Google was the most powerful advertising machine ever built.
Starting as a research project from two PhDs at Stanford (Page and Brin), Google became the most scalable advertising machine of our time.
Today Google, rebranded as Alphabet, still generates most of its revenues from advertising, which powers up more than 80% of its revenues in 2021.
Alphabet generated over $282B from Google search and others, $32.78 billion from the Network members (Adsense and AdMob), $29.2 billion from YouTube Ads, $26.28B from the Cloud, and $29 billion from other sources (Google Play, Hardware devices, and other services).
On the one hand, you get a free search engine, together with other vertical tools for search, which serves billions of users for free.
While at some time, Google has an advertising network (AdSense) that allows publishers to monetize their content.
While advertisers can use Google Ads to target free users on the platform.
Google and Facebook have been one of the most prominent attention merchants of the last decade.
Still as of 2021, most advertising revenues would be split between Google and Facebook.
The hidden revenue generation model is among the most profitable patterns for business models built on advertising. In fact, businesses like Google and Facebook have managed to gain more than $290 billion in 2021 from advertising on their platform, even though many users might not be aware of the mechanisms that drive those platforms.
At the same time, Google has been trying for years also to diversify away from its core businessmodel, placing bets in other areas.
As of 2022, those bets haven’t paid off yet, and in 2021, for instance, the main bets Google (Alphabet), has cost the company over $5 billion.
Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries. Of Google’s (Alphabet) over $282 billion revenue for 2022, Google also generated over a billion dollars from a group of startup bets, which Google considers potential moonshots (companies that might open up new industries). Those Google’s bets also generated a loss for the company of over $6 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
