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Google’s Advertising Business

November 4th, 2003 · 2 Comments

The Register has an interesting take on Google’s business:

[Google is] said to be in the ‘search engine business’ – but unless you take the term at its most literal, to encompass comparison shopping sites, or pay-to-play engines – there is no public search engine business.

Google is an advertising business. It’s an intermediary between media buyers and sites who want to see some advertising revenue: it’s simply an old-fashioned media agency. Some of the property, the ‘billboards’ if you like, in the sense of the word that ClearChannel understands it, Google owns and operates itself. Advertisements show up on the search results, in Usenet groups and of course on its prime ‘content’ advertising space at the moment, Blogger.com. Google’s main rival is Overture, which was recently acquired by Yahoo!. In this business model, Google doesn’t ‘own’ the properties but acts a broker in the classic sense.

But Google started late in this business and it isn’t in the lead: a report by Jupiter this week advises that Overture represents better value for marketers.

And unlike Microsoft and Yahoo!, Google has few other revenue sources.

Its recommendation: “Microsoft makes an excellent partner for Google. And Google’s marque search engine matters much less to Google than you might think. It’s not really in that business – because there isn’t a ‘search engine business’.”


Tags: Software

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