How does Google make money..??

I would prefer to discuss the topic in detail after I introduce to you a few important terms, which may guide you in understanding the whole article in a better way. This article mainly focuses on Google.

Slight Introduction:

Let me start with the term �Search Engine�.
A web search engine is one of our virtual friends which provide us the related answers even to the stupid queries we think of. The process would look like this: "--You type in your query in search box provided by the search engine, hit enter and then you find related results without having made any payment.--" Yes! We all know that it is all free for a search..!!

Along with the results, we also find a few related sponsored links. We often miss to notice it (hehehe..). The reason being that we don�t bother about them. But actually, when you perform a search in Google, sponsored links appear on the right side of the screen with a slightly different background.

Now questions galore as to what are sponsored links..??

Well, Sponsored Links are advertisers that make a business agreement with Google in order to get their ads displayed alongside the results of the most appropriate searches. Because of the immense popularity of Google, plenty of sales persons advertise on the Internet. That way, people searching for used cars may find people selling cars with the sponsored links. These sponsored links serve as ad source and every time we click on one of those links, Google charge a certain amount of money to the website for the click.

How much does Google charge for a click..??

The price that the advertisers pay for a click depends on a lot of factors and this is where Google is playing smart. They use some sort of bidding system. When you want to advertise with Google, you select keywords you are targeting for advertisement. These keywords are called Adwords. Now, Let�s say I own an online bike store and I want to attract customers to my website. I�m going to bid on the Adwords �BIKE� and �BUY BIKE� for example. The price I�m going to pay to Google will depend if there is other companies bidding for that Adword. The more companies are fighting for an Adword, the more I�m going to pay for a single click to my website. The price can vary from 0.01$ to 100$ or more. Obviously, the Adword �Buy Bike� would cost more. There lies the trick laid by intelligent Google..!!

Summary as an Example..!!

Suppose some person owns a "Mobile Phone shop" and there is no popularity at all. Then that person would create a website and promote it in name of sponsored links and thereby promote sales. Now, generally customers make use of search engines to find Mobile Phone shops. The website owner may have to pay money to Google for showing Adwords under sponsored links i.e for advertising in Google pages along with the results. Now, if the customer clicks on the sponsored link, then there is a possibility that the customer may buy or may not buy anything.

Case 1: If customer purchases anything:

Now (if suppose) the customer purchases anything, then certain amount will be given to Google (a share of the amount made by the sale) by the shop owner for advertising about the product which led to the sale of the product. As the customer was benefited by the Google sites and also the shop owner has got some sale of his product due to Google ads, the owner pays some amount to Google.

Case 2: If the customer clicks on the sponsored links and does not purchase:

Even now Google will receive a small amount from the company which has bought the Adwords, though the customer did not purchase from the shop keeper because Google search engine has displayed those links as a part of results.

In both the above cases Google will somehow make money..!!

Also others sources of money for Google will be due to bidding of the Adwords in the sponsored links column.

"In simple, those who advertise get increased business, and Google gets the money from their payments. Consumers who search for certain products may find it easier to find what they are looking for by using the sponsored links. Thus Google earns much share of money due to Advertisements."

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