Over the last decade, Google has made internet search an integral part of our society. Hundreds of millions of searches are done every day on the Google search engine. From an economic standpoint, billions and billions of dollars of revenue are produced because of the connections Google creates between businesses and consumers. With Google in this position of influence, what should we expect from them in the future?
How Does Google Make Money?
Despite what they say, Google is not around simply to create a meaningful user experience for those surfing the internet. It’s here to make money – and lot’s of it. The future of Google will depend on what path will bring in the most profit for them.
In 2010, Google earned $29.32 billion in revenue, up 24% from 2009. Of this revenue, 96% came from advertising, both in search and on their vast display network. Search is their bread and butter; PPC advertising is what brings home the bacon.
The Ingenious Google Business Plan
Google’s business plan has been ridiculously successful. It saw a need that consumers had – instantaneous information in an impatient world – and has worked tirelessly to provide that in its search engine. The trick was not just to provide info, but to present to searchers exactly what they are searching for, while excluding all the bad stuff trying to sneak into the search results. By successfully doing this, Google has built a trusted search reputation that is almost entirely unquestioned by the general public.
Unfortunately, Google does not get paid for its organic search results. So it developed a system that allows advertisers to leapfrog the organic listings and show up at the top (for a price, of course). Now – because of Google’s carefully built reputation that has resulted in incredible amounts of traffic – they have tons of advertisers lining up to appear at the top of search results. Despite rising competition and costs (cost-per-click on Google’s PPC advertising has increased 8% in the last year alone), hundreds of new advertisers are signing up every day.
The Future Of Google Is Advertising
Google is already working behind the scenes to increase its advertising revenue. By implementing strict advertising policies to increase user satisfaction, changing the appearance of ads to make them look organic, and other sly tricks, Google has raised the number of paid clicks 18% over the last 12 months.
So what’s the next step? Well, it won’t happen overnight, but within the next few years Google’s search engine results will be entirely paid listings. As the number of legitimate advertisers increase, and as Google’s advertising policies and quality score rating system improve, Google will fill the first page of most or all search result with advertisers who are willing to pay and can meet the quality standards of organic listings. And as they transition to this new format, the general public won’t even be able to tell the difference.
What does all this mean for you? If you have a website, it means you need to get a head start and find excellent pay per click management services (I recommend ours, although I may be a little biased). Google’s next logical move is to go completely paid listings – will you be able to keep up?