nice, is it?
The story does not end here. Every time you search anything or use Gmail, or Google Toolbar etc., Google stores information of your activity. There is no time limit how long Google will store that information. They can store it forever. Then they sell these information to 3rd parties for market analysis (does the word Google Analytics ring bell?).
Google bots scan your emails (if bots can do it, any one in Google office can do as well), it displays some ads on your inbox title bar based on what you typed in your email. Google's Chrome collects all bits of your web browsing info (that's why I don't use it but I still use Gmail though).
Google never discloses what algorithm it uses to check invalid clicks adsense account, how to rank websites, how it uses user net surfing info etc. In a nutshell, Google is never responsible to anyone for its activity.
Are you now afraid of searching anything using Google?
I am sure you will now ask me if I am recommending not to use Google at all. Well, it's your choice really. All I suggest that you don't put all your eggs in one basket. Always use some alternative emails, alternative search engines etc. That's it.

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